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Thursday, August 20, 2015

Good News For Bank Staff



ALL INDIA BANK OFFICERS’ CONFEDERATION (Registered under the Trade Unions Act 1926, Registration No.:3427/Delhi) C/o Bank of India, Parliament Street Branch PTI Building, 4, Parliament Street, New Delhi: 110001 Phone: 011-23730096 Tel/Fax 23719431 E-Mail: aiboc.sectt@gmail.com   Circular No. 2015/56                                                    Dated: 18/08/2015 
To All Affiliates/State Units/Members 
Dear Comrades,  
10 BIPARTITE SETTLEMENT – PAYMENT OF ARREARS APPORTIONING INCOME TO SAVE TAX 
We hope that the arrears of 10th Bipartite Settlement have been paid to all our members in all Affiliates. We are aware that the payment of these arrears has enhanced our tax liability in this financial year. Many of our members may have to pay higher tax due to the inclusion of entire arrears in this financial year due to application of higher tax products applicable to the total income (including arrears). There is a provision contained in Section 89 of Income Tax Act 1961 which provides for income apportionment which can provide a tax relief to many of our members. We quote below the news item published in a newspapers “Mint” which explains the modality of the Section. 

 
QUOTE
DE-JARGONED: SECTION 89 OF THE INCOME-TAX ACT 
An employee’s tax liability can increase when she receives arrears. However, one can get some amount of relief under section 89 of the Income-tax Act, 1961. Here is a look at what is covered under this section, and how one can avail of the relief. 


WHAT IS SECTION 89? 
The receipt of arrears can lead to a higher tax incidence in the hands of the employee as the amount gets taxed in the year of receipt. Had the employee received this amount in the year(s) that it pertained to, the additional tax would have been staggered over the years, instead of being paid as a lump sum. This is where section 89 comes in. 


This section, titled “relief when salary, etc., is paid in arrears or in advance”, comes under chapter VIII (Rebates and Reliefs) of the income-tax Act. According to it, if you get salary in arrears or advance in a financial year due to which your total income for the year increases, which in turn increases your taxable income, you can claim for relief under section 89. According to this section, arrears includes salary/family pension paid in arrears/advance (additional salary), certain part of gratuity, compensation received on termination of employment, and commuted pension. The rules apply to both government and private sector employees.


HOW TO CLAIM RELIEF? 
Firstly, you should calculate tax for the current year on income including the arrears or compensation. Then calculate the tax for the current year on the income excluding the arrears. After that, subtract these two figures; let us call this figure A. The next step is to calculate tax for the year in which the arrears should have been received—once with the arrears, and then without. Again subtract these two figures; let us call this figure B. 



To get the amount of relief that you can receive under section 89, subtract figure A from figure B. Here’s an example. Say, you earn Rs.10 lakh a year in financial year (FY) 2014, and receive an arrear of Rs.4 lakh for FY13. Your total salary in FY13 was Rs.8 lakh. For FY14, without the arrears, your tax liability will be Rs.1.34 lakh, and with arrears (total salary of Rs.14 lakh), it will become Rs.2.57 lakh. This is a difference of Rs.1.23 lakh. Now, we have to calculate the tax incidence for FY13, on your salary of Rs.8 lakh. Without the arrears, you paid a tax of Rs.92,700, and with the arrears (total salary of Rs.12 lakh) you would have paid Rs.1.95 lakh as tax. This is a difference of Rs.1.03 lakh. So, the relief that you can get under section 89 is Rs.20,600 (Rs.1.23 lakh - Rs.1.03 lakh). 

You will have to fill up Form10E with these details and then submit it to your current employer to claim the relief. Keep your salary slips handy to provide as proof of receipt of the arrears. But do keep in mind that only if the tax paid is higher will you be able to claim this relief. If you do not have to pay excess tax due to the arrears, then you do not get the relief.”    UNQUOTE 
Our members may carefully go through the provisions of Section 89 of Indian Income Tax Act and take the full advantage of the same by apportioning their arrears of the previous years to avoid the higher tax liability, if applicable.   With warm greetings,                         Comradely yours,
                   (HARVINDER SINGH)          GENERAL SECRETARY



ALL INDIA BANK OFFICERS’ CONFEDERATION (Registered under the Trade Unions Act 1926, Registration No.:3427/Delhi) C/o Bank of India, Parliament Street Branch PTI Building, 4, Parliament Street, New Delhi: 110001 Phone: 011-23730096 Tel/Fax 23719431 E-Mail: aiboc.sectt@gmail.com   Circular No. 2015/59                                             

 Dated: 19/08/2015  
Circular for All Affiliates/State Units/Members  
Dear Comrades,  


LET US BRAVE THE ASTRAS TOO 
The long brooding reforms were announced by the Government in a very colourful term “INDRADHANUSH” and they attempted to teach ABC to the very experienced Banking professionals of this country. 


