Letters to Editor - April 2012

Place : Udupi       

                                               Date  : 05/04/2012

To

The Central Public Information Officer

Dept. of Financial Services

Ministry of Finance, Govt. Of India                   Regd AD

Jeevan Deep Building

10 Parliament Street,              

NEW DELHI - 110 001.

Dear Sir,

 Sub : Requisition of Information Under RTI Act 2005

 Ref : Payment of Pension to Bank Employees.

I am interested to have the following information under RTI Act

2005.

I. From the letter DD No. 14/1/1/2007-IR dated 10/08/2010 addressed to Sri O P Bhat, Chairman, Indian Banks Association by Sri Alok Nigam, Joint Secretary, Department of Financial Services, Ministry of Finance, Govt. of India show that sanction of Govt. is accorded to implement the terms of settlement/Joint note dated 27/04/2010 for grant of another option to the retirees and payment of pension to such retirees w.e.f. 27th November 2009, having regard to the letter No. HR & IR/MV/G2/Govt/220 dated 29/04/2010 of IBA.  I request you to furnish me a copy of said letter No. HR & IR/MV/G2/Govt/220 dated 29/04/2010 of IBA     

addressed to Govt.

2.  Letter DD No. 14/1/1/2007-IR dated 10/08/2010 cited above show that sanction is accorded to Indian Banks Association instead of according such sanction directly to Nationalised banks to implement the terms of settlement/Joint Note.  However in reply to my appeal under RTI Act 005, Department of Financial Services Vide its letter No. 15/106/2010-IR ated 05/01/2011 informed me that IBA under-takes negotiations on behalf of banks and not on behalf of the Govt. But your letter dated 10/08/2010 implies that IBA is the agent of Govt. or intermediary between Govt. and nationalised banks.  If it is not so, Govt. would have communicated sanction to Banks directly.  Please inform me under which provisions of Banking companies (Acquisition and Transfer of undertakings) Act 1970/1980 or any other law for the time being in force, Indian Banks Association has been appointed as Managing Agent of Govt. of India or as an intermediary between Govt. of India and nationalised banks.  Please furnish, a copy of agreement entered into between Govt. of India and Indian Banks Association enabling IBA to act as an intermediary/agent.

3.  Copy of joint note dated 29/04/2010 is already in the “record Of Department of Financial Services, Ministry of Finance.  I am now sending enclosed a copy of Cir/HR & IR/G2/665/90/2010-11-999 dated 10/08/2010 addressed by Indian Banks Association to Chief executives of member banks.  The aforesaid letter dated 10/08/2010 of IBA in the 2nd, 3rd and 4th line of Para No. 13 states that [1]Quote[1] "in the case of officer employees those who ceased to be in service on account of retirement on “superannuation,” death or on account of VRS under special scheme prior to 27th April 2010 but after 29th September 1995 from Nationalised banks are eligible to opt for joining the pension scheme as retired employees" [1]unquote[1].  The word "Superannuation" is not found anywhere in the letter DD No. 14/1/1/2007-IR dated 10/08/2010 of Financial Services Dept. Govt. of India or in the Joint Note.  Please furnish me a copy of any other letter of department of Financial Services, Ministry of Finance on the basis of which the word “Superannuation" has been inserted by IBA in para No. 13 of their Circular quoted above. 

4.  If the word "Superannuation" was incorporated by IBA in the letter dated 10/08/2010 addressed to Banks on their own please inform me whether IBA has been directed atleast subsequently to issue any corrigendum.

5.  Letter DO No. 14/1/1/2007 IR dated 10/08/2010 of Department of Financial Services also accorded sanction to IBA permitting payment OF  pension to retirees from among new optees w.e.f. 27/11/2009 pending necessary amendments in the Bank (Employees) Pension Regulations 1995.  Any joint Note, which at best is an inchoate agreement, a mere proposal, would attain legal sanctity only on necessary amendments to Pension Regulations which is a subordinate legislation, are carried out.  Merely because the Govt. had taken a decision to amend a statute does not mean that existing statute stand automatically changed.  The existing pension regulations authorise payment of pension, only to those who are members of pension Trust Fund of respective Banks.  New group can be admitted to the Pension Fund only after a provision is made in the Pension regulations by Gazzatte Notifications. However Parliament has every right to authorise Govt. to take such extra ordinary step depending on the exigencies.  Please furnish me a copy of such authorisation given by Indian Parliament to Govt. of India.

In payment of the fees towards furnishing the above information I am enclosing a postal order No.   for Rs. 10/- payable at New Delhi

Thanking you,

Yours faithfully,

(Shri A. Premanand Pai)

S/o A Panduranga Pai

"ANJANA" Ist Cross

5th Main Road

V.P.Nagar

Udupi - 576 102

Karnataka.

Mobile No. 94490 49041.

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From                                                                                                                   Date: 15/04/2012

J.S.K. Parabrahmam

11-13-229/103, Sree Lakshmi Apartments

Plot No. 154, Road No. 5

Alakapuri Park

Hyderabad – 500035

To

The Chairman

All Banking Solution.com

Sir,

                        Sub: Internal problems of the Nationalised Commercial Banks – reg

            I find space is not sufficient in the Bank branches for the employees to sit comfortably.  If additional staff is posted there is no room for them to sit, because the bank branches are always situated in rented buildings without good ventilation, no parking place, no dining room, toilets of worst conditions, some time water coming and some times water not coming.  The bank branches are not fully air conditioned even though they are using computers.  Computers require fully air conditioned accommodation.  All the Heads of the Accounts are not onlined.  Because of this, they are making entries as just MTs, which are not seen by the corresponding branches and credited into accounts.  Example is my vehicle loan account.  Because Vehicle Loan accounts are not on-lined installments have been sent as MTs to respective branches where loan is taken, they have not taken into account all the installments, some are missing.  The Cash allowance of Rs. 1000/- per month to the Cashiers is merely useless, because it will not cover the risks taken by the Cashiers to any extent.  Fake not menace has increased abnormally in these days, variation in denomination of a section can not be found by the counting machines.  The counting machines are third grade which are giving wrong numbers and thereby the Cashiers are loosing money.  There are other types  of defective notes found in sections like number less notes, burnt notes, oiled notes, soiled notes, washed notes which can not be found immediately in the presence of the customers to return the notes to the customers on the spot.  The sorting machines can not be readily operated on the counter.  Sorting is done in the back counter seats by Attendars some time later.  Then the customers are refusing to reimburse the notes, questioning the proof that they have come in their cash only.  So the cash counters should be increased in all the branches to relieve the cashiers of some tensions.  All the quarrels are in cash counters only, because of big lines in the cash counters.  Latest type cash counting machines, denomination variation catching machines should be supplied.  Fake notes also can not be detected by the sorting machines immediately they can be detected by manual verification.  So latest type of sorting machines should be supplied.  To accommodate these sorting machines big cash cabins should be made.  All the Heads of Accounts should be on-lined.    

            Separate counting machines for the customers should be given.  The conditions in Syndicate bank are still worse among nationalized banks.  I request the Unions to fight for all these problems and get solved.  Staff is very less in banks.  More staff should be recruited.  Clerical cadre should be increased.  There should be separate entry cadre and separate Supervisory cadre to avoid frauds.  Signature verification should be done be two or three people to eliminate frauds.

            Thanking you.

Yours faithfully

J.S.K. PARABRAHMAM

Continued:

            Sir,

            I am explaining some other problems which I have not discussed in my previous letter. 

They are;

1.                  Too many duties clubbed to the Pass book Printer counter; they are- Pass book printing, Statement printing, telephone calls attending, account view showing, information regarding clearing, balance enquiry, RTGS information and NEFT information, like that like that so on..  Every minute one phone call will come, keeping it pending we can not satisfy the customer who is standing in the counter.  For programme changing in computer at least 5 – 10 minutes are required, meanwhile how long the telephone caller will wait?.  How can it be compatible?  For enquiry counters also so much que is standing.  Computer will take at least 5 minutes to go into the required programme.  All these are highly impossible tasks.  The phone calls should be divided among the departments.  For example, Clearing questions should directly go to the Clearing departments, questions related to Term deposits should go directly to the Deposit Counters.  Pass book printing counter, statement printing counter should be divided as the  single man can not operate the two nodes at a stretch with the same password.  Like this the Help Counter is also over burdened with so many enquiry matters.

2.                  All the Bank branches should be connected to Head office by FAX machines.  If attenders are sent to give fax outside he will spend entire day claiming huge conveyance expenses, similarly Xerox machines should be introduced for big branches.  Attendars are not going out for any outside work, only clerks are going, if attenders go they will roam outside for personal works and spend the time claiming huge conveyance expenses. 

3.                  No paper transportation of any data from branch to branch or head office.  For example, earning records of staff taking much delay for giving to the other branch, where the staff has been transferred.  So all the Heads should be onlined.

 Thanking you.

Yours faithfully

J.S.K. PARABRAHMAM

24/04/2012

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APPROXIMATE TRANSLATION OF LETTER APPEARED IN JANAYUGAM

                              MALAYALAM DAILY ON 28 03 2012.

Recently in the media there was a news item in which the Karnataka High Court had decided in the matter of a review petition filed by the State Bank of Mysore. The bank’s action in filing the petition has been deprecated by the Court as one of ‘wasting the court’s precious time and bank’s money’.Passing strictures on the Bank the Court has ordered payment of costs amounting to Rs.10000/ each, to the 179 petitioners of the Bank.

The details of the case are briefly explained below: As per the Pension regulations of the banks, those who serve the Banks for 20 years or more, shall be eligible for an addition of 5 years to their service while arriving at the amount of pension payable. But the Bank issued a circular in the year 2000, as per which one section of the retirees was exempted from getting the benefit.  The retirees approached the Bank several times to get the mistake rectified. But the Bank was not responding positively and the pensioners were forced to approach the High Court.  The decision of the Court went against the Bank and the Bank went on an appeal, which also failed. The Bank had an opportunity to correct them, when the Supreme Court in a landmark Judgment in 2010 disposed a similar matter in favor of the Bank retirees. The Bank should have re-fixed the pension of the retirees, adding 5 year weight-age and disbursed arrears of pension and commutation, as per the judgment. But the Bank did not care to implement the Supreme Court judgment. The pensioners had no other go than approaching the High Court in 2011, seeking direction to the Bank to implement the Supreme Court’s decision. Single bench of the High Court ordered payment of arrears, after re-fixing the pension as per the Supreme Court order, within 8 weeks or pay interest at 10% till the date of payment. The Bank again went for appeal in the Division Bench. Pension regulations have statutory validity and against then an office order has no value. This is known even to a layman. Still the Bank officials, who revel in the misery of others, targeted a group of pensioners, as a result of which heavy expenditure has been incurred towards legal fees, etc., even after the case has failed on several occasions and at various levels. This is the height of sadism!

Some important points, not directly connected with the case:  If a loan granted under general category becomes sticky the bank takes action against the person, who sanctioned the loan and also against those who are responsible for the recovery of the loan and also against other employees (who are not connected with the loan in any way).Such a cruel-minded Bank issues a circular which has no legal sanctity and to justify the circular, they spend huge amounts by way of legal expenditure! Is the Bank ready to take action against those employees who advised the Bank to file appeals after appeals?  Is it not the tax payers’ money that is being paid as costs to the 179 petitioners of the Bank? The Advocates’ fees are also to be charged to the ex-chequer. Who is going to bear the burden of 10% interest payable on the arrears till payment and other wasteful expenditure? It is appalling to note that the public money is at the hands of such people, who do not even know that the circulars cannot be issued in contravention violating the statutory provisions of the Pension regulations.

                                                By: Shri. K T Rajagopalan.

                            (Translated by G.Ramachandran, SVRS, Canara Bank)

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Dear Friends,

Next Salary Revision of Bank Employees due from 01-11-2012 may now be the subject matter of UFBO & IBA. In last 3 wage revisions DA of 134,151 & 137 Slabs at CPI of 1684, 2288 & 2836 was merged and increase of 12.25%, 13.25% & 17.5% respectively was given to arrive at revised pay scales. In wage revisions the Increased Pension Cost was shown at 26.5%, 28.5% and 36% respectively. Considering 10% as statutory liability of banks, balance increased pension cost was shared between employees and bank. Resultantly the share of employees being at 6.75%, 9.25% and 13% was set- off from the salary increase of the employees.  The CPI at present is giving DA of 420 Slabs (Average Annual Increase of 91.25 Slabs in last four years) and by March-2013 the DA slabs may be around 500 with CPI at 4836 that may be the basis for Valuation of Pension Liability in this wage revision. In last wage revision the valuation was done for March-2008, data.

One can very easily imagine the magnitude of Increased Cost of Pension in the next wage revision, when DA merger will be of at least 466 slabs as compared to 137 Slabs in last wage revision which showed the increased cost of pension by 36%. Will it be above 50% this time?

The employees appointed from 01-04-2010, are not covered by Pension Regulation 1995 as they are under New Pension scheme. So they should not be the party for set off from the increase agreed, for meeting the increased cost of Pension. Many a Petitions filed by CPF optees are pending in courts for such set-off  done in last salary revisions. How will it be made workable?

Valuation of Pension Liability -

During the year 2010-2011, the Public Sector Banks implemented the second pension option as per 9^th Bipartite Settlement and therefore, as on 31-03-2011, the pension liabilities of all these banks increased substantially. As per audited Balance sheets of these 24 PS Banks, the increase in liability was by an amount of Rs.28821.13 crores. The Reserve Bank of India had vide circular No.DBOD.BP.BC.80/21.04.018/2010-11 dated 09-02-2011, permitted all these Banks for amortization of such increased liability in five years. Thus Banks have during 2010-11 booked Rs.8326.59 crores in their P/L accounts and kept balance amount of increased liability to be amortized in next four year. This balance of liability is Rs.20494.54 crores. Here it is worth noting that Net Profits of these 24 PS banks were Rs.34985.98 crores for the year ended 31-03-2011. Had the full liability been accounted for in P/L account, the profits would have been reduced by this amount, which is kept pending for amortization. The details are in annexure –I below.

Total employees in these Banks were approx. 525000 as on 31-03-2010, and this is the figure which now onwards will reduce on account of retirements and there will be no entry of employees under the Pension Scheme 1995 as all new appointees from 1-4-2010 will be under New Pension scheme (Contributory @ 10% of BP and DA per Month by employee and equal by Bank).

Important –

1.       The next Salary Revision due from 1-11-2012 may be with merger of DA of around 466 DA Slabs at CPI of 4700. DA  at 69.9% merged and  increase in wages if taken at 18% (Almost similar to that in 2007 Revision – it was 17.5%) and assuming that the wage revision will be given effect in year 2015,(As had been the trends) the pension liabilities  of 24 P.S. Banks, over  next  four  the years are estimated to be as under-

Note - For the year 2015, while calculating the liabilities, the DA Slabs are taken at 194, after merger of 466 Slabs in wage revision with 18% increase in wages, and accordingly revised DA rate taken at 0.085% per slab.

