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IBA - Association Without Any Accountability & Responsibility  




S, Ramachandran 

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We produce below the letter sent by Mr S Ramachandran to Honourable FM, Mr Arun Jaitley (with copies sent to PM, Law Minister, RBI Governor) a few days back


S.  Ramachandran                                                                                               Kunal Icon, Building no. A8,                               

Former General Manager Bank of Baroda.                                                   Flat no. 104, Pimple Saudagar,  

Former Chairman  & CEO - The Sangli Bank Ltd.                                     Aundh Camp, Pune 411027

(Now merged with ICICI Bank Ltd.)                                                                Tel: 020 27201012.

Former Administrator Madhavpura Mercantile                                            E-mail id-                              

Co-op Bank Ltd (Ahmedabad)                                                                 

Former Director General Maratha Chamber of Commerce            

Industries & Agriculture, Pune.

                                                                                                BY SPEED POST                                   



Shri. Arun Jaitley,                                                                                                 Date:3rdSept,2015

Hon’ble Finance Minister, Government of India,

North Block, Raisina Hills,

New Delhi.11001                                                                     



Re: Unheard of an Authority without Accountability and Responsibility in a country wedded to Rule of Law – Indian Banks’ Association. 

 With reference to the above I write to your hon’ble self with much concern on the status of Indian Banks’ Association as under:-

 01.    This India Banks’ Association ( IBA ), is a voluntary association of banks management in the country consisting of 201 members comprising of Public Sector Banks, Private Sector Banks,  Foreign Banks having offices in India and Urban Co-operative banks. IBA is not a legal entity, as it is registered neither under Trade Union Act, 1926 nor under Registration of Societies Act, 1860.and further it is not a professional nor statutory body.

  In spite of the above it has been collecting huge monies from its member banks as membership fees, expenses, donations etc, in crores of rupees and spending the collected monies without under any provisions of the law. It is not a statutory body and is not under any control of law and is coming under any of provisions of law.  And also not defined as employer under  Industrial Dispute ACT 1947.

 02. Recently,  this unregistered body IBA has issued a circular No HR&IR/76/H7/E9/755 dated 11.05.2015 on the matter of Encashment of Leave on Compulsory Retirement. It says that some of the affected officers have got relief from the courts and Government of India, Department of Personnel & Training vide O M No. 14028/1/2004-Estt(L) dated 13.01.2006 had also decided that in such cases where the Government servants are compulsorily retired as a measure of punishment and in whose case, if a cut in pension (including gratuity) has been ordered, the benefit of encashment of earned leave at the time of such retirement shall be allowed. This matter has been taken up by IBA in its HR committee meeting held on 06.04.2015 and decided to allow encashment leave from 30.04.2015, as the managing committee of IBA decided to allow such encashment. IBA is not statutory body, its HR committee or Managing Committee have no force of law, as they are not the committees of statutory body. They cannot amend the Regulation Officer Employees ( Discipline and Appeal ) regulations 1976/1982 of PSU banks. Further the effective date can be that of   13.01.2006 of DOPT and not that of managing committees meeting date. IBA has opened its eyes after 9 years, it does not mean if IBA does not take action on this, the position of law change.

 03. A settlement was reached on 27.04.2010, in which second option was given to the bank employees to join the existing scheme of pension. Lacs of employees joined the scheme thereafter. Now crores of rupees as pension is being paid to the pensioners who joined the scheme after 27.04.2010. But none of the Public Sector Banks have taken steps to amend the existing Pension Regulations 1995 and they are all waiting for unregistered body IBA’s instructions in this regard.  In the meantime,  unregistered body issued unilateral interpretation of bilateral settlement dated 27.04.2010, stating that the Voluntarily Retired,   Compulsorily retired and resignee employees are not eligible  to exercise option for pension as  per settlement dated 27.04.2010. However, the Government of India through Department of Financial Services gave instructions that Voluntarily retired employees are eligible, which has been implemented and the compulsorily retired and resignee employees have got relief from Apex Court. However, the banks have not implemented the decisions of Apex Court in a similarly placed employees cases, as they are waiting for IBA’s instructions.

