The huge NPAs of Public Sector Banks is the contribution of the members of IBA. The (ir) responsible people get absolved of the accountability as they get their sanctions approved by the boards of banks by making the boards a tool for easy escape. While squandering public money as bad loans they had not been paying compensation for labour, thus creating a slave dynasty in independent India in its banking industry, bringing shame to the government and to the nation. The worst hit are the senior citizens who toiled in banks in their heydays, whose retirement benefits are heinously looted. Their pension is based on the wages of the employees on rolls and is not revised with wage revision taking place from time to time. With scant respect to the Indian Parliament that sanctioned the Pension Regulations of banks, due pension is denied in banks. In gross breach of regulation 56 which makes it limpid that Pension Scheme in banks is on the same pattern of Central Civil Pension, pension in banks is never revised ever since its inception in 1995, thus defeating the very purpose of it.
THE MISCHIEF TO THE SENIOR CITIZENS, WHO DESERVE CARE EMPATHY OF THE GOVERNMENT, IS DONE WHEN PENSION FUNDS OF ALL PUBLIC SECTOR BANKS HAVE AMPLE MONEY TO PAY TWO TO FOUR TIMES THE PRESENT PENSION TO ALL THEIR PENSIONERS AND WHEN PAYMENT OF PENSION DOES NOT IN ANY WAY AFFECT THE PROFITS OF THE BANKS AND THE GOVERNMENT TOO DOES NOT HAVE TO MAKE A BUDGETARY ALLOCATION FOR IT. IBA PUTS THE GOVERNMENT AND THE NATION TO SHAME THROUGH ITS NEFARIOUS ACTIONS AND MAKES THEM UNPOPULAR SINCE PUBLIC SECTOR BANKS ARE “STATE” AND ARE MADE INSTRUMENTAL TO THE EVIL GAMES. IT IS THUS TRANSFORMING THE SACRED CONSTITUTION OF INDIA INTO A SHOW PIECE BY PERPETRATING DISCRIMINATIION OF AN EXTREME NATURE, PUSHING THE BANK EMPLOYEES INTO THE NETHERWORLD.
Initially, when the Pension Scheme was commissioned in banks through the BankEmployees’ Pension Regulations in 1995 as a piece of subordinate legislation pursuant toBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980 , public sector banks, at the behest of IBA, kept majority of employees outside the scheme by infusing a clause under regulation 22 (4) (b) which gave banks powers to forfeit the entire past services of an employee for participation in strike and had the effect of depriving pension to the employee. This was detrimental to an employee opting for pension asPension Scheme substituted the CPF Scheme and he had to irrevocably surrender his EPFbalance to the Pension Fund for joining Pension Scheme. Again, it was discriminatory as participation in strike would affect only the employee opting for pension who will lose his terminal benefit of Pension on participation in strike and those remaining in CPF Scheme would not lose their terminal benefit of CPF.
IBA INTERCEPTED AND TRESPASSED THE GOVERNMENT DIRECTIVE VIDE F NO.4/8/4-95-IR DATED 24TH DECEMBER, 1997, RECEIVED BY IT ON 27TH DECEMBER, 1997, DIRECTING IT TO ADVISE MEMBER BANKS SCRAP THE STRIKE CLAUSE IN REGULATION 22 (4) (B) AND TO GIVE EFFECT TO IT, Though member banks amended the regulation, they did not give effect to it by extending options to those who could not opt for pension because of the presence of the deleted clause in it. To cite an example, Union Bank of India clandestinely kept the amendment in camera and published it among employees AFTER AN INORDINATE DELAY OF 57 MONTHS OF THE GOVERNMENT DIRECTIVE through its Staff Circular No.4904 dated 8thOctober, 2002 only, THAT TOO WITHOUT EXTENDING THE INTENDED FRESH OPTION TO THE TARGET GROUP, THUS THWARTING THE GOVERNMENT DIRECTIVE. IBA and the key men of banks thus duped nearly six lakhs of bank employees, depriving them of their statutory right released by the government, exposing them to destitution as the QUID PRO QUO for serving the banks during their lifetime. It put about 50,000 plus retired bank employees in cross roads for about a decade without pension, subjecting them to destitution.
It was after a decade of struggle I made with Union Bank of India, IBA and labour organizations that IBA signed a Joint Note on 27.04.2010 extending fresh options to those who missed it earlier. BUT WHILE RECTIFYING THE SINGLE ANOMALY OF NOT GIVING OPTION, IBA IMPLANTED MULTIPLE ANOMALIES IN THE PENSION SCHEME IN DEROGATION OF THE PENSION STATUTE by extending the option subject to untenable conditions which are illogical, irrational and discriminatory making them unconstitutional also as stated infra:
01. Employees joining Pension Scheme were given pension from an irrelevant date of 27.11.2009 when regulation 52 (1) of Pension Regulations stipulated that a pension shall become payable on the day following the date on which an employee retires.
02. Retired employees opting for pension shall pay to the Pension Fund a contribution of 56 percent of CPF paid on retirement (in addition to refund of CPF) and employees on rolls a sum equivalent to 2.8 times pay for November, 2007 when regulation 5 (3) and 11 categorically fixed the banks as the sole contributor to the Pension Fund.
Both the conditions intercepted the Pension Regulations. The Boards of banks are specifically prohibited framing an amendment which prejudices what is done earlier under a regulation vide sub-sections 1 and 4 of Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1970/1980. IN SHORT, IT CAN BE NOTICED THAT THE JOINT NOTES IS DE JURE VOID AS IT IS INCONSISTENT WITH THE ACT.
The Joint Note was in the nature of amending the relative Pension Regulations. It stipulated as conclusion 10 in it that the due procedure of amending the PensionRegulations, vide section 19 (4) of the Banking Companies (Acquisition and Transfer ofUndertakings) Act, 1970/1980 shall be done by IBA by forwarding it (Joint Note) along with the scheme of pension to the government for laying in the Houses of the Parliament for their nod. This due procedure, which was to be done as soon as it was signed, is remaining undone albeit lapse of six years now. THE JOINT NOTE THUS GOT OBLITERATED AND BECAME VOID. IT IS ON THE BASIS OF THIS VOID JOINT NOTE THAT IBA MADE PUBLIC SECTOR BANKS DENY PENSION TO THE RETIRED FROM THE DATE OF RETIREMENT TO 27.11.2009 IN BREACH OF REGULATION 52 (1) AND RAISED FROM THE BENEFICIARIES OF PENSION, A CONTRIBUTION TO THE PENSION FUNDS OF BANKS (WHICH THE BANKS THEMSELVES ARE TO CONTRIBUTE PURSUANT TO THE PENSION REGULATIONS) IN BREACH OF REGULATIONS 5 (3) AND 11 OF THE PENSION REGULATIONS.
The Joint Note was discriminatory, irrational and unconstitutional and could never be framed by anyone with a trace of sense and wisdom on the following grounds:
01. Retired employees constituted a similar manner of people who are to be treated similarly. Some of them got pension from the date of retirement while other were denied pension from the date of retirement to the arbitrary date of 27.11.2009.
02. Some people lost pension for periods spanning about 10 years while some others lost it for one month and the remaining did not lose it for any day.
03. One who retired ten years back and another who retired one month prior to the date of the Joint Note had to pay the very same 56 percent of CPF paid on retirement. The loss to some people was to the tune of Rs. 8.00 to Rs.10.00 lakhs while some lost to the tune ofRs.1.20 lakh only.
04. Employees on rolls had to pay 2.8 times pay for November, 2007 while their counterparts who opted earlier did not have to pay anything.
IT DESERVES SPECIAL MENTION HERE THAT THE OPTION GIVEN THROUGH THE JOINT NOTE WAS THAT TO BE EXTENDED TWELVE YEARS BACK IN TERMS OF THE GOVERNMENT DIRECTIVE F NO.4/8/4/95-IR DATED 24.12.1997 TO AMEND REGULATION 22 (4) (b) AND TO GIVE EFFECT TO IT.
Another glaring anomaly is that in terms of regulation 3 of Pension Regulations, the last date of exercising an option was 26.01.1996. No one could be taken into the ambit of thePension Scheme unless regulation 3 was suitably amended. In other words the PensionFund Trusts of banks have no provision to pay pension to those taken into Pension Scheme through the Joint Note dated 27.04.2010 in terms of regulation 3.
IBA WAS ACTING ABSURDLY IN DISREGARDING THE GOVERNMENT DIRECTIVE F NO.4/8/4/95-IR TO AMEND THE REGULATION 22 (4) (b) DATED 24.12.1997 AND NOT EXTENDING OPTIONS TO GIVE EFFECT TO IT, NOT KNOWING THAT PENSION SCHEME WAS OF A SELF FINANCING NATURE AND PAYMENT OF PENSION WILL HAVE NO IMPACT ON THE PROFITS OF BANKS AS PENSION IS PAYABLE OUT OF PENSION FUNDS WHICH REPRESENT THE DEFERRED WAGES OF EMPLOYEES AND ARE BUILT UP OUT OF THE STATUTORY CONTRIBUTIONS WHICH BANKS WERE TO MAKE UNDER EPF AND MISCELLANEOUS PROVISIONS ACT, 1952 PREVIOUSLY.
It is pertinent here that after extending pension through the Joint Note, the PensionFunds of all banks had been abounding in resources during the next five years and are capable of meeting two to four times the present pension to all the pensioners. By way of an illustration, it can be presented that Union Bank had Pension Fund of Rs.7,732.57Crores as on 31.03.2015. The growth in five years till that date was Rs. 6,274.01 Crores.Unlawful contribution collected from employees and retired employees on the basis of Joint Note is Rs. 134.33 Crores. This, together with compound interest can be repaid in a sum ofRs.300.00 Crores to all. The amount had been earning compound interest to Pension Fund and the Fund /Bank does not suffer any loss in paying it back with interest to all. Even on paying the Rs.300.00 Crores, the growth in five years has a surplus of Rs. 6,274.01 Crores. This can contain payment of arrears till the date of 27.11.2009 to all the 3,106 to the tune ofRs.2.02 Crores per capita. The actual arrears payable per capita is only in the range ofRs.15.00 to Rs.30.00 lakhs. Since pension / arrears / interest is payable out of Pension Fund, profits of banks will not be affected. The pension payment for 2014-15 was only 23.25 percent of the annual growth. It shows the capacity to pay four times the present pension to all the pensioners numbering about 17,579.
The state of affairs in other Public Sector Banks is also similar. All of them can pay two to four times the present pension to all the pensioners without affecting their profits. PublicSector Banks including SBI group had Pension Fund balance of Rs.1,58,782.61 Crores as on 31.03.2014. The present balance is somewhere above Rs.2,00,000 Crores. In spite of everything, IBA was making banks deny the benefit unlawfully and detain the money of the employees with no benefit either to the banks or to the government, in a senseless way.
While IBA had been denying the statutorily vested benefit of pension to employees, banks were squandering money to the advantage of affluent big borrowers through interest concessions. To cite one example, Muthoot group of concerns availing Rs.10,000 Crores of loans from 42 banks under consortium arrangement was granted interest concession of 3 percent from the card rate of interest. This deprives banks Rs.300 Crores out of their profits which is going into its kitty. Banks were donating approximately Rs.1.00 Crore to it on each working day of the year. Such NBFCs lend the money taken from banks at 11 percent to the weak general public at 18 to 24 percent and beyond, levying huge charges also. The process, dwindles the business of banks, and defeats the very purpose of nationalisation. There are other activities also, financed at concessional rates. 1,000 such accounts will cause a drain of Rs.3,00,000 Crores to the banking system. Here is the need for a system of surveillance of rates by an authority.
The industry was undergoing total devastation through IBA. Mr. M V Nair, its formerChairman was reportedly engaging in “Nav Nirman” in Union Bank. He set up “StarUnion Dai-Ichi insurance and Union KBC Mutual Fund by diverting the deposits and other infrastructure of the bank, thus dwindling its business. All were lucrative and rewarding to the top management in several ways, at the cost of the Bank. He found out a solution to the unemployment in his family and close circles. These are not unpardonable. But deceiving the work force in the industry as a whole is invariably unpardonable. Under the stewardship of Mr. Nair, the employees and retired employees in the industry were duped beyond doubt and the Bank was getting debilitated.
These are not aimed at mudslinging anyone; but brought to your kind notice to des cribe the style of functioning of IBA. IBA and its members had been operating like a bedlam with no scruples for their common advantage at the cost of the banking system and its employees. At any rate, IBA has no justification in taking departure from statute and looting the retired bankers and bank employees on rolls. What is essential is a mere compliance of thePension Regulations, 1995 especially with regard to regulation 52 (1), 5(3) and 11, which involves payment of pension from the date of retirement to 27.11.2009 and the refund of the contribution raised from employees and retired employees since the Joint Note dated 27.04.2010 had no force of law and is void. Up-dation of pension in terms of regulation 56 is also another requirement for full and proper compliance. There is no need for any fresh sanction of any benefit. “State” not abiding by its own laws and regulations is definitely a catastrophe and pitfall of democracy.
It is very much pertinent to say that bank employees are quasi government employees with nationalisation and government ownership of banks. All policies of the government are implemented through them. As such, their salary bills are also to be foot by the government. But since salary bills in banks are appropriated against the profits the employees themselves make in banks, they themselves foot their pay bills giving zero cost to government. Yet they had, all along, been accorded a step motherly treatment. The bank officer had a pay of Rs.500/- while the government official in similar level had Rs.450/- only during the 1970s. Parity of pay was brought in through Pillai CommitteeRecommendations in 1979 in the pay levels in banks and government. Though parity of reasoning requires keeping bank pay at least at the level of government pay, it was lesser byRs.30,000/- to Rs.40,000/- a month prior to the implementation of 7th Pay Commission. The bank employees had all along been discriminated in utter disregard to the magnificentConstitution of India. You will magnanimously agree that this is quite unreasonable.
THROUGH IRRATIONALITIES IN THE JOINT NOTE AND IN THE IMPLEMENTATION OF THE PENSION REGULATIONS, IBA HAS PROVED BEYOND DOUBT THAT IT IS INCOMPETENT TO SIGN ANY WAGE PACT WITH BANK UNIONS AND THERE IS THE NEED FOR A PAYCOMMISSION FOR BANKS TO RENDER JUSTICE TO THE PEOPLE WHO HAVE ILLUMINATED THE VARIOUS SECTORS OF THE SOCIETY. IBAHAD BEEN PERPETRATING DISCRIMINATION AMONG THE BANKING COMMUNITY AS IT SIGNS SEPARATE AGREEMENT FOR NATIONALISED BANKS AND ALLOW STATE BANK OF INDIA TO HAVE HIGHER PAY PACK, THOUGH EMPLOYEES OF ALL BANKS CONSTITUTES SIMILAR MANNER OF PEOPLE. This will facilitate quick, cost effective and impartial wage revision. Adherence to the Pension Regulations by banks will help elimination of thousands of writ petitions in the matter across the various High Courts of India, which is a contribution of IBA and give relief to the Judiciary which can cater well to the need o f the community. Bringing bank employees within the jurisdiction of Central Administrative Tribunal is also appropriate as they are quasi-government employees, whose pension is managed by PFRDA from 01.04.2010. This can also reduce the burden of the Judiciary across the nation, that are saddled with piles of petitions.
The bank retirees / bank employees who are made ‘dalits’ among the working class cannot be wrong if they perceive that the British who plundered India in the pre-independence days are now incarnate in the banking lords now and they need an evolution into lawful citizens lest our independence shall become mere illusion. I earnestly request that IBA may be advised to desist from tormenting the image of the government and the heritage of the nation and to undo all wrongs committed through the Joint Note, thus making public sector banks compliant with Pension Regulations in force.
C N VENUGOPALAN
(This is a letter addressed to the Prime Minister of India)
(This is a letter addressed to the Prime Minister of India)