To a reasonable extent the announcement can be interpreted as a confession on the part of the Government, that the policies of the Government and controllers are the prime reasons for the prevailing plight of the Banking sector. 


Our Confederation had visualised the ill designs of the Government long back. We were the first trade union to react to the policies of the Government on so called reforms through our letter to RBI, Government and in a innovative way of an advertisement in three important daily news papers published from Pune on the day when our Prime Minister was to address GYAN SANGAM.  This was done with a view that all Political bosses, Bureaucrats, and Bankers will take cognizance of the feelings of 3 lac strong force of officers who are steering the Banking Industry through all bad times. Though on many other occasions also, we have elaborately exposed the Government’s structured designs to destabilise the Indian banking sector on isolated issues, we once again want to express our feelings and views on consolidation on the seven steps initiated by the Government. 


A: APPOINTMENTS: 
The Government has declared personnels for the posts of Non executive chairman and MD & CEO for few banks in lines with their earlier decision to separate the post of Chairman and Managing Director by prescribing that in the subsequent vacancies to be filled up, the CEO will get the designation of MD & CEO and there would be another person who would be appointed as non-Executive Chairman of PSBs. The announcement also permits relaxing appointment norms and lateral recruitments in middle and senior Management levels, which will block career path of officers who have been toiling hard all these times.  



The ministry has justified their approach as based on so called global best practices and as per the guidelines in the Companies Act to ensure appropriate checks and balances, ignoring Indian set of circumstances. They have gone to the extent of notifying the appointments subject to the outcome of the Supreme Court in cases filed by AIBOC and Com. K.D. Khera against the process of appointment of Non Executive Chairmen and MDs & CEOs without waiting for the decision of the Apex court. However, in appointment letters there is a mention that these appointments are subject to the decision of the court in AIBOC Vs. Union of India & Ors and K.D.Khera Vs. Union of India & ors, which is a mockery of such high posts. 


This unjustifiable step of the Government is highly condemnable and can be branded as retrograde step as it is demeaning the process of cadre building in the PSBs practiced over a period. In Public Sector Banks, there are people who have slaved their way up from the bottom. When they see private sector appointees being hoisted upon them, it could truly ruin


their spirit. Our Confederation has expressed its view categorically through various circulars, representations to the Prime Minister, the Finance Minister, the Secretary D.F.S. and to Chairman, Rajyasabha Committee of Subordinate Legislation (which is meeting today to discuss the issue). 


Simultaneous with our efforts to bring a remedial measure through legal means, we will have to mobilise the public opinion and stage organisational protests in the days to come, to uphold the dignity of our labour -the cardinal principle of the trade union movement. We have raised this issue in UFBU meeting also which was held on 16th August at Hyderabad with a request for joint action programme. 


B. BANK BOARD BUREAU 
In the name of good governance the Government has come out with an idea of forming BBB which is stated to be a body of eminent professionals and officials, which will replace the present system for appointment of Whole-time Directors as well as non-Executive Chairman of PSBs.  


The BBB will comprise of a Chairman and six more members of which three will be Govt. officials and three experts (of which two would necessarily be from the banking sector). The Search Committee for members of the BBB would comprise of the Governor, RBI and Secretary (FS) and Secretary (DoPT) as members. The BBB would broadly follow the selection methodology as approved in relevant ACC guidelines. With the presence of majority Government officials and so called professional Bankers appointed again by Government, change seems to be a farce. 

 
Though we don't have any objectionable stand on the conception of the formation of BBB as the Bureau is expected to do the job of ACC as indicated, a provision appeared in the following lines that the Bureau will also constantly engage with the Board of Directors of all the PSBs to f ormulate appropriate strategies for their growth and development is much disturbing as it would be defeating the very announcement of the Prime  Minister  against Govt interference in the functioning of the Banks and it would be an initiative against the functional autonomy of the PSBs.

