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Friday, July 1, 2016

Why Trade Union Leaders Oppose Merger of Banks?

Bank employees oppose move to merge with SBI-News in THE HINDU on 16th June 2016

Employees of five associate banks have decided to observe a nation-wide strike on July 12 and July 13, opposing the recent decision of the Cabinet to merge them with the State Bank of India. A decision to this effect was taken at a meeting of office bearers of All India Bank Employees’ Association (AIBEA) held in Chennai. AIBEA General Secretary C.H. Venkatachalam said it was decided that a strike would be observed by the employees of associate banks on July 12, followed by all banks on July 13. The strike call has been given by AIBEA and All India Bank Officers Association. On June 30, there will be protests in the State capitals. After the strike, an emergency meeting of AIBEA and AIBOA will be held. Also, United Forum of Bank Unions has given a call for strike on July 29 against banking reforms and labour reforms.


State Bank officers’ body supports merger-The Hindu Business Line-  16th June 2016
Coimbatore, June 16:   
A day after the Cabinet gave its nod for the merger of five associate banks and Bharatiya Mahila Bank with State Bank of India, President of All India State Bank Officers’ Federation (AISBOF) D Thomas Franco Rajendra Dev said, “The Federation supports the acquisition by the parent.”

“We never wanted cross-merger for in it (cross-merger) we believed that we would be creating competition amongst us. Only the All India Bank Employees’ Association (AIBEA) was demanding the cross-merger of associate banks into one entity. We had always maintained that there was no need for merging the associate banks with SBI. Now it has been forced on us,” he told this correspondent. The Federation has formed three committees to discuss the various post-merger issues such as human resource (planning), possible closure of branches and ways to integrate the associations.

Committees’ meeting
“The committees met on Tuesday at Mumbai; held a discussion with the SBI Chairperson as well. We expect some quick follow up,” Rajendra Dev said adding, “only by next year, will things really happen.”
Sharing some of the suggestions, he said, “Instead of closing branches located in close proximity, the bank can consider converting some into specialised branches. This would help redeploy the staff as well.”

To The Hindu Business Line

After the rightful decision of the UFBU at its meeting held on 11.05.2016 at Hyderabad to give the call for strike on 29.07.2016, we find that Government is fast going ahead with their plans for consolidation and merger.  You are aware recently on 17.05.2016, in a hurriedly held board meeting, through a table agenda, decision has been taken to proceed towards closure of 5 Associate banks and to be merged with SBI.
Link To Important Banking News on Bank Strike

Bank  unions oppose SBI merger, to observe strike on July 12,13-Chandigarh Times-16th June 2016


Employees are apprehensive over downsizing, closure of branches and redeployment by the SBI on the pretext of relocating the branches. They are demanding recovery of bad loans and action against defaulters.


Rajesh Sondhi, organising secretary, All-India State Bank of Patiala Employee Federation, said, “Instead of opting for a merger, the government should focus on controlling bad loans. The merger will not serve the purpose. It is against the interests of employees. Also, the five banks have contributed to the country’s growth and after the merger, they will lose their regional identity.”
Read Full News Published in Chandigarh Times on 16th June 2016

28 जुलाई को एसबीआई के सहयोगी बैंकों की हड़ताल
Amar Ujala 12th June 2016

वर्मा ने बताया कि भारतीय स्टेट बैंक के पांच सहयोगी बैंकों स्टेट बैंक ऑफ त्रावणकोर, स्टेट बैंक ऑफ मैसूर, स्टेट बैंक ऑफ हैदराबाद, स्टेट बैंक ऑफ बीकानेर एंड जयपुर और स्टेट बैंक ऑफ पटियाला के निदेशक मंडल की बैठक 17 मई को तत्काल बिना किसी पूर्व सूचना के बुलाई गई थी।

इस बैठक में एसबीआई के आदेश पर सभी सहयोगी बैंकों को बंद करने और एसबीआई द्वारा अधिग्रहण करने का एजेंडा लाया गया। एमएस वर्मा ने कहा कि एसबीआई प्रबंधन के विरोध में 21, 29 जून और 11 जुलाई को पांचों बैंकों के कर्मचारी प्रदर्शन करेंगे।

28 जुलाई को स्टेट सेक्टर बैंक इंप्लाइज एसोसिएशन और आल इंडिया बैंक इंप्लाइज एसोसिएशन के बैनर तले पांचों सहयोगी बैंकों में हड़ताल की जाएगी। इसके बाद भी अगर एसबीआई प्रबंधन ने अपना फैसला वापस नहीं लिया तो भविष्य में आंदोलन को और तेज किया जाएगा।


21-June-2016 19:03 IST
Clarification regarding News Report of Arrest of Tax Defaulters
Certain sections of the press have been carrying news reports today that Income Tax Department is going to arrest wilful defaulters of tax.

In this regard, it is clarified that no such statement has been authorised by the Income-tax Department. Though the provisions for arrest and detention by the Tax Recovery Officers in respect of the non-compliant tax defaulters are contained in the Income-tax Act, these are used extremely sparingly.

20-June-2016 17:11 IST
Quarterly Revision of Interest Rates for Small Savings Schemes
On the basis of the decision of the Government, interest rates for small savings schemes are to be notified on quarterly basis
On the basis of the decision of the Government, interest rates for small savings schemes are to be notified on quarterly basis. Accordingly, the rates of interest on various small savings schemes for the second quarter of financial year 2016-17, on the basis of the interest compounding/payment built-in in the schemes, shall be as under:

Instrument
Rate of interest w.e.f. 01.04.2016 to 30.6.2016
Rate of interest w.e.f. 01.07.2016 to 30.9.2016
Compounding frequency
Savings Deposit
4.0
4.0
Annual
1 Year Time Deposit
7.1
7.1
Quarterly
2 Year Time Deposit
7.2
7.2
Quarterly
3 Year Time Deposit
7.4
7.4
Quarterly
5 Year Time Deposit
7.9
7.9
Quarterly
5 Year Recurring Deposit
7.4
7.4
Quarterly
5 Year Senior Citizens Savings Scheme
8.6
8.6
Quarterly and paid
5 year Monthly Income Account Scheme
7.8
7.8
Monthly and paid
5 Year National Savings Certificate 
8.1
8.1
Annual
Public Provident Fund Scheme 
8.1
8.1
Annual
KisanVikasPatra
7.8 (will mature in 110 months)
7.8 (will mature in 110 months)
Annual
SukanyaSamriddhi Account Scheme
8.6
8.6
Annual


*****

AR/KA


Study-loan defaulters get harsh life lesson from ARC-The Hindu Business Line

LN Revathy

Coimbatore, June 20:  
Last month, J Padmapriya, a Coimbatore-based widow and mother of two, received a letter from Reliance Asset Reconstruction Company that had her reeling in shock.
The letter stated coldly that her son Radhakrishnan was in default on the ₹90,000 education loan he had taken from SBI in 2012 (for which she was guarantor), and that SBI had assigned all rights on the loan, which had been declared an NPA, to Reliance ARC. It directed Radhakrishnan to settle the outstanding amount of ₹1.22 lakh (including accrued interest) at one go, within 15 days.
Padmapriya acknowledges she and her son are in default, but says she was unable to repay the loan: her son was jobless for a year after completion of the course, by which time the moratorium on repayment expired, and interest began to accrue. She earns ₹6,000 a month and, struggling to survive, she fell behind on the EMI of ₹3,315. And, now, to be asked to pay ₹1.22 lakh in full is way beyond her capability, she laments.
Indigent borrowers
Nor is Padmapriya alone in her predicament. Other defaulters on education loans from SBI, many of whom are in indigent circumstances, are in a similar fix, with Reliance ARC hustling them to repay their outstandings within 15 days.
Nirmala (name changed on request), 23, whose mother works as a domestic helper, availed of a ₹2 lakh education loan in 2006, but secured a job placement only in 2011. By then, her loan outstanding had more than doubled, and although she has since made part-repayments, she still owed SBI ₹1.2 lakh last November, when she received a letter from Reliance ARC that claimed, shockingly, that she owed it ₹2.25 lakh.
A tearful Nirmala says that Reliance ARC is now “putting pressure” on her mother to settle immediately.
Foootnotes to a deal
Pitiful though their plight is, Padmapriya and Nirmala (and many others) are mere footnotes to larger, emotionless corporate deals that have touched their lives. In three tranches spread over 2015-16, SBI sold to Reliance ARC some 43,000 Education Term Loans (ETLs), corresponding to a total loan of ₹848 crore.
The bank’s ETL portfolio shrunk by ₹287 crore to ₹15,177 crore in FY 2016.
An SBI officer, who did not wish to be named, said the bank no longer had ownership of the ETL accounts, and so when the borrowers approached the branches, they were directed to Reliance ARC.
A communication from the SBI Corporate Office states: “While branches can accept the repayment and credit the amount into the Trust account of Reliance ARC, borrowers will have to obtain loan closure certificate from Reliance ARC only.”
Padmapriya says that when she sought an appointment with Reliance ARC staff, she was fobbed off. “When I explained that it would be impossible to settle the entire amount at once, he said, ‘we do not accept payment in monthly instalment. That is our policy’,” she recalls.
Financial illiteracy
A lack of understanding of how the education loan repayment schedule is structured has compounded the borrowers’ problems. Nirmala says she was unaware that she had to make a token remittance every month beyond the moratorium period so as not to be in default.
In other cases, SBI appears to have unfairly shifted the goalposts. “While the scheme provides for a 10-year repayment period for loans up to ₹10 lakh, SBI had fixed it at five years,” noted a banker, seeking anonymity.
Right now, a clutch of defaulters, caught between an SBI that has washed its hands of them and a stern-sounding Reliance ARC, is running around seeking help from any quarter. They are not sure which regulator or consumer court can help them.
And since even the overall mood has turned against defaulters of bank loans, even sympathy is in short supply for those in this predicament.


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