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Urgent Need for Implementation of National Litigation Policy in Banks

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Rajesh Goyal 




We have been publishing a large number of articles, letters and views received by us from bankers who are living across India and sometimes even abroad.   I myself being an ex-banker with over 30  years  of service have sometimes been writing on this website on various issues which concerns bankers through out the industry.    The developments which have taken place in last decade or so have been so disturbing for the bankers that one feels like crying at the top of one's vocal cords.   The worst part is that on most of the issues bankers feel helpless as they are sandwiched between top bosses (i.e. top management) who are ready to do everything to please their political bosses, and the union leaders, who have lost all concerns for the common bankers.   Each one of them merely watches his own interest.  


One of the recent disturbing developments in banks have been the inhuman attitude of the HR divisions of the banks.   They get great pleasure in distorting the rules / regulations in such a way so that bankers are  denied even their basic rights.    In case, some brave hearted banker decides to fight against the wrongs, the whole HR team will gang up and throw full weight to ensure that he is transferred to the remotest place possible and is given either a dummy posting or where he can be soon framed in a case.  If ever somebody decides to go to Court, then best lawyers are hired to fight the case till Supreme Court so that all financial resources of the challanger can be drained and he is left high and dry.   


In this article, I am trying to highlight the need for a review of the cases where the litigants are bank vs banker / ex-banker.   Most of such issues relate to HR issues, including pension and service conditions.  A majority of them are continuing for years only because some of the top bosses have ego problems and they want to Teach A Lesson to poor banker who has decided to fight for right cause.


Most of the bankers are not aware that GoI has a "National Litigation Policy", which is to be followed by all PSU banks too.  It has been passed in June 2010.  I am sure more than 90% of GMs, EDs and CMDs must have never heard about this Policy or read the same.    In April 2011, a new items had appeared saying "The National Litigation Policy (NLP) aimed at reducing the cases pending in various courts in India is nine months old, but the Reserve Bank of India (RBI) which is supposed to implement the procitizen policy in the banking sector is unaware of it.   The Department of Banking Operations and Development in the RBI’s central office in Mumbai has told a Right to Information (RTI) activist that it does not have any information on how the RBI is implementing the NLP".    In a more recent case, one of the RTI activist asked Bank of Baroda the following query in this regard :-


1.      Date of receipt of  NATIONAL LITIGATION POLICY. 2.      Steps taken by the Bank for Compliance of Policy. 3.      Feedback given to Government  regarding the policy. 4.      Latest Copy of the feedback report given to the Govt. on the policy.


The Information Officer of the Bank in his reply stated as under:   The bank has not received any communication on the National Litigation  Policy so far.. Hence no comments for point No.2,3,4 raised.


This shows the level of awareness about National Litigation Policy in the banking sector.   I am sure in case, a similar query is sent under RTI to other banks and information is desired that when and what steps have been initiated by the Board of the Bank to implement the Central Government guidelines, almost all PSU banks will be blank.  


Now let us see what National Litigation Policy is all about, and how it is relevant for banks and bankers in particular.


The National Litigation Policy is based on the recognition that Government and its various agencies are the pre-dominant litigants in courts and Tribunals in the country. Its aim is to transform Government into an Efficient and Responsible litigant.   RESPONSIBLE LITIGANT” MEANS

 That litigation will not be resorted to for the sake of litigating.

 That false pleas and technical points will not be taken and shall be discouraged.

It further says "Government must cease to be a compulsive litigant. The philosophy that matters should be left to the courts for ultimate decision has to be discarded. The easy approach, “Let the court decide,” must be eschewed and condemned".   "The success of this policy will depend on its strict implementation. Nodal Officers will be appointed by Heads of Department"..


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Now question arises whether any Bank has placed this policy to Board and framed its own guidelines to be followed.    The biggest legal battle of bankers at present is going with IBA.  The best part is that IBA which is an association of banks with majority of them being PSUs and covered by RTI, openly advocates that it is a private association and thus is neither bound by RTI nor necessarily follow government guidelines.   Thus, IBA will seek impunity even from National Litigation Policy on this pretext.   I wonder whether an organization created by organizations which are under government can say that it is a separate legal entity and thus need not follow government guidelines?    Thus, in nut shell we can say that almost all banks have flouted the central government policy and have not cared to take any action under this.  


Thus, now is the time when each and every PS Bank must put in place a Litigation Policy in line with national policy with suitable checks so that any  HR officials and law officers do not file / fight cases on flimsy grounds and put the present employees or ex-employees to unnecessary hardships.   A serious attempt must be made in each case to resolve the issue across the table by hearing the grievances of the employees at an open forum where bank's top bosses can express their views and take on the spot decisions with the help of law officers.   To put pressure on the banks, there is a need that affected bankers should seek information on the implementation status of this policy from each bank, and send us the replies for uploading the same and giving the same wider publicity.   It is only such exposures that banks will be under pressure to implement this policy and reduce the court cases. has decided to take up this issue as no other forum till date has taken any initiative.    We would have been happy had this initiative been taken by Union Leaders at national level and convinced IBA to withdraw cases and agree to the demand of bankers who have been denied 2nd pension option.   But bankers are well aware that union leaders are only puppets in the hands of management and IBA.   I have not come across even a single statement wherein these union leaders have spoken on this issue.   I am sure most of them are not aware that such a policy actually exists.     They have no time to read policies which can be beneficial to a common banker.    Bankers have to fight on their own.   We, at pledge that we will continue to support them in this effort.



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