 
C) CAPITALIZATION: 
It is very interesting to note from the following lines of the Govt. announcement “ As of now, the PSBs are adequately capitalized and meeting all the Basel III and RBI norms. However, the Government of I ndia wants to adequately capitalize all the banks to keep a safe buffer over and above the minimum norms of Basel III” which is a major shift from the Government’s continuous mudslinging on the PSBs capital strength. 


The Govt. Decision of not providing capital to few banks and infusing the capital in tranches is an obvious attempt to divide the PSBs in to A, B and C as decided in the GYAN SANGAM concluded in Pune. 


This evil design can be perceived from the following lines appeared in the Govt. announcement “ 40% capital will be allocated to the top six big banks viz. SBI, BOB, BOI, PNB, Canara Bank, and IDBI Bank in order to strengthen them to play a vital role in the economy. ”  


It is indeed an irony that when the Govt. admits that all the PSBs are having adequate capital to meet even  the Basel III norms and additional infusion is only to have a safe buffer, the same Govt. refuses to provide level playing field by treating all the PSBs equal by offering the Capital proportionately and immediately. 
Here we wish to offer few suggestions to improve the capital structure of the PSBs as below: 


i) The Govt. must permit the PSBs to retain the Dividends due to the Govt. till the PSBs attain the required level of Capital adequacy.


ii) The Govt. must declare income tax holiday till the required Capital adequacy is achieved. iii) The PSBs must be permitted to value the real estate assets owned by them at market value and classify them as Tier I capital. iv) Instead of branding the PSBs as capital starving, concrete steps may be taken to recover the NPAs of corporate sector to free the blocked capital of the PSBs. 


The selective infusion of capital is an attempt to divide the PSBs for which seed was sown in the GYAN SANGAM held in Pune. The following few lines mentioned in the perception paper presented during the  GYAN SANGAM  is a testimony for the evil designs hetched against Nationalised/Public Sector Banks. 


Under the caption IMPROVING  RISK  MANAGEMENT,  RECOVERY  AND  ASSET QUALITY, it is indicated “ Classification  of  PSBs  into  A, B  and  C  based  on top line”. 
Under the title BUILDING  A  ROBUST PEOPLE  STRATEGY  FOR PSBs, it is suggested “Need  to  shift  from  industry  level  agreements  with  unions  on  wage and  recruitment  to bank  specific  arrangements  with  emphasis  on management  agenda.” Under the head CONSOLIDATION  AND  RESTRUCTURING  OF PSBs SUMMARY  OF DISCUSSION,  it was indicated “Potentially  5 PSU  banks  with  acquisition  capability,  rest  could be  targets  (particularly  small  PSU  banks)” 


It could be easily interpreted from the foregoing that the infusion of capital in instalments and deferred infusion to certain banks is an obvious attempt to weaken few identified banks to brand them as targets for merger or acquisition. It is our demand to treat all the PSBs equally and provide need based capital to them immediately. 


D. DE-STRESSING PSBS 
It is heartening to note that the Government has confessed that their policies and regulatory constraints are prime reasons for the present plight of PSBs possessing NPAs. It is admitted by the Government that: 
- The infrastructure sector and core sector have been the major recipient of PSBs’ funding during the past decades.  - But due to several factors, projects are increasingly stalled/stressed thus leading to NPA burden on banks.  - problems causing stress in the power, steel and road sectors are due to delay in obtaining permits / approvals from various governmental and regulatory agencies, and land acquisition, delaying Commercial Operation Date (COD); lack of availability of fuel, both coal and gas; cancellation of coal blocks; closure of Iron Ore mines affecting project viability; lack of transmission capacity; limited off-take of power by Discoms given their reducing purchasing capacity, funding gap faced by limited capacity of promoters to raise additional equity and reluctance on part of banks to increase their exposure given the high leverage ratio; inability of banks to restructure projects even when found viable due to regulatory constraints.  - In case of steel sector the prevailing market conditions, viz. global over-capacity coupled with reduction in demand led to substantial reduction in global prices, and softening in domestic prices added to the woes. 


