Date :27thMAR 2015
MOST URGENT
To
Shri Hasmukh Adhia,
Secretary, Departmental of Financial Services,
Ministry of Finance, Jeevan Deep Building,
3rd Floor, 10, Parliament Street,
New Delhi -100001.
RE- ILLEGAL ARBITRARY DENIAL OF
1 100%DANEUTRALIZATION TO SENIOR CITIZENS WHO RETIRED FROM THE BANKS SERVICE PRIOR TO NOVEMBER2002.
2.DENIAL O0F FAMILY PENSION AS PAID TO GOVT AND RBI EMPLOYEES
3. DENIAL OF PENSION UPDATION FROM TIME TO TIME AS GIVEN TO GOVT AND RBI EMPLOYEES WHICH IS VIOLATIVE OF ARTICLE 14 AND16 OF THE CONSTITUTION OF INDIA.
4. Protection of Bank employees’ interest under Banks Nationalization Act, namely The Banking Companies (acquisition and transfer of undertakings) Act, 1970 and
5. honouring the Memorandum of Settlement dated 19.10.1993 between IBA and Officers Associations and Workmen Unions in toto.
In continuation of my letter dated 24thFeb,2015 & 20th march 2015 on the above subject which was delivered to your office on 27th Feb,2015 & 24th March respectively, I would like to state as under.
After making provision for bad and doubtful debts, depreciation in assets, contributions to staff and superannuation funds and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies, a corresponding new bank [may out of its net profits deal are a dividend and retain the surplus if any.
This section and sub section says that after making provision for
a. for bad and doubtful debts,
b. depreciations in assets,
c. contribution to staff and superannuation funds
d. and all other matters for which provision is necessary under any law, or which are usually provided for by banking companies and then the net profits arrived thereafter can be appropriated towards dividends. Therefore, the staff cost and superannuation funds ranks first among other things over the dividend to the owner.
The Parliament of the country speaks the will of the people of the country. When the will of people of the country is to protect the interest of the bank employees in such a manner, wherein their staff cost and superannuation benefits prevail over the net profits, the negotiating team representing the banks, cannot take a stand that there are no adequate profits, paying capacity of the banks is not sufficient. The present stand taken by the IBA and its member banks is against the Constitutional guarantees and protection given to the bank employees at the time of
However the staff expenses including superannuation benefits and Depreciation on assets are not available separately as they are all included in Operative Expense Rs. in crores.
PARTICULARS
|
2012
|
2013
|
2014
|
Deposits
|
5002013
|
5745697
|
6588934
|
Investments
|
1507270
|
1759056
|
1973285
|
Advances
|
3877307
|
4472845
|
5101054
|
Total assets
|
6039620
|
6961988
|
7966550
|
Gross NPA
|
117262
|
164462
|
227264
|
Net NPA
|
59162
|
89950
|
130360
|
From the above table, one can understand, the operating profit is increasing despite increase Gross and Net NPAs, which are not yielding any interest from the date of their NPA status. Further the provisions are increasing and net profit are declining, due to increase in Gross NPAs and Net NPAs. So the major portion of operating profit is eaten away by these NPAs. The Gross NPAs have almost doubled in two years period from Rs. 117262 crores to 227264 crores during 2012 to 2014 and Net NPAs have more than doubled in two years period from Rs. 59162 crores to 130360 crores, during 2012 to 2014.
Coming to the provisions as per section 10 (7) of Banking Companies ( acquisition and transfer of undertakings) Act 1970, tabular form as under gives better clarity.
Sr. No.
|
Provision on
|
Status prevailing now
|
1
|
for bad and doubtful debts
|
Provisions provided as per RBI directives, but identification of bad and doubtful debts were not strict and only on bad debts interest was not charged.
But after introduction reforms, NPAs are well defined, interest not being charged from the date of NPA status, Rate of provision for different types of NPAs is well defined and even on standard assets, provision is made as per international standards
There is no debate or discussion on this subject, it is automatic so to say, the provisions are mandatory even without adequate operating profits. Further resultant net loss, can embark into reserves and capital of the banks.
