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S. Ramachandran 

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We give below the details of the speech delivered by S. Ramachandran  by At the meeting organised by  BANK RETIREES GROUP, PUNE  on 18TH September, 2015 at 5.OOPM at the Niwara Hall on GROUP HEALTH INSURANCE POLICY FOR BANK EMPLOYEES  SIGNED BETWEEN IBA AND UFBU IN THE 10TH BIPARTITE SETTLEMENT DATED 25-5-2015 :-



Today we are meeting after a gap of nearly three months when we last discussed in detail on the record note of discussion dated 25-5-2015 signed by iba and ufbu on the retirees issue. Today we are going to discuss the various issues arising out of “group health insurance policy for bank employees” proposed by banks arising out of 10th bipartite settlement dated 25th may 2015.

I give  below my views on the above matter.

I welcome the move of the banks to extend the benefit of group policy to retirees ,which I hope will provide some relief to the retirees at the old age ,but I find  few restrictive conditions prescribed in the circular with regard to definition of family, entitlement and coverage  of the benefits. I quote below few of the deficiencies in the banks circular/replies given by DGM-HR in the meeting with principle office bearers on 24th august,2015 etc.

1.Banks are allowing very limited time for exercising  the option without understanding that the lacs of retirees are located in different parts of the country and are in very remote areas.

2.Many of the retirees have already taken mediclaim policies by paying certain premium and these policies are still valid for some more time. - No thought is given to  the above.

3.The premium indicated in the banks circular is very high and  for the first year of the policy and what will be the position after one year is not known . It is suggested that banks should have negotiated with the insurance co and freezed  the premium amount  at least for the next five years to avoid any financial additional burden on the retirees in case the premium is increased.

4. I understand retirees  are getting guided by the power point presentation prepared by the M/s K M  Dastur & Company, reinsurance broker ,at the behest of IBA giving only the good features of the policy but have not defined  all the salient features of policy which is a must to take a proper view before deciding for joining the group insurance . So please be careful before giving your consent to join the group insurance policy.

5.Though in the meeting with DGM-HR of Bank of Baroda  held with few principle office bearers on 24/8/2015 DGM-HR has replied as under to various questions raised. Few of which are given below.

   a. According to IBA the present premium amount shall remain unchanged for five years, . I feel this cannot be taken as views of lead insurance co the United India Insurance Co Ltd. unless and until they give in writing to retirees before joining the group insurance.

    b. Income tax benefit .- tax benefit may be available, bank to seek clarification from IBA and iba to seek for government clarification & approval. hence you will find that bank has not clarified this  point also firmly and  clearly.

6.. Who is going to be the manager of the group insurance ? ,who  is going to comply with time to time requirement of irda as stated in irda circular  ref no 015/irds/life//circular /g1 guidelines /2005 .is not banks circular

7. Bank has not disclosed in whose name the master policy will be issued

8. The bank has not disclosed the premium rate and all terms of the policy including the premium discounts offered to the group and should pass on to all the members.

9. The manager of the group has to disclose any administrative or other charges he is collecting from members over and above the premium charged by the insurance company. The bank is silent on all the above  points .

In view of the above please note that I have given my consent under protest to join the group scheme & in the absence of clarity in regards to terms of policy on banks website and to protect my right to pay the premium by the bank  from the staff welfare fund as per ministry of finance ,Govt of India circular no f no. 14/7/92 –ir(voii)dated 24th february,2012 to all the public sector banks.

 I understand that retirees especially under special VRS scheme are very keen to join the scheme as at present they are not getting any medical benefit under present banks scheme.. So while I would NOT like to come in their way on their above decision I feel I should caution them on the above points in the larger interest and permanent benefit.     

I would like to further inform/advice you all  that this group insurance cover was   due to us since long but due to delay on the part of IBA and banks this is being now introduced.  In this connection i would like to bring it to your kind information that,

“ despite a directive from the chairman of 2009 parliamentary standing committee on personnel public grievances law and justice that a medical scheme for retirees should be on the same lines of the one for serving employees “


“the directive of department of financial   services  , Govt of India bearing letter no 14/7/92-ir(voii) dated 24th february,2012  addressed to  Mr K. Unnikrishnan, Deputy Chief Executive, Indian Banks Association, Mumbai on the issue of staff welfare fund in public sector banks ,in terms which bank may consider the option of group insurance policies for both serving and retired employees instead of direct payment of benefit from the fund.