It is apparent from the above that the mounting over dues of PSBs were not due to the administrative incapability of PSBs as projected so far and it is due to the PSBs concern on the Infrastructure development-an important growth factor  of the Nation building and the impractical policies of the Government &Regulators. 
Our continued demand and stress to make the rules and norms stringent to punish the defaulters and recover the bank dues to strengthen the PSBs’ capital structure has still been ignored.  


E.EMPOWERMENT: 
Though the Government has issued a circular that there will be no interference from Government and Banks are encouraged to take their decision independently keeping the commercial interest of the organisation in mind, the various decisions communicated, which are in lines with the GYAN SANGAM’s perception paper, does not validate the circular issued. 


The following five statements sufficiently indicate the hypocrisy  of the Government: 
a) Continued control on the top level appointments. b) Control over the infusion of the capital which decides the status of the Bank. c) Moving on the predetermined conclusion to divide the PSBs in to acquirer & targets, adopting middle level recruitments which would demoralise the recently recruited workforce and attempting for bank level wage settlement instead of industry level settlement. d) Continued control of BBB over the Board of Directors of all the PSBs to formulate appropriate strategies suit the authorities. e) The qualitative performance of the Banks would be assessed based on a presentation to be made by banks to a committee chaired by Secretary, Department of Financial Services. 
The above positions indicated by the Government will in no way be nearer to the announcement of offering functional autonomy to the banks. 


F.FRAMEWORK OF ACCOUNTABILITY: 
Against the present system for the measurement of bank’s performance called SoI – Statement of Intent, as this entire exercise took very long and sometimes the targets for banks used to be finalized only towards the end of the year, two changes are suggested by the Government: A new framework of Key Performance Indicators (KPIs) to be measured for performance of PSBs is announced primarily to be used to decide the performance bonus to be paid to the MD & CEOs of banks by the Government and even to consider ESOPs for top management of PSBs. 


The Accountability frame work has been suggested to lay down strict timelines for filing of complaints of fraud cases with CBI as well as for monitoring each and every case almost on a day-to-day basis. To follow the new guidelines of RBI streamlining the framework for dealing with the loan frauds, which stipulates a timeframe of six months, red flagging of accounts, constitution of a Risk Management Group (RMG) in banks to monitor pre-sanction and disbursement, nodal officer for filing complaints with CBI, provisioning in four quarters and creation of Central Fraud Registry have been laid down.  


Department of Financial Services (DFS) has directed PSBs to make CVO as the nodal officer for fraud exceeding Rs 50 crore, in consortium lending the lead bank will file the FIR for all banks. CBI has designated one officer for reviewing and monitoring progress of bank’s fraud cases. Though the Government has suggested so many provisions under the head Accountability, the very essential policy which would keep up the morale of the workforce to disseminate the prime function of the Bank “credit dispensation” without fear is not thought of. 


During the wage revision talks AIBOC had made a detailed presentation to adopt an Accountability policy to deal with the bonafide decisions taken by the Bank officers, which must be brought for implementation if the Govt. is serious on revamping the functioning of PSBs. 


G. GOVERNANCE REFORMS 
Under this head the Government announced to have continued control over the performance of the Bank and to conduct GYAN SANGAMS regularly to bring changes which is totally a “U” turn against the Prime Minister’s assurance of Non interference in the PSBs functioning. 


 Comrades, the cat is out of the bag. The colourful announcements made by the Government have exposed its designs to decolour the glittering PSBs which have been consistently contributing the Economic up keeping of the Nation. 


Our performance under Jan Dhan Yojana, which is a much needed financial inclusion program for an under-banked country like India, is not given adequate appreciation. While the intention of the program is noble, there was enormous pressure on government banks to meet huge targets within a short time placing all the burden upon state-run banks, who had to spent considerable amount of their time to meet these targets which is not even the concern for the private banks. 


Additionally,  the mention in the Prime Minister Narendra Modi’s Independence Day speech asking banks to get each of their 1.25 lakh branches to lend to start-up ventures that have Adivasi or Dalit youths, would put enormous pressure on PSBs only .  
We will be forced to show an achievement in this regard by the time Finance Ministry would take up the next review meeting. In the urgency to achieve  this, PSBs may not be able to follow due credit assessments and such decisions can backfire and as history has witnessed, NPAs will be piled up and we the officers will be projected as non performers and the leaders will be selected from the Private sector Banks. 


