Submitted by (Prof.M.R.Badi, Bangalore) on Facebook today 28th august 2013
An agreement with unions on wage revision will be reached by March 2014.
All Banks have been alerted well in advance by RBI, Does IBA knows this !
RBI asks banks to beef up wage hike, pension provisioning
The central bank's move comes as the next wage revision kicks in from November
The decision on increase in wages and pensions in public sector banks is more than a year away, but the Reserve Bank of India (RBI) has already asked banks to start making adequate provisioning. That’s because banks will have to pay arrears from November 2012, even though the Indian Banks Association has informed banks that an agreement with unions on wage revision will be reached by March 2014.
The banking regulator told bankers at the post-monetary policy meeting that it would take a “very serious view” if banks are found making lower provisioning during the annual financial inspection report. RBI’s next round of annual inspection report will start from April 2013, in which the wage and pension provision figures will be examined. The last wage revision for 800,000 bank employees (7,00,000 from public sector banks and 100,000 from old private sector banks) was effective till October 31, 2012; so any new agreement will have to be effective from November 1, 2012 and banks will have to pay arrears.
The additional burden on banks during the ninth bipartite agreement was Rs 4,816 crore for wage revision on account for a 17.5 per cent wage hike and Rs 5,000 crore for pension.
PROVISIONING POINTS
• The Indian Banks Association has informed banks that an agreement with unions on wage revision will be reached by March 2014
• RBI has said it would take a “very serious view” if banks are found making lower provisioning during the annual financial inspection
• The provisioning for the next round of wage hike will reflect in banks’ balance sheet when they finalise the fourth quarter results
The provisioning for the next round of wage hike will reflect in banks’ balance sheet when they finalise the fourth quarter results.
RBI has said that banks should start making provisioning from the current quarter (January-March) in order to even out the burden. The regulator’s message also comes in the background of the country’s largest lender, the State Bank of India (SBI), deferring the pension provisioning requirement of the ninth bipartite agreement. SBI finally had to make a provision of close to Rs 8,000 crore from its capital reserves in the January-March quarter of 2010-11.
This had depleted the capital adequacy ratio of the bank. Banks are not allowed to make provision from capital reserves, without taking prior approval from RBI.
According to bankers who attended the meeting, the central bank has also asked banks to have some uniformity in the parameters while deciding on the provisioning requirement. “Parameters like discount rate, wage escalation, and return on investment should not vary widely among banks,” said a banker.
“In case, banks fail to take a decision on a uniformity. RBI will mandate the requirements,” he added.
Manojit Saha | Mumbai February 2, 2013 Last Updated at 00:54 IST
See this efficiency: Too.
5000 dabbawalas manage to deliver lunch to over 2 Lac Mumbaikars on time daily.
My Comment: (Prof.M.R.Badi, Bangalore)
CAR and NPA Provisioning is first priority as per III - Basel Norms as a result there would be less Profit show by each Banks, So further though RBI though asked all Banks for making Provisions for Wage Hike and Pension Payments, including arrears wef 01.11.2012 probably would be paid in May-June 2014, coinciding with Lok-Sabha Elections, This finds very crucial period for all Bankers to hope much. We doubt whether we get 15% wage hike at least or not ?
In last BPS we had sought 17.5%. Note RBI has cleaned it hand, now the ball is in the court of IBA and its Member Banks. God knows how UFBU and AIBRF and one more Group of Unions will bargain with justice for its Working members and its Retirees and Pensioners as well by removing all anomalies and earlier all discrimination too.
Remember in first two sitting only two points have been cleared - 1. Effective date : 01.11.2012
2.Merger of DA 4440 Points in old basics and nothing else on any issues. Other matters are still in cold storage. All must read UFBU's COD and our as on date - achievements.
We cordially invite your valuable comments in the general interest of Banking Community and its welfare at large, to make all concerned Groups, Unions,Retirees Associations, RBI being a Regularity Body, MOF, IBA and all Banks' Managements too understand well. Still lets all hope for best.
AIBEA Zindabad, AIBOA Zindabad, UFBU Zindabad, AIBRF Zindabad. All Banks Employees Unity Zindabad. Jai Hind. Jai ho.
The news with regard to provisioning for wage revision is more than 1 year old. As for the deadline for signing the 10th BPS by 31-03-2014, there is no official word from any quarters. Although it is desired that 10th BPS must be signed before 31st December, 2013, we have to wait and watch how the future rounds of talks proceed.
ReplyDeleteDoes anybody know the percentage of provisions made by banks on account of 10th BPS revision, from December, 2012 onwards?
UFBU "s so called leaders are none but A BUNCH OF JOCKERS.They are spineless and opportunist.They are just one type of DALAL of IBA.In previous Bipartite,they have cheated us.This time they are again going to cheat us.They should know that at least 50% wage hike is necessary to reach the minimum level compared to Coal India,Oil cos etc.Now we have realised that it will be better to be under PAY COMMISSION.Actually our so called leaders are negotiating not with MAA (mother) but with MASI (sister of mother).
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