Though Apex court has given an order that compulsory retired employees are also eligible for pension, similarly the compulsorily retired officers made representation to Bank of Baroda, a State Agency, for pension to which Bank of Baroda replied vide its letter No. HO:HR:OPS:PEN:107/4610 dated 06.05.2015, which was received by the concerned  officer on 25.05.2015, in which bank has replied as “ There are no specific guidelines from Govt./Indian Banks’ Association for inclusion of employees who have been compulsorily retired from Bank’s service”.  In view of the above, we regret our inability to consider your request for extending another option to join the Pension fund till such time Bank is in receipt of specific instructions from the Statutory Authorities.”  The claimant is similarly placed compulsorily retired officer. The state agency bank is waiting for specific guidelines on the matter of Order of the Apex Court, is a sorry state of affairs of Public Sector banks.


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04. The Government and its agencies are major litigants in courts throughout the country. There  is enormous, work pressure on the courts on account of this, and to overcome this work pressure the Government of India, has formulated a policy called National Litigation Policy and given guidelines to Government and its Agencies to avoid litigation .Para 2 of status note of NATIONAL LITIGATION POLICY submitted to the cabinet by Law Ministry state that “it is pointed out that indifference of the government compel people to come to the court in search of relief and does the government enjoys the dubious distinction of the largest litigant in the court involving on the big drought on poor exchequer” IBA also cunningly making public sector banks, which are state, to indulge in unnecessary litigation by giving illegal advice.  and, the Public sector Banks are not taking any steps in this regard and blindly following the illegal dictums of unregistered body IBA, resulting in increasing in litigation in various courts, as narrated in the paragraph 3 above. This is against Rule of Law and against Public Interest.

 05. This unregistered body IBA has been collecting huge funds from its member banks towards various purposes and the under mentioned table shows the amount of collections made by IBA from 3 government banks.

                                                                                                      Amount in Rs.


State Bank of India

Bank of Baroda

Canara Bank


        N A

          N A




          N A




          N A





























         N A

In May 2015


            N A

         N A

It is interesting that the State Bank of India, has paid a huge sum of Rs. 4,37,15,000.00 on 24.02.2011 to this unregistered IBA towards National Level Awareness. From the above table, that the 3 member banks of unregistered IBA have paid crores of rupees to unregistered body IBA and this unregistered body IBA has 201 members, the contributions from all member banks runs to hundreds of crores of rupees. The legality of collection of money from member banks of unregistered body IBA and legality of payment of money by the above members and other member banks of unregistered IBA to unregistered IBA  is against the Rule of Law. The contributions are from the profits of the member banks are public profits and capital is given to the above banks from the taxes paid by the citizens of the country in case of PSU banks. Without, proper procedure as per law, authority of law, public money cannot be paid by the State instruments and cannot be spent by unregistered IBA and is against Rule of Law and Public Interest.   Being unregistered body, collecting public money grant from
State instruments and other banks who are all governed by Banking Regulations Act, 1949, aroused out of income derived from general Public of the country, and spending the same without any authority of law and not accountable to any Public Authorities, by way of submitting its accounts, has to be checked and controlled by an independent and competent authority, in the interest of Rule of Law and Public Interest.

 06. The unregistered body IBA has been interpreting the subordinate legislations applicable to public sector banks and its interpretations which have no force of law, have been imposed on public sector banks. These public sector banks, without applying their minds, blindly implement the interpretations of the IBA on subordinate legislations.

 07.  The unregistered body IBA periodically instructing the above banks and other member banks about Banking encroaching into the domain/functions of Central Bank of country, Reserve Banking Of India such as

 i). Calculation of Drawing Power in consortium accounts including CDR/bilaterally restructured accounts, vide its circular No. C&I/Circular /2014-15/689 dated 29.09.2014,

ii). Pado Pardesh Scheme of interest subsidy for minority community students submission of claims vide its circular No. SB/CIR/10-21-PPS/1149 dated 08.01.2015,

iii). Simplifying the Demat Account opening  Process vide its circular No. C&I/Circular/2014-15/1413 dated 27th February, 2015. 

iv). Central Repository of Information on Large Credits (CRILC) Framework for Revitalising Distressed Assets in the Economy vide its circular No. C&I/Cir/2015-16/1611 dated 10th April, 2015. 

v).  Scheme for Extending Financial Assistance to Sugar Undertaking, 2014 ( SEFASU, 2014)


 Government of India and Reserve Bank of India, cannot allow this unregistered body IBA to encroach into the functions of Reserve Bank of India.