The envisaged changes will be resulting in a scenario in which: 
i) The PSBs will be divided into A, B and C based upon their performance and available capital. ii) Retaining top few banks as acquirer banks, other banks will be branded as targets. iii) Despite our performance in sustaining the growth and profitability of PSBs, the top line will be selected from private sector and the internal intellectuals will be sidelined. iv) The lateral recruitments in the middle level will demoralise the recently joined young officers which may bring a brain drain to be utilised by the private sector banks. v) The top line will only chase workforce down the line to receive additional and disproportionate favour and benefits to. vi) The demand on increasing the profit sharing towards incentives will be used to further divide the workforce. vii) The Govt. directly and through BBB will continue to have total control over the Board functioning. viii) The promotions and placements will be performance oriented (the subjective criteria which cannot be applied in service industry), whereas dividing the workforce on the performance in PSBs is a farce. ix) Next wage revision will be a Bank level, which would be a death knell for Industry level settlement which is rational based. 


Comrades, let us understand the suggested road map for the PSBs which would usher us to irretrievable damage. Let us wake up and prepare ourselves for the war which would only save the interest of common masses of this country through Public Sector character of Banks and will also ensure a promising future for the deserving ones. Let us expose the double standards of the Government and planners in shielding Private Sector Banks by not holding them responsible/seeking their accountability for implementing Social welfare schemes of the Government on the one hand and rewarding them with the opportunities of creamy business on the other. 
With warm greetings,             
     Comradely yours,
                   (HARVINDER SINGH)          GENERAL SECRETARY


Now PS  Banks Are Trying to Cheat Retirees, in Violation of Govt of India Guidelines, by Extracting Heavy Premium for Medical Insurance-
By S Ramachandran 
Letter by Mr S Ramachandran
S.  Ramachandran                                                                      Kunal Icon, Building no. A8,                               
Former  General Manager Bank of Baroda.                            Flat no. 104, Pimple Saudagar,  
Former Chairman & CEO - The Sangli Bank Ltd.                    Aundh Camp, Pune 411027
(Now merged with ICICI Bank Ltd.)                                          Tel: 020 27201012.
Former Administrator Madhavpura Mercantile                       E-mail id- ramans1938@gmail.com                              
Co-op Bank Ltd (Ahmedabad)                                                                 
Former Director General Maratha Chamber of Commerce            
Industries & Agriculture, Pune.
 
                                                                        By Speed Post/ Mail
 
 To,                                                                                                                                                        
16th Aug 2015
Shri .Hasmukh Adhia
Chief Secretary, Ministry of Finance,
Government of India, Dept of Financial Services,
3rd floor, Jeevan Deep Building, Parliament Street,
New Delhi, 110001.
 
Dear Sir,
 
SUB:-URGENT INTERVENTION SOUGHT AS GOVERNMENT GUIDELINE IS  IGNORED AND A FRAUD IS BEING COMMITTED ON THE RETIRES WHILE IMPLEMENTING THE MEDICAL INSURANCE SCHEME FOR RETIREES.
In pursuance of the 10th Bipartite Settlement / Record Note, Public Sector Bank’s  have started notifying on their web site a Medical Insurance Scheme which covers  both the  existing employees as well as the retirees  based on a Medical Insurance Scheme “negotiated” by Indian Bank’s Association(IBA).
In terms of this Medical Insurance Scheme both retirees and existing employees are required to exercise one time option for joining the Medical Insurance Scheme which provides for Medical cover as under:
 