2.       In  the light of  above these 24 Banks are to bear the load of pension costs in next four years as under-

a)       Un-amortized amount of 2011 – (Annexure – I below)                        Rs.20494.54 crores.

b)       Increase of Pension Loads for years 2012 to 2014 -                             Rs.32685.47 crores

c)       Increase of Pension Load in March 2015 after Pay  Revision -           Rs.24295.23 Crores

d)       Thus these 24 PS Banks are to bear the Pension Load – Total-           RS.77475.24 crores by March -2015.

e)       Besides above the banks will have to pay the arrears of Salary Increase for the period from 1-11-2012 to March -2015 also.

3.       In above situations the Next Wage Revision coupled with Pension Updating is going to be a difficult task for UFBU, as the profit of these 24  Banks were Rs.34985.98 crores for year 2011 and may be around Rs.160000 crores  for next four years. This will be the main argument of Banks, IBA and GOI against any such further increase of liability on these Banks. Thus employees’ associations will have to be ready with ample home –work, while discussing and negotiating with IBA. The costs incurred or possible revenues that are not coming to Banks for discharging socio-economic responsibilities such as - Pension Payments through Banks, Funds blocked in Debt Reliefs, Lower Interest Rates on some sectors, financial inclusions etc. do have the bearing on profits of the Banks. Thus net profit should not be the only criteria for salary increase or Pension updating. The role of the P.S. Sector Banks in building the economy of the country, and comparable salary structures with central government employees must form the basis for Pay Revisions.

ANNEXURE-I

Note - Figures are from Audited Balance sheets of Banks as of 31-3-3011, excluding SBM. Its Audit Report for 2011 is not on its site therefore figures of SBM are taken in line with SBT.

S.K.MISHRA – BHOPAL -   29-03-2012

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                                              Place : Udupi       

                                              Date  : 27/03/2012

To

The Central Public Information Officer(RTI Act)

Reserve Bank of India

DBOD, Central Office,                               Regd AD

Central Office Building

Shahid Bhagat Singh Marg           

Mumbai - 400 001.

Dear Sir,

 Sub : Statutory Consultation with Reserve Bank of India to make

       (or amend) Pension Regulations for employees of     

       Nationalised Banks.

I wish to have the following information under the provisions of section 6 of RTI Act 2005.

I. Please furnish me the names of nationalised banks which have not yet completed the process of Consultation under section 19 of Banking companies (Acquisition & Transfer of undertaking) Act 1970/1980 for amending the Bank (Employees) Pension Regulations 1995 to give effect to the proposal of Banks/Govt. for giving one more option for pension to all officers working on the Rolls of Banks as on 29/09/1995.

II.  Please furnish me information such as writ Petition reference Numbers in which RBI is impleaded as a party, names of High Courts in which said writ petitions are filed specifically challenging the action of Nationalised Banks/Govt. of India combine in disbursing pension from 01/01/2011 to new set of Bank officers without accomplishment of consultation process with Reserve Bank of India as mandatorily required by the provisions of section 19 (1) (2) (f) read with section 12 of Banking Companies (Acquisition and Transfer of undertaking) Act 1970/1980.

III.  Please furnish me the copies of clearance given by RBI to nationalsied banks who have accomplished the mandatory provisions of consultation process interms of section 19 read with section 12 of Banking companies (Acquisition & Transfer of undertakings) Act 1970/1980 for giving one more option for pension to all Bank officers who were in service as on 29/09/1995. 

1V.  Please furnish me with a copy of the draft amendments to pension regulations furnished to you by any one of the nationalised banks during the process of consultation under the provisions of section 19 of above Act 1970/1980.

IV.  The above information may be forwarded to me by registered Post to my address given below.  I agree to pay the required fee.  An Indian postal order bearing number 92E 025094 for Rs. 10/- is enclosed.

Thanking you,

Yours faithfully,

(Shri A. Premanand Pai)

S/o A Panduranga Pai

"ANJANA" Ist Cross

5th Main Road

V.P.Nagar

Udupi - 576 102

Karnataka.

Mobile No. 94490 49041.