 8. This unregistered body IBA, is also not working in the interest of the PS BANKS , which is evident from the following :

It may be noted that the second pension option was turned down by earlier CEO MR SINOR OF IBA on 1-12-2007 as he said that as per actuaries estimates the cost would work out to Rs 26,000 crores ,but no sooner he retired and Mr K.Ramakrishnan took charge as CEO OF IBA he brought one actuary identified by IBA and one actuary identified by employees organization and gave them the work of calculating the cost of second pension option. THE IBA ,THE UNIONS managed with the actuaries and brought down the cost of 2nd pension option for working and retired officers at just RS 6,380.50 Crs.( AS AGAINST earlier estimate of RS 26000/-crores  though the number of pensioners have gone up) as mentioned in the joint note dated submitted to the government.

 However the final figure touched the figure of RS 24381/-CRORES on implementation, which is very close to the figure estimated by earlier actuaries and which has gone up by 382% which is unheard in any wage/pension settlement.

 FROM the above it is evident that this  manipulation was done as all the top officials from PU banks who were holding high position in IBA management committee  an such as Mr M.D MALLYA,CMD, BOB  AND CHAIRMAN OF IBA, MR K.RAMAKRISHANAN CEO ,IBA AND MR ALOK KUMAR MISHRA  CMD OF BANK OF INDIA AND VICE CHAIRMAN OF IBA were interested in getting 2nd pension option .AND no sooner the 2nd pension option was granted the above officials have opted for 2nd option of pension .  THIS CAN BE VERIFIED FROM THE BANKS RECORDS. MR Mallya has been sanctioned 2nd pension option by CORPORATION BANK, where he was working as GM AND MR K.RAMAKRISHNAN AND MR ALOK KUMAR MISHRA WERE SANCTIONED 2ND PENSION OPTION BY BANK OF INDIA,( THE ABOVE INFORMATION IS OBTAINED BY ME UNDER RTI ACT FROM THOSE BANKS) FROM the above it is evident that these officials took undue financial  advantage for themselves using their official position as CMD OF PUBLIC SECTOR  BANKS AND POSITION IN IBA TOTALLY IGNORING THE INTEREST OF GOVT AND THE BANK WHICH THEY WERE SERVING.

 Not only that when they noticed that the cost of this 2nd pension option is going to put some of the banks in losses the IBA approached the RBI TO AMORTIZE THE EXPENSES OVER A PERIOD OF FIVE YEARS WHICH RBI OBLIGED    In view of the above factual position you will agree with me that IBA THE UNREGISTERED BODY CANNOT BE TRUSTED FOR ANY ADVICE AS IT IS NOT A PROFESSIONAL OR STATUTORY BODY.


09. Today I happened to read in economic times that government is consulting this IBA FOR INCENTIVISING THE public sector banks executives ,who in turn are going to consult their members i.e public sector banks and then to give report. I had earlier mentioned that IBA is not  PROFESSIONAL OR STATUTOTY BODY which is evident from the above report .I therefore request you to desist the government from consulting IBA for any matters.  


10. IBA wants to take group insurance policy in its name on behalf of members of insured. The insured have not authorized their respective banks to delegate powers to IBA to take policy in its name. This is totally highhandedness of IBA AND IMPOSING some unwanted clauses to retirees. Further there is no transparency in the scheme of things in connection with medical insurance.     


11. Members of unregistered body IBA, are giving authority to IBA to negotiate wage revision for bank employees in the country. Members of IBA and some of the members are State by virtue of PSU nature, are authorizing IBA in this regard, without Authority of law, to a unregistered body IBA which is against Rule of Law and Public Interest, as the unregistered body IBA has no representative capacity to represent its member banks, Reserve Bank of India and Government of India.


12.  As the unregistered body IBA  has no responsibility and accountability, not coming under RTI Act, collecting huge monies  and spending the same and not filing any Returns with Government authorities, Government should take proper legal steps curb further activities of IBA. A statutory body on the lines of Insurance Regulatory and Development authority should come and monitor the activities of the banking in the country in the place of this unregistered body IBA. So Banking Regulatory and Development Authority is the only answer to address the present situation. And in view of the above, this unregistered body should be dissolved immediately and investigation by the independent government agency, has to be conducted into the affairs of the unregistered body IBA in the interest of public sector banks. Further its various instructions, clarifications, interpretations, advices have to revisited in the interest of Rule of Law and public interest.


With kind regards,


Former GM - BOB








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