Sr.NO.
Category of  Employees
Insurance amount
Insurance Premium
1.
Officer’s
Rs.4 lacs
Rs.7,493 /per  year
2.
Clerks
Rs.3 lacs
Rs.5620/-per year
3.
Sub-staff
Rs.3 lacs
Rs.5620/- per year
Bank of Baroda has announced the above scheme on their web site and the existing employees as well as the retirees have been advised to exercise their option by 31st August, 2015.
 It is rather unfortunate that IBA has formulated this scheme  in spite  of and disregarding the directives issued by  the Department of Financial Services, Government of India in their letter bearing  no. F. No .14/7/92-IR(VoII) dated 24th February 2012 addressed to Mr. K. Unnikrishnan, Deputy Chief Executive, Indian Bank’s Association, Mumbai on the issue of STAFF WELFARE FUNDS IN PUBLIC SECTOR BANK’S. This letter has been signed by Mr. Manish Kumar, Under Secretary to the Government of India.
 While enclosing  a copy of the letter, I have to state that the Indian Bank’s Association INTENTIONALLY AND DISHONESTLY DISREGARDED/FLOUTED THE DIRECTIVE OF THE GOVERNMENT IN LETTER AND SPIRIT WITH SCANT RESPECT FOR THE MAJORITY SHARE HOLDER NAMELY THE GOVERNMENT OF INDIA.  HERE IS HOW THEY HAVE FLOUTED THE DIRECTIVE / GUIDELINE:
Para.
 
In the above letter of 24th February 2012 (Click here to download the letter of GoI ) while accepting the Khandelwal committee recommendation to raise the maximum ceiling limit for staff welfare fund, the Ministry of Finance also stipulated the following conditions:
 
1.      NO CASH PAYMENTS SHALL BE MADE TO EMPLOYEES EXCEPT FOR MEDICAL AND EDUCATIONAL PURPOSES;
 
2.     BANKS MAY CONSIDER THE OPTION OF GROUP INSURANCE POLICIES FOR BOTH SERVING AND RETIRED EMPLOYEES INSTEAD OF DIRECT PAYMENT OF BENEFIT FROM THE FUND.
Each year the Banks may devise a Scheme for apportionment of funds with the prior approval of their Board of Directors, as per specific needs of the Bank.
 
It is requested that IBA may take appropriate steps to inform all concerned Banks accordingly.
 
NOW you will observe from the above that there are two important directive of the government:
 
One is that there should be NO CASH PAYMENTS TO EMPLOYEES; and second when the bank has considered the option of group insurance to both serving and retired employees, THE PAYMENT IS TO BE MADE FROM THE FUND. 
 
IT IS THEREFORE CRYSTAL CLEAR THAT THE CIRCULAR OF THE PUBLIC SECTOR BANKs DEMANDING PAYMENT OF INSURANCE PREMIUM FROM THE RETIREES IS CONTRARY TO THE ABOVE GOVERNMENT GUIDELINE/DIRECTIVE.  THE BANK HAS TO PAY THE INSURANCE PREMIUM IN RESPECT OF RETIREES ALSO OUT OF THE STAFF WELFARE FUND IN THE SAME MANNER IN WHICH THEY ARE PAYING FOR THE EXISTING SERVING EMPLOYEES.  
 
I AM ASTONISHED THAT IBA WHICH HAS RECEIVED THIS GOVERNMENT DIRECTIVE  DIRECTLY IS THE AGENCY WHICH HAS WORKED OUT THE HEALTH INSURANCE SCHEME BY FLOUTING THE ABOVE GOVERNMENT OF INDIA, MINISTRY OF FINANCE DIRECTIVE. THIS IS YET ANOTHER INSTANCE WHERE IBA HAS MIS GUIDED THE BANK IGNORING THE DIRECTIVE OF THE MAJORITY SHARE HOLDER NAMELY THE GOVERNMENT. IBA IN THE LIGHT OF THE ABOVE CIRCULAR OF MINISTRY OF FINANCE SHOULD HAVE CLEARLY AND CATEGORICALLY ADVISED THE PSBS TO FOOT THE BILL TOWARDS INSURANCE PREMIUM IN RESPECT OF RETIREES ALSO FROM THE STAFF WELFARE FUND. INSTEAD THEY HAVE LEFT IT TO THE MERCY OF INDIVIDUAL BANKS.
 
I HAVE ALREDY BROUGHT TO  THE  NOTICE  OF THE READER AS TO HOW IBA HAS BEEN MIS GUIDNG PSBs  WITHOUT ANY ACCOUNTABILITY SUCH AS STEALTHILY REMOVING THE WORD ‘UPDATION FROM THE PENSION SCHEME IN 1995 ALTHOUGH THE SAME WAS PRESENT IN THE EARLIER VERSION” OF 1993. STEALTHILY ADDTING THE WORD “SUPPERANNUATION’ AFTER RETIREMENT WHILE OFFERING SECOND PENSION OPTION TO VRS OPTEES ETC.,
 
Further, the Insurance Premium prescribed under the policy is very high because for a Health Insurance cover of Rs.5 lacs, National Insurance Company is charging Rs.7079/- only which is inclusive of Service Tax.  This is for the individuals who approach for obtaining the policy from the National Insurance Company through Public Sector Banks who are selling third party products. For obtaining the Health Insurance policy for such large number of Employees’ of Public Sector Banks, the premium could be easily lesser  but cannot more for lesser Insurance coverage.
 
Therefore, the officials of IBA including Mr. Unnikrishnan are responsible for:
 1.      Not following the Government of India, Ministry of Finance directive  to obtain  Health Insurance   Policies both for serving and retired employees instead of direct payment of benefit from the fund;
 2.     Apparently negotiating for lesser policy cover for higher premium which is questionable.
 Further, I understand that Bank of India and Bank of Maharashtra have come out the Medical Insurance scheme  with a coverage of Rs.5lacs for officers  but they are not collecting any premium from their officers.  Reports are also pouring in of lesser premium being collected by other Public sector Banks. Thus their appears to be no uniformity followed by Public sector Banks in the matter of providing Health cover to its retirees although other components  of Industry level wage negotiation are  uniformly applied to all the employees of Public Sector Banks.  This has happened mainly because IBA has left it to the mercy of individual Banks to decide on the issue thus creating a separate class of Bank employees within the Bank employees’ category  at the industry level which is against the principle of equity as enshrined by Hon’ble Supreme court of India in a number of judgments.
 
I also understand that there is no audit being conducted by the statutory auditors of the staff welfare fund whose corpus is quite substantial. This against financial accounting. It is therefore necessary for the Government of India, Ministry of Finance to issue directives to the Bank to audit the staff welfare fund account and ensure that the same is actually carried out /complied with.
 
I AM EQUALLY AGHAST AS TO HOW THE LEADER OF BOTH THE OFFICER’S ASSOCIATIONS’ AND THE WORKMEN UNIONS’ HAVE AGREED FOR SUCH A SCHEME WHEN THEY ARE SURELY AND CERTAINLY AWARE OF THE ABOVE CIRCULAR OF THE MINISTRY OF FINANCE DATED 24TH FEBRUAY 2012   AS WELL AS THE PREMIUM BEING PAID FOR HEALTH INSURANCE COVER SINCE IN MANY BANK’S HEALTH INSURANCE SCHEME IS ALREADY IN EXISTANCE FOR THE RETIREES. THE UNIONS AND ASSOCIATIONS HAVE INFACT REPRODUCED THE CONTENTS OF THE CIRCULAR OF 24TH FEBRUARY 2012 TO THEIR MEMBERS. NOW WHEN THE CRUCIAL ISSUE OF DOLING OUT FROM THE STAFF WELFARE FUND TO RETIREES CROPED UP ON ACCOUNT OF UNIFORM HEALTH INSURANCE SCHEME, THEY HAVE TURNED A BLIND EYE TO THE WHOLE ISSUE BECAUSE IN MANY BANKS’ INCLUDING BANK OF BARODA, CASH PAYMENT IS BEING MADE TO EMPLOYEES INCLUDING OFFICERS AT THE RATE OF Rs.10/- FOR EACH DAY OF ATTENDANCE WHICH IS AGAINST THE ABOVE STIPULATIONS OF THE GOVERNMENT. I AM SURE THAT SIMILAR CASH PAYMENTS MUST BE HAPPENING IN OTHER BANKS ALSO.
 
THE QUID PRO QUO BETWEEN THE IBA AND THE UFBU IS VERY EVIDENT FROM THE ABOVE. BOTH OF THEM HAVE TRIED TO SILENTLY BURRY THE CIRCULAR OF GOVERNMENT ON THE PREMISE THAT NO ONE IN THIS WORLD WOULD EVER THINK OF THIS CIRCULAR BUT MY GUT FEELING MADE ME TO DOWN LOAD IMPORTANT CIRCULAR FROM THE GOVERNMENT WEB SITE. THIS I SUPPOSE HAS COME TO THE RESCUE OF ESPOUSING THE CAUSE OF BANKERS ESPECIALLY RETIREES.
 