It is requested that IBA may take appropriate steps to inform all concerned banks accordingly

No cash payments shall be made to employees except for medical or educational purposes”

From the  above  you will find that this insurance scheme should have been introduced way back in 2009 or at least in February 2012 and neither IBA nor UFBU or banks ever bothered to introduce the scheme. Now after the 10th bipartite settlement also though banks are offering the above medical insurance to retirees is  not in proper form in which it is expected.

From the above stated directive of ministry of finance it is crystal clear that the circular of the bank to demand the retirees to pay the insurance premium is contrary to the above government directive / guidelines. the bank has to pay the insurance premium in respect of the retirees also out of the staff welfare fund  in the same manner in which they are paying for the existing service employees

I n view of the above wrong directives /instructions  of the bank to ask retirees to pay the insurance premium and other irregularities I have taken up the issue with the Chief Secretary, Ministry of Finance,  department of financial services, New Delhi ,on 16th august,2015 with a copy to CMD,  BOB and all the board of directors of the bank   and also wrote to  CMD, Bank of Baroda on 15th august 2015 with a copy to the board members  to reverse the decision of bank to demand the premium from retirees  and further not to debit rs 10/- per day of attendance to employees including officers as canteen subsidy in cash which is against the govt directive.  I understand that about Rs 12 crores is being debited to the staff welfare fund account every year towards this cash subsidy. However I regret to inform you that all the above authorities are totally silent on my letter as they are put in wrong box.

I am astonished that IBA which has received this government directive  directly, is the agency which has worked out the health insurance scheme by flouting the above Govt of India , Ministry of Finance, directive  and the directive from the Chairman of 2009 Parliamentary Standing committee on personal public grievances ,law and justice , that a medical scheme for retirees should be on the same lines of the one for serving employees.

I have also  sent a mail to CMD of United India Insurance Co Ltd,  Chennai, on 3rd Sept,2015 as this insurance company is appointed as “lead insurer” by IBA  as there are number  of very important issues are not answered in the banks circular  The points raised in my letter to insurance company are as under.  This is for your information and with a view  to take a final call in the matter of joining the group insurance. 


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I am pensioner of the Bank of Baroda stationed at the address given below and have come across, recently from the Website of the Bank, that Group Health Insurance Policy is introduced for the existing & retired bank employees.

I have already given consent on 24th August,2015 to the bank  under protest, to join the Group Insurance Scheme & in absence of clarity in regards to Terms of Policy on Bank’s Website, you being lead insurer, seek clarification on the policy , which you had agreed to provide, as under:-

1)     Who will be the Manager of the Group for Bank of Baroda employees, in whose favor policy will be issued;

2)    The Policy for serving Employee & Retired Employees will one and the same or different?

3)    Is the premium for serving employees & retired employees is uniform & all terms of coverage too are uniform.

4)    As the term of Health insurance Policy is of FIVE years and as per IRDA guidelines whether insured employee [beneficiary] will have the option of free look of policy?

It is  understood from the communication of IBA dated 29/06/2015 [Annexure – A] that the Policy will be issued in the name of “Indian Bank Association Member Bank” and your Company is appointed as “ Lead Insurer “ by the IBA and M/s K M Dastur & Company as Reinsurance Broker in the matter.

Your attention is invited to the IRDA guidelines issued on Group Insurance policies on 14/07/2005 [vide their communication No.015/IRDA/LIFE/CIRCULAR/GI GUIDELINES/2005] and request you to clarify on the following points:-

·         Bank of Baroda is charging the insurance premium of Rs7493/-per year from the retired officers for Insurance amount of RS 4 LACS, where as Group Manager [ It is still to be ascertained] is under obligation to provide details of premium & discount available to members , means insured employees and in absence OF clarity from the Group Manger, you are under obligation to provide the same.

