Good News For Retired And Retiring Employees

AIBEA Circular - 10th BP Settlement and Gratuity
Circular No.27/136/2015/32 date 25.06.2015

Dear Comrades,

10^{th BP Settlement and Gratuity}

References are being made to us regarding Gratuity under the 10th BP Settlement signed recently on 25-5-2015. Gratuity in the Banks is payable to employees and officers both under the Gratuity Act, 1972 as well as under the provisions of our Bipartite Settlement for employees and as per OSR for officers whichever is higher. ( other than in SBI where Gratuity is paid only under the Act with a ceiling of Rs. 10 lacs )

Eligibility :

As per Bipartite Settlement	As per Gratuity Act
On retirement on superannuation	On retirement on superannuation
On resignation after 10 years’ service	On resignation after 5 years’ service
On termination of service	On disablement
On becoming incapacitated	On death of an employee
On the death of an employee

Eligible Amount:

As per Bipartite Settlement	As per Gratuity Act
One month Pay for each completed year of service (Max. 15 months) plus half month Pay for each year beyond 30 years’ service ( No maximum) Pay means Basic pay, Spl. Pay, Offg. Pay, PQP, increment portion of FPP.	15 Days wage x No. of years of service ( Max. Rs. 10 lacs) Wage means Basic Pay, Spl. Pay, Spl. Allowance, PQP, Offg. Pay, DA, Increment portion of FPP. 1 day = monthly wage/26 days

PAYMENT OF GRATUITY FROM 1.11.2012

1. In terms of Section 4 (5) of the Payment of Gratuity Act, 1972, Gratuity under Gratuity Act or BPS provisions whichever is higher is payable.

2. Hence for every retiring employee, Gratuity has to be calculated both under the Act and under BPS and higher of the two will be paid.

3. For those employees who have retired from November, 2012, Gratuity will be re-calculated both under the Act and as per 10th BPS and arrears/difference if any will be paid to them.

Example:

a) A Special Assistant (Graduate and CAIIB) with 8 Stagnation Increments and retiring in July, 2015 after 40 years’ service

	Eligibility as per the Act	Eligibility as per BPS	Paid/ Payable
Under 9th BPS	58,342/ 26 x 15 x 40 = 13,46,353 Max. Rs. 10 lacs	28110 x 20 = Rs. 5,62,000	10 lacs
Under 10th BPS	62,758 / 26 x 15 x 40 = 14,48,260 Max Rs. 10 lacs	47270 x 20 = Rs. 9,45,400	10 lacs

^{b) A Daftary with 8 Stagnation Increments and retiring in July, 2015 after 40 years’ service}

	Eligibility as per the Act	Eligibility as per the BPS	Payable
Under 9th BPS	30,930/ 26 x 15 x 40 = 713,770	14890 x 20 = 2,97,800	713,770
Under 10th BPS	33,204 /26 x 15 x 40 = 766,250	25000 x 20 = 5,00,000	766,250
Difference of Rs. 52,480 will be paid

^{c) An Officer retiring in July, 2015 after 40 years’ service
( with Old Basic pay Rs. 25,700 and revised Basic pay Rs. 42,020)}

	Eligibility as per the Act	Eligibility as per BPS	Paid/Payable
Previous	54,150 / 26 x 15 x 40 = 12,49,615 Max. Rs. 10 lacs	25700 x 20 = Rs 5,14,000	10 lacs
Revised	56,180 / 26 x 15 x 40 = 12,96,460Max Rs. 10 lacs	42020 x 20 = Rs 8,40,400	10 lacs

d) An Officer retiring in July, 2015 after 40 years’ service

( with Old Basic pay Rs. 40400 and revised Basic pay Rs. 66070 )

	Eligibility as per the Act	Eligibility as per BPS	Paid/Payable
Previous	85,123/ 26 x 15 x 40 = 19,64,377 Max. Rs. 10 lacs	40,400 x 20 = Rs 8,08,000	10 lacs
Revised	88335 / 26 x 15 x 40 = 20,38,500 Max Rs. 10 lacs	85020 x 20 = Rs 13,21,400	13,21,400
	Difference of Rs. 3,21,400 will be paid

e) An Officer retiring in July, 2015 after 40 years’ service

( with Old Basic pay Rs. 52000 and revised Basic pay Rs. 85000 )

	Eligibility as per the Act	Eligibility as per BPS	Paid/Payable
Previous	1095654/ 26 x 15 x 40 = 25,28,400 Max. Rs. 10 lacs	52,000 x 20 = Rs 10,40,000	10.40 lacs
Revised	113645 / 26 x 15 x 40 = 26,22,577 Max Rs. 10 lacs	85020 x 20 = Rs 17,00,400	17.00 lacs
	Difference of Rs. 6.60 lacs will be paid

<sup>Our units should ensure that such arrears of Gratuity wherever eligible is paid to the concerned retirees.

With greetings,

Yours Faithfully,
AIBEA</sup>

RBI RELEASES 45 EARLY WARNING SIGNAL ABOUT FRAUD/WRONG DOING IN LOAN ACCOUNT

The Reserve Bank of India made available an illustrative list of Early Warning Sign...als (EWS) which should alert bank officials about wrongdoings and frauds in loan accounts. In the background of increasing incidences of frauds in general and in loan portfolios in particular, the Reserve Bank of India brought into force the systemized framework for fraud risk management in banks. 

 The framework also provided the banks a list containing some 45 early warning signals which should immediately put the bank on alert regarding a weakness or wrong doing in a loan account which may ultimately turnout to be fraudulent. Individual banks may add other alerts/signals based on their experience, client profile and business models.

The one or more early warning signals so complied by a bank would form the basis for classifying an account as Red Flagged Accounts (RFA). In case the account is classified as a RFA, the Fraud Monitoring Group (FMG) will act upon for further investigations or remedial measures necessary to protect the bank’s interest within a stipulated time which cannot exceed six months.

The bank upon identifying the fraud should also report the matter immediately to investigative agencies for instituting criminal proceedings against the fraudulent borrowers, besides reporting the same to Reserve Bank as per the above framework

  The 45 Early Warning signals provided by the Reserve Bank are as under
Default in payment to the banks/ sundry debtors and other statutory bodies, etc., bouncing of the high value cheques

 -Raid by Income tax /sales tax/ central excise duty officials.-
-Frequent change in the scope of the project to be undertaken by the borrower.-
-Under insured or over insured inventory.-
-Invoices devoid of TAN and other details.-
-Dispute on title of the collateral securities.-
-Costing of the project which is in wide variance with standard cost of installation of the project.-
-Funds coming from other banks to liquidate the outstanding loan amount.-
-Foreign bills remaining outstanding for a long time and tendency for bills to remain overdue.-
-Onerous clause in issue of BG/LC/standby letters of credit.-
-In merchanting trade, import leg not revealed to the bank.-
-Request received from the borrower to postpone the inspection of the godown for flimsy reasons.-
-Delay observed in payment of outstanding dues.-
-Financing the unit far away from the branch.-
-Claims not acknowledged as debt high.-
-Frequent invocation of BGs and devolvement of LCs.-
-Funding of the interest by sanctioning additional facilities.-
-Same collateral charged to a number of lenders.-
-Concealment of certain vital documents like master agreement, insurance coverage.-
-Floating front / associate companies by investing borrowed money.-
-Reduction in the stake of promoter / director.-
-Resignation of the key personnel and frequent changes in the management.-
-Substantial increase in unbilled revenue year after year.-
-Large number of transactions with inter-connected companies and large outstanding from such companies.-
-Significant movements in inventory, disproportionately higher than the growth in turnover.-
-Significant movements in receivables, disproportionately higher than the growth in turnover and/or increase in ageing of the receivables.-
-Disproportionate increase in other current assets.-
-Significant increase in working capital borrowing as percentage of turnover.-
-Critical issues highlighted in the stock audit report.-
-Increase in Fixed Assets, without corresponding increase in turnover (when project is implemented).-
-Increase in borrowings, despite huge cash and cash equivalents in the borrower’s balance sheet.-
-Liabilities appearing in ROC search report, not reported by the borrower in its annual report.-
-Substantial related party transactions.-
-Material discrepancies in the annual report.-
-Significant inconsistencies within the annual report (between various sections).-
-Poor disclosure of materially adverse information and no qualification by the statutory auditors.-
-Frequent change in accounting period and/or accounting policies.-
-Frequent request for general purpose loans.-
-Movement of an account from one bank to another.-
-Frequent ad hoc sanctions.-
-Not routing of sales proceeds through bank.-
-LCs issued for local trade / related party transactions.-
-High value RTGS payment to unrelated parties.-
-Heavy cash withdrawal in loan accounts.-
-Non submission of original bills.-

Public sector banks should disclose details of bad debts, says Delhi High Court -25th June 2015
NEW DELHI: Public sector banks should disclose details of cases pertaining to persons and establishments whose bad debts of over Rs 100 crore have been written off, the Delhi High Court has held.

This disclosure involves an element of public interest and tax payers have a right to know the manner in which state- run banks sanctioned them, Justice Rajiv Shakdher said

"Prima facie, in my view, this information may have to be disclosed," he said.

The court's order came on a plea filed by the State Bank of India (SBI) against a January 20 order of the Central Information Commission (CIC) asking the bank to supply to RTI applicant Raju Vazhakkala information regarding total Non- Performing Assets (NPAs) written off between 2004 and 2013.

The bank contended that it has a fiduciary relationship with the account holders and the information should be exempted from disclosure under Section 8(1)(e) of the RTI Act.

It also submitted that Section 44 of the SBI Act 1955 also prohibits disclosure of customer's information to any third party.

The judge brushed aside the SBI's contention and observed that the reason "I have come to this prima facie conclusion is this: the petitioner (SBI) is undoubtedly a nationalised bank, which on its own is showing written off as NPAs, its loan accounts having outstanding of Rs 100 cr or more.

"The sheer extent of the write-off would, in my view, perhaps, inject an element of public interest in the matter, which is the exception provided for in Section 8(1)(e) of the RTI Act, 2005," the court added.

It also said this "matter needs further examination" and issued notice to Vazhakkala, a Kochi resident.

The court also asked the RTI applicant to file counter affidavit within four weeks.

"Rejoinder, if any, be filed before the next date of hearing. List on September

Read more at:
http://economictimes.indiatimes.com/articleshow/47804719.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Finance Ministry Assessing Capital Requirement of PSU Banks: Report-NDTV

The Finance Ministry has asked public sector banks to submit their immediate and mid-term capital requirement from the government to comply with global capital adequacy norms and also to fund their growth plans.

"Besides current fiscal need, banks have been asked to submit five-year capital requirement," sources said.

The government has started assessment of capital requirement of public sector banks. It has already received presentations of six public sector banks-- UCO Bank, United Bank of India, Allahabad Bank, Punjab National Bank, Punjab & Sindh Bank and Oriental Bank of Commerce.

Presentations by State Bank of India, Union Bank of India, IDBI Bank and Central Bank of India were made today while Bank of India, Bank of Baroda, Dena Bank and Bank of Maharashtra would make their presentations tomorrow in Mumbai.

South-based Andhra Bank, Indian Overseas Bank, Corporation Bank, Canara Bank, Syndicate Bank and Vijaya Bank would make presentation on July 3 in Bengaluru.

The presentation includes overall fund raising roadmap, including from internal accrual, selling of their non-core assets, divestment of government stake and fund support from the Centre.

Last year, Finance Minister Arun Jaitley had said that to be in line with Basel-III norms, there is a requirement to infuse Rs 2.40 lakh crore as equity by 2018 in public sector banks.

Keeping the huge capital requirement in the mind, the Union Cabinet in December 2014, allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III capital adequacy norms.

The Cabinet asked the PSBs to broad base retail shareholding while going in for the fund raising.

Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, state-run SBI holds majority stake.

Last fiscal, the government infused Rs 6,990 crore in nine public sector banks, including SBI, Bank of Baroda, Punjab National Bank for enhancing their capital and meeting Basel III norms.

The total government support provided to PSU banks towards capitalisation during the past four years was Rs 58,634 crore.

Tax payers need to know how PSBs write-off bad loans: HC-Indian Express

Disclosure involved an element of public interest; tax payers have right to know.

Why should public sector banks (PSBs) not disclose details of cases where they have written off thousands of crore of rupees as bad debts?

 

After all, these banks do not only function on deposits from people but their equity capital is also structured on the tax payers’ money.

 

Observing this, the Delhi High Court has prima facie held as bad the PSBs resistance in divulging information about the entities which availed the benefits of their loans being written off as bad debts or unrecoverable amount.

 

Justice Rajiv Shakdher, during a recent hearing, observed that this disclosure involved an element of public interest and tax payers have a right to know the manner in which PSBs sanctioned them.

 

The judge noted there were several cases wherein the banks wrote off debts to the tune of Rs 100 crore or more while the government kept infusing tax payers’ money in the form of equity capital. -

 

 

See more at: http://indianexpress.com/article/business/business-others/tax-payers-need-to-know-how-psbs-write-off-bad-loans-hc-2/#sthash.XV9tQpKG.dpuf