The sections say provision only for bad and doubtful debts, which are loss and doubtful assets. But the situation is the law does not recognize provision for sub standard and standard assets. These are made due to RBI guidelines. But legally and constitutionally speaking Law prevails over RBI guidelines, unless Law is suitably amended. However, logically, it is too much for the employees to bear the provisions on standard assets, when the question of wage revision comes, the IBA is harping on net profits of the bank, rather harping on operating profits as per this section.
|
2.
|
Depreciation in assets
|
Same is the position, well defined, Even Income Tax department has a say on provision on Depreciation. There is no debate or discussion on this subject; it is automatic so to say, the provisions are mandatory even without adequate operating profits. Further resultant net loss, can embark into reserves and capital
|
3
|
all other matters for which provision is necessary under any law, or which are usually provided for by banking companies
|
Again no question of discussion and debate on these matters which are necessary under law or a practice in vogue. It is only for automatic compliance by the bank.
|
4
| contribution to staff and superannuation funds | This item, though it is at par with the above items where provisions are made mandatorily, banks are not following in letter and spirit of the law passed by the Parliament of the country.
Labour has become very cheap for the men who are at the top. Though staff cost and superannuation benefit has prior charge over the net profits of the bank, it is not being followed by the dictatorial attitude of IBA and ignorant and hapless old and tired, ineffective horses of UFBU, leaving the serving and retired employees in misery.
Like other 3 matters, where provisions are well defined, the provision for staff matters are not defined and every time these UFBU leaders have to beg the IBA, instead of asserting the constitutional guarantees provided in Bank Nationalisation Act.
|
When the banks are providing provisions on STANDARD ASSETS AS PER INTERNATIONAL STANDARDS, the wage revision of serving employees and pension issues of retirees are not dealt even at the level of REGIONAL STANDARDS OR LOCAL AREA STANDARDS, LEAVE ALONE ON NATIONAL STANDARDS.
02. The clause 12 of the MEMORANDUM OF SETTLEMENT dated the 29th October, 1993 between IBA and Officers’ Associations and workmen Union says as under:
Provisions will be made by a scheme, to be negotiated and settled between the parties to this Settlement by 31st December, 1993 for applicability, qualifying service, amounts of pension, payment of pension, commutation of pension, family pension, updating and other general conditions, etc. on the linesas are in force in Reserve Bank of India.
Originally, a provision is made in the settlement dated 29.101993 to update the pension among other things. This settlement is bilateral settlement, wherein, both the parties to the settlement HAVE equal say in the matters covered in the settlement. But unfortunately, IBA drafted Pension Regulations unilaterally and UFBU leaders were mute spectators. So what has been implemented out of settlement dated 29.10.1993, is only a part, other part has to be implemented. Now the time is ripe with pension funds position is strong and sound. As IBA wanted an affordable and viable proposition is available.
However, the argument is that our pension scheme is on the lines as are in force in RBI. Definitely, it is on the lines as are in force in RBI. The RBI has amended its Pension scheme with improvement in the areas such as
1. The rate of pension will be 50% of the average emoluments for the 10 months or the last pay drawn which-ever is more beneficial to employee
2. Minimum pension raised to Rs. 3500/- pm
3. Service of 20 years will qualify for full pension
4. Proportionate pension will be payable for less than 20 years of service.
5. Ordinary rate of family pension will be 30% of the pay uniformly plus DR subject to a minimum of Rs.3500 pm and maximum of Rs. 24495 pm i e 30% of Grade F's existing scale.
So according clause 12, what has been amended in RBI Pension scheme, has to be automatically to be amended in PS banks pension schemes, by issuing an administration circular by DFS Government of India, consultation with RBI and why these negotiations and discussions. Further it is to be noted that second option of pension was not given to RBI employees, but it was given to PS banks employees. So there can be improvement over RBI pension scheme and but not rigidity. No law comes as hindrance to improve the service conditions of employees, where there is strong and sound financial position of pension funds of employees.
Yours faithfully,
( S Ramachandran )
PENSIONER,SENIOR CITIZEN AGE 76 YEARS
AND FORMER GENERAL MANAGER, BANK OF BARODA
(reproduced from allbankingsolutions.com)