In view of the above, I request the Government of India, Ministry of Finance, Department of Financial Services to have the matter thoroughly investigated for:
 1.      Flouting the directive of the Government as stipulated in their letter dated 24th February, 2012 by Indian Bank’s Association AND other member banks;
 2.     Non transparent manner in which IBA has negotiated the Medical Insurance for lesser policy cover  with  higher premium;
 3.     How PSBs have been allowed to make cash payment to its employees disregarding the stipulations of Government directive as stated in their letter dated 24th February, 2012.
 4.     How PSBs have been sending compliance report to the Reserve Bank of India certifying compliance of Government of India guidelines / directives.
It is time that Department of Financial Services of Government of India AS A MODEL EMPLOYER
 
A.    SHOULD INTERVENE AND ADVISE PSBs TO UTILISE THE WELFARE FUND TOWARDS INSURANCE PREMIA OF RETIREES ALSO.
B.    Stopping the practice of cash payment to employees except for medical and educational purposes as stipulated in the circular dated 24th February, 2012.
C.    Initiate action against CMD of Public Sector Banks and General Manager HR of PSBs for disregarding the above Government of India directives of stopping the practice of cash payment to employees except for medical and educational purposes. If they have retired, action should be initiated to stop their pension and also initiate criminal proceedings against them. If they are employed in other PSBs as directors or as Customer Service officers, their services should also be terminated since it is not only disregarding the Government of India directive but also reflects their dishonesty and criminal bent of mind. This would send the much needed signal to others who are amenable to disregard directives of the Government.
 D.   To issue directives to Public Sector Banks to  provide representation to retired Officer’s Association  and retired workman association on the welfare  committee  of Public Sector Banks in order to safe guard their respective interest ,as the serving workman & Officer directors are not taking steps to safeguard the interest of retired employee;
 
E.    EARMARKING PROPORTIONATE AMOUNT FOR RETIRED EMPLOYEES FROM THE WELFARE FUND OF RS 25 CRORES PER YEAR AVAILABLE ON ANNUAL BASIS.
 F.    To order audit of staff welfare fund through the statutory auditors;
       
G.   Should take note of the unprofessional manner in which IBA has been working disregarding the Government of India directives. The advice tendered by IBA has boomeranged on PSBs who have been made to pay with interest in many cases.
 H.  Should take note of the litigatory tendency of IBA in service matters more specifically in respect of retiree which is against the Government National Litigation  policy;
I.      To bring in outside professionals  from private sector since there is a nexus between the officials of IBA and UFBU;
 J.     In order to make IBA accountable and transparent, IBA should be covered under the definition of ‘PUBLIC AUTHORITY’ ; This is because, Public Sector Banks have been funding the IBA towards all its maintenance expenses by several crores. This is nothing but the PUBLIC MONEY and therefore there is a need for transparency and accountability in their dealings : I am furnishing hereunder, the details of the contributions made by PSBs to IBA for its administrative and operational expenses:      
                                                                                                    
                                                                                                                        in  Rs.
Period
State Bank of India
Bank of Baroda
Canara Bank
2004-05
        N A
          N A
    7,00,000.00
2005-06
   16,03,011.00
          N A
    6,00,000.00
2006-07
   12,62,336.00 
          N A
    6,00,000.00
2007-08
   25,64,276.00
    19,29,039.00
    6,00,000.00
2008-09
   28,24,601.00
    13,45,343.00
    6,00,000.00
2009-10
   21,48,629.00
    11,80,280.00
    6,00,000.00
2010-11
4,63,16,079.00
 1,11,88,662.00
    6,00.000.00
2011-12
   19,68,176.00
    53,62,082.00
    6,00,000.00
2012-13
    10,02,723.00
    27,51,359.00
    6,00,000.00
2013-14
    37,61,424.00
    31,80,963.00
         N A
In May 15
    37,40,815.00
            N A
         N A
           (N A – Not Available)
Further, Public Sector Banks being state instruments are not authorized to make payments to an unregistered body such as IBA. Therefore, there is a need to bring IBA under the definition of PUBLIC AUTHORITY.
 WITH KIND REGARDS,
 S.RAMACHANDRAN
FORMER GM BOB AND SOCIAL WORKER

 

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