·         The Bank of Baroda is asking retired employees for “Blanket Consent” for joining the Group Health Insurance Scheme, without providing the name of the insurer and also IBA without disclosing the terms of contract and without providing the Appendix I & II to the employees/insured person though mentioned in the letter NO :HROPS:SWF/INS/107/1929 dated 10th AUGUST,2015. ADDRESSED TO ME AND SENT BY REGISTERED POST ON 26TH AUGUST,2015  AND WHICH WAS DELIVERED TO ME BY POSTAL AUTHORITIES ON 31ST August,2015 that Appendix I & II appended herein. Have you authorized Group Manager in this regard & whether such authorization is permitted by IRDA?

·         As per IRDA guidelines issued on Group Insurance policies on 14/07/2005, whether INDIAN BANKS  ASSOCIATION  falls within the purview of the definition “Group - that consists of persons who assembles together with a commonality of purpose or engaging in a common economic activity like employees of a Company”?

·         The Employees [existing as well as retirees] of Bank of Baroda has no clearly evident relationship as member, with Group Manager IBA for service, other than Insurance and in violation of IRDA guidelines.

·         In the appendix-II of the joint Note dated 25/05/2015, it is clearly mentioned that “premium is decided by number of officers / employees uniformly but not based on the number of the dependent family members”. Despite the facts of collecting uniform and at par premium from retirees, whether excluding the dependent family members of retired employees will stand to the judicial scrutiny? [ The relevant extract of Appendix – II is attached herewith as annexure B]

·         At point No.2 of the appendix – II it is stated that “The policy will commence on a uniform date for all member Banks…” on the contrary I UNDERSTAND SO FAR only 5-6 banks have published the scheme to the Retired employees.

·         At point No.4 of the appendix – II of the joint note, it is mentioned that “The insured name of IBA is used for getting the benefit of mass scale underwriting & and a positive claim ratio that would benefit all the member banks” and exactly Group Manager, IBA is not passing the benefit to the insured and against the guidelines of IRDA dated 14/07/2005 and more specifically enumerated at point 1, 2 & 6 of the “Group Insurance Administration”.

·         Your attention is invited to last paragraph of the guidelines of IRDA referred above, which states The Insurer shall be held responsible to the person insured in respect of group policy……..”  and being state & Public Authority, becomes obligatory on your part  to ensure interest of the insured person and ensure that group manager too adhere to IRDA guidelines.

It would be appreciated to have EARLY clarification in the matter above in the interest of Insured & insurer & hope you will not constrain me to escalate the matter to IRDA.


With reference to the above, the medical insurance scheme for Officers and Employees, brought out by my ex employer namely Bank of Baroda, at the instance of unregistered body, Indian Banks’ Association and as there are number of  violations of your guidelines in this regard which are given below .

Sr. No.

Yours guidelines as per circular No. 015/IRDA/Life/Circular/GI Guidelines/2005 dated 14.07.2005

What is offered by the bank at the instance of unregistered body Indian Banks’ Association in violation of your guidelines


Para A 2 says that’ there should be a clearly evident relationship between the member and the group manager for services other than insurance”


The group manager is not identified yet. There are about 24000 pensioners in the bank, except payment of pension which is mandatory under bank’s pension regulations 1995, no clearly evident relationship between the member and group manager.


Para A 4 says that “Though entry into or exit from the group may go on continuously, entry into the group insurance policy for individual members will be from a well defined date such as the next anniversary of the policy or from the first of the following month or…..”

But as per bank’s letter No. HO:HR:Ops:SWF/INS/107/1929 dated 10.08.2015 says that “ IBA has also advised that the Option to join the Medical Insurance Scheme is a ONE TIME OPTION”. At this juncture it is necessary to know whether the Lead Insurer United Insurance co Limited has delegated power to IBA to advise the bank that it is one time option.


Para B 1, says that “ An insurer may sell group insurance policies either directly or through an insurance agent or insurance intermediary”

The unregistered Indian Banks’ Association has imposed this group insurance policy, whether it is insurance intermediary, what are terms of contract between IBA and Lead Insurer. Whether commission or service charges to be payable to unregistered IBA is payable by the members of the group of retirees/pensioners


Para B 2, says that “ An insurer shall not enter into any memorandum of understanding or marketing arrangement  or referral arrangement or any similar arrangement, howsoever or described, for sale of insurance products with any person or entity not licensed under the Insurance Act.”

The entity Indian Banks’ Association is an unregistered body, It has not obtained any license under the Insurance Act, but it is engaged in entering into a memorