Earlier this month, RBI Governor Raghuram Rajan was very critical of banks for not passing on the rate cut benefits to the borrowers.
As many as 70 banks, including 23 public sector lenders, have not passed on the benefits to their consumers from RBI’s two rate cuts so far in 2015.
Reserve Bank of India cut the repo rate by 0.25 per cent on January 15 and further by 0.25 per cent on March 4. Out of 91 scheduled commercial banks in the country, a total of 21 banks have lowered their base rates after RBI’s rate cut decisions, Minister of State for Finance Jayant Sinha said on Tuesday. These include four public sector banks, six from the private sector and 11 foreign banks.
The reduction in base rates has been in the range of 0.1-0.5 per cent so far. This leaves as many as 70 banks that have not lowered their rates, despite RBI easing its monetary stance twice. “Following the reduction in the policy rate, out of 91 scheduled commercial banks, 21 banks reduced their base rates in the range of 0.1-0.5 per cent so far (up to April 15),” said Mr. Sinha, in a written reply to a Rajya Sabha question.
Accordingly, he said, the weighted average lending rates on fresh rupee loans sanctioned by banks for housing and vehicle loans have also come down in the range of 8.53 basis points during the same period.
There are 27 public sector banks, 20 private sector and 44 foreign banks with scheduled commercial bank license in the country. PSU banks have 70 per cent market share. In RBI’s last monetary policy meeting earlier this month, Governor Raghuram Rajan was very critical of banks for not passing on the rate cut benefits to the borrowers.
A recent study paper from the International Monetary Fund (IMF) also pointed out that banks in India resist passing on RBI’s rate cuts to consumers, although they are rather quicker in responding to rate hikes by the central bank. It takes 13 months on an average for pass-through from a change in the RBI’s policy rate to the interbank rate.
Thereafter, it takes over nine months for change in deposit rates for customers and a much longer period of nearly 19 months in case of lending rates, the study found.
27-April-2015 18:35 IST
PM donates one month salary to PMNRF
The Prime Minister, Shri Narendra Modi, has donated one month's salary to the Prime Minister's National Relief Fund, for assistance to those affected by the recent earthquake. My Views On Bipartite Settlement
Now It is crystal clear that United Forum of Bank Unions committed a mistake by signing adhoc MOU with IBA in the month of Fab 2015 which contained a dubious clause of 2% restriction in rise of Basic Pay after merging of well agreed DA.
UFBU had failed in achieving full DA merger upto November 2012 and agreed to suggestion of IBA to restrict it to November 2011. It failed to achieve 25% growth in wages and it failed to achieve 5 days banking for which it struggled with ten lac bank staff for 30 months. Past is past, we should now make effort to brighten our future accord.
In view of inordinate delay in signing of X th Bipartite settlement, it is now suggested that UFBU should submit its Charter of Demand for XI th Bipartite Settlement immediately so that amicable settlement is signed with IBA on due date that is November 2017.It should also be kept in vision the probable shape of 7th pay commission report for central government employees and probable price rise during coming few years before drafting fresh Charter of Demand.
UBFU should at least start consultation process without delay with various units so that it takes a good shape before it is presented to IBA. Similarly bank staff who were annoyed and who are annoyed with present leaders and who formed new entity to fight for respectable wage hike should now renew their effort in the direction which thy think fittest. They may suggest best pay scale for XI the bipartite settlement to UFU or they ma ask for change in leadership as they are accusing present leadership since long.
Holidays declared by States are excessive: Indian Banks’ Association -Hindu business Line-29.04.2015
Thiruvananthapuram, April 28:
Indian Banks’ Association (IBA) feels that bank holidays declared under the Negotiable Instruments Act, 1881, by various States are ‘excessive’ and need to be rationalised.
A meeting of the managing committee of the IBA, which represents management of member banks, is learnt to have made known its view during discussions on ringing in a five-day week in the banking sector.
Consensus ready
It may be recalled that as part of the wage revision under the 10th bipartite settlement, a memorandum of understanding was signed on February 23 between the IBA and workmen unions/officer associations. A consensus was arrived at that every second and fourth Saturdays of the month will be holidays and the other Saturdays will be full working days for bank branches/offices.
It may be recalled that as part of the wage revision under the 10th bipartite settlement, a memorandum of understanding was signed on February 23 between the IBA and workmen unions/officer associations. A consensus was arrived at that every second and fourth Saturdays of the month will be holidays and the other Saturdays will be full working days for bank branches/offices.
The matter was discussed in the managing committee of the IBA (represented by public sector banks, private sector banks, foreign banks and cooperative banks) at its meeting on April 7.
After detailed deliberations, the members agreed that there was a case for implementation of a five-day week in banks.
This would require that clearing houses, RTGS/NEFT and currency chests are also closed on second and fourth Saturdays.
The IBA has already taken up the matter with the Reserve Bank of India seeking its consent to enable it to take up the matter with the Government and the Finance Ministry for issuing necessary Gazette notification. It was here that the IBA managing committee felt that holidays declared under the Negotiable Instruments Act, 1881, by various State Governments needed to be rationalised.
The committee felt that the IBA may take up with the Centre the case for rationalisation of bank holidays under the Act.
The IBA’s line of thought was given expression in a letter to the sponsor banks of regional rural banks, seeking their view on having second and fourth Saturdays as holidays and other Saturdays as full working days.
Their input will help usher in uniformity across the industry and ‘enable us at the earliest to proceed further in the matter,’ the letter said.
It went on to add that “we have already taken up the matter regarding rationalisation of bank holidays under the Negotiable Instruments Act with the Finance Ministry.
“We have also requested the Reserve Bank to consider suspension of clearing functions and RTGS/NEFT on second and fourth Saturdays and have full-day clearing services on other Saturdays like any other weekday.”
Employees who opt for VRS cannot be on same footing as others: Supreme Court
There is no violation of principle of equal pay for equal work if persons, retiring in normal course, are treated differently with those who opt for special voluntary retirement scheme (VRS), the Supreme Court has said. The bench comprising Justices Anil R Dave and Shiva Kirti Singh said employees, opting for VRS, form a separate class in relation to those retiring in normal course.It said the employees, who took VRS, are not entitled to enhanced pensionery benefits which are being given to others with retrospective effect.
"True, that those who retired under the Scheme did the same work which was being done by those who retired in normal course, but one cannot forget the fact that those who retired under the Scheme got substantially higher retirement benefits," the bench said.
The employees who retired under the Scheme form a separate class of employees who were given many benefits, which are not given to employees retiring in normal course. If they all form a separate class, by no stretch of imagination it can be said that all those who retired under the Scheme and those who retired in normal course, are similarly situated," it said.
The bench passed the verdict on a bunch of petitions filed by employees of five nationalized general insurance companies who prematurely retired on certain conditions with some special benefits under a scheme called
"General Insurance Employees Special Voluntary Retirement Scheme, 2004". After retirement of several employees under the scheme, the insurance companies, on December 21, 2005, came up with a notification giving benefit of revision of pay with retrospective effect from August 1, 2002, provided the employees were in service on or after August 1, 2002.
The retired employees under the scheme sought revision of their pension saying that they were in service on August 1, 2002 and they are entitled for higher pension.
RBI directs banks to strictly follow 'Mandatory Leave' policy-IBN
Coming down heavily on banks for not implementing mandatory leave policy effectively, the Reserve Bank on Thursday said that employees posted at sensitive areas are required to compulsorily avail leave of about 10 days in a single spell every year.
This comes after 'forensic scrutiny on guidelines for prevention of frauds' of RBI had found that the policy of mandatory leave was not being implemented effectively by the banks, leading to an increase in operational risks.
As per the guidelines, banks are required to have a policy for staff rotation and mandatory leave for their employees positioned in sensitive positions or areas.
Latest News from Ministry of Finance
Government of India via Ministry of Finance has vide their letter no.F N No. 6/22/95-IR dated 16.04.2015 has declared banking industry to be a public utility service in pursuance of the provisions of sub-clause (VI) of the clause (n) of section 2 of the Industrial Dispute Act 1947 (14 of 1947) for a period of six months w.e.f. 21st April 2015.
Sd by Sri Manish Kumar
Under Secretary to the government of India
Write off all loans, farmers urge Union and State governments-The Hindu 24th April 2015
Farmers carried empty pots on their heads to highlight their plight at the hands of the Union and State governments at the grievances redress meeting held here on Friday.
The Union and State governments are turning a blind eye to the hardship faced by hapless farmers and were compounding their misery by increasing credit interest rates and resorting to advertisement of defaulters’ names in advertisements for repayment of borrowed loans, the agitated farmers told officials present.
Representing farmers’ cause, district president of the Tamilaga Vivasayigal Sangam Kakkarai Sukumaran, who led the agitation, said that nature had played havoc with the fortunes of the farmers between 2011 and 14. More number of farmers were taking the extreme step of ending their life because of stress created by farm crisis.
But the Union and the State governments were not helping the case of the pitiable farmers but were only aggravating their misery through anti-farmers measures. That must end, he demanded and sought waiver of all farm loans.
When farmers staged the protest inside the meeting hall, District Revenue Officer Chandrasekaran, who was presiding over the proceedings, asked them whether they had any grievance with regard to the State government to which farmers took objection and walked out of the meeting.
Tamil Nadu Vivasayigal Sangam district secretary Samy Natarajan wanted the State Government to dredge irrigation and drainage channels in the district ahead of the water release from the Mettur Dam.
Sugarcane growers' association leader Govindarajan wanted the State government to extend Rs. 4,000 a tonne.
Cauvery Delta Vivasyigal Sangam district president Ravichandran wanted the State government to launch small dairies in the rural areas to preserve the dwindling cattle numbers and proliferation of packed milk even in villages.
CBI probing loan write-off by banks-Money Control 29 November 2010
The Central Bureau of Investigation (CBI) is looking into bad loan write-offs by some banks and financial institutions involved in a bribes-for-loans scandal, the Times of India reported on Monday.
The Central Bureau of Investigation (CBI) is looking into bad loan write-offs by some banks and financial institutions involved in a bribes-for-loans scandal, the Times of India reported on Monday.
Two of the banks, Punjab National Bank and Bank of India , have written off about Rs 400 crore (USD 87 million) in the first three months of this fiscal year, the newspaper said, without saying where it got the information from.Eight executives from India's public and private financial institutions have been arrested in the scandal.
Those arrested include senior officials at state-run Central Bank of India , Punjab National Bank and Bank of India.
The Times of India said a majority of the bad debt write-offs include defaults on loans extended to the real estate sector.
Officials at the banks and the investigative agency could not immediately be reached by Reuters for comment.
http://www.moneycontrol.com/news/business/cbi-probing-loan-write-off-by-banks_501845.html
Rs 1 lakh crore bad loans of corporates written off: RBI-Times of India -17.11.2013
MUMBAI: Data collected by Reserve Bank of India over a period of one year blows the lid off what goes as loan classification in banks. In a presentation at the annual bankers' conference, RBI deputy governor K C Chakrabarty showed how banks have sacrificed over Rs 1 lakh crore by writing off bad loans to corporates, which is much higher than Union finance minister P Chidambaram's farm loan waiver in 2008—a move that received flak from the industry.
Under the Debt Waiver and Debt Relief Scheme, 2008, the Centre had waived off around Rs 60,000 crore to farmers.
"In the last 13 years, banks have written off 1 lakh crore and 95% of these are large loans. Everyone talks of the farm loan write-off, but it is the medium and large enterprises segment that has a 50% share in NPAs," said Chakrabarty.
http://timesofindia.indiatimes.com/business/india-business/Rs-1-lakh-crore-bad-loans-of-corporates-written-off-RBI/articleshow/25905990.cms
Bad Loan Write-Offs Double to Rs 42,477 Crore in 3 Years-NDTV 21 Novembr 2014
New Delhi: The amount of bad loans written off or restructured by public sector banks has more than doubled in the three years to March 2014.
The rise in bad loans is being attributed to the slowdown in the economy, which slipped to below-5 per cent growth levels in two consecutive financial years - 2012-13 and 2013-14.
The loans written off/compromised by PSU banks soared from Rs 20,752 crore in 2011-12 to Rs 32,992 crore in 2012-13 and further to Rs 42,447 crore in 2013-14, data from the Reserve Bank of India (RBI) showed.
RBI Governor Raghuram Rajan has been highlighting the problem of rising bad loans in the banking sector.
He had earlier said that the "total write offs of loans made by the commercial banks in the last 5 years is over Rs 1.61 lakh crore, which is 1.27 per cent of GDP".
"To put this amount in perspective -- (it) would have allowed 1.5 million of poorest children to get a full university degree from the top private universities in the country, all expenses paid," he had said.
In order to deal with the problem of bad loans, the RBI recently issued a comprehensive framework for revitalizing distressed assets in the economy.
The framework outlines the corrective action plan that will incentivize early identification of problem cases, timely restructuring of accounts which are considered to be viable and taking prompt steps by banks for recovery or sale of unviable accounts.
PSU banks accounted for over 90 per cent of total non-performing assets (NPAs) that the banking sector registered in 2013-14.
Of Rs 2.40 lakh crore gross NPAs reported by the Indian banking system in 2013-14, Rs 2.16 lakh crore was accounted for by the public sector banks.
Private sector banks had gross NPAs of Rs 22,738 crore as of March 31, 2014.
http://profit.ndtv.com/news/industries/article-bad-loan-write-offs-double-to-rs-42-477-crore-in-3-years-716098
Value Of Write Off Of Bad Loan Is More Than Total Wage Bill Of Bank Staff
SBI has highest number of branches based at rented locations-Economic Times
( My Comment :- Bank can sacrifice Rs.1.61 lac crore in write off of bad loans in five years but cannot afford payment of even half of it for respectable wage hike of Bank Staff who work day and night for the safety and security of bank and for all comfort for people of India.)
NEW DELHI: The country's largest bank State Bank of India (SBI) has the highest number of branches running from rented facilities among public sector banks.
A total 85,356 branches of all public sector banks were running from rented buildings.
As of December 19, 2014, as many as 15,570 branches of SBI were running from rented accommodations, followed by Punjab National Bank with 6,596 such branches.
Canara Bank was running 5523 branches from rented places, and Bank of Baroda, 4,865 branches. The number of such branches for Bank of India and Union Bank was at 4,516 and 4,109 respectively.
However, as many as 4,699 branches of PSU banks running from rented facilities were pending lease renewal, according to an official data .
"Government has issed an advisory to all public sector banks that banks must ensure to renew all leases as per the contractual arrangement," as per the data report. Also, government has asked PSU banks to list out the pending cases for renewal in their boards once in six months.
( My Comment :- Bank can sacrifice Rs.1.61 lac crore in write off of bad loans in five years but cannot afford payment of even half of it for respectable wage hike of Bank Staff who work day and night for the safety and security of bank and for all comfort for people of India.)
NEW DELHI: The country's largest bank State Bank of India (SBI) has the highest number of branches running from rented facilities among public sector banks.
A total 85,356 branches of all public sector banks were running from rented buildings.
As of December 19, 2014, as many as 15,570 branches of SBI were running from rented accommodations, followed by Punjab National Bank with 6,596 such branches.
Canara Bank was running 5523 branches from rented places, and Bank of Baroda, 4,865 branches. The number of such branches for Bank of India and Union Bank was at 4,516 and 4,109 respectively.
However, as many as 4,699 branches of PSU banks running from rented facilities were pending lease renewal, according to an official data .
"Government has issed an advisory to all public sector banks that banks must ensure to renew all leases as per the contractual arrangement," as per the data report. Also, government has asked PSU banks to list out the pending cases for renewal in their boards once in six months.
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