Appointment of Committee to look into the Bank Pensioners issues by the Parliament Committee on Public Grievance Personnel & Pension, Law&Justice
Comments by AllBankingSolutions.com :
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RE- ILLEGAL ARBITRARY DENIAL OF
1. 100%DA NEUTRALIZATION TO SENIOR CITIZENS WHO RETIRED FROM THE BANKS SERVICE PRIOR TO NOVEMBER 2002.
2. DENIAL 0F 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 24th Feb,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:
01. The Section 10(7) of Banking Companies (Acquisition and Transfer of Undertakings Act, 1970) says:
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.
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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.
Provisions for bad and doubtful debts, depreciation on assets, staff cost with superannuation benefits and other provisions under law, are not subordinate to each other but they are all at par with each other. Now, what has been practicing is provisions for debts, depreciation and other provisions are provided even if there is impact on reserves and capitals of the banks. However, the staff cost with superannuation benefits, which is also at par with other provisions referred above, is neglected by the men in top of the affairs of the banks. The Parliament of the country and country, while taking over the banks by nationalizing them, protected interests of the bank employees by passing legislation as above. 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 Nationalization of Bank on 19.07.1969.
The position of performance of Public Sector Banks as under for the last 3 years.
( as per IBA site) Rs. in crores.
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.
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.
However the IBA represented by serving CMD of a bank as Chairman of IBA and Retired executive of the Bank Mr. Thankasale and executive of IBA Mr. Unnikrishnan without banking experience, are keeping mum on this issue and conversely making loud noise on wage revision to the bank officers and workmen. Incidentally and interestingly, our UFBU old and tired horses, are also keeping mum on this serious issue, in which low level staff are not involved in this huge NPAs, for their own compelling reasons.
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.
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:
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Originally, a provision is made in the settlement dated 29.10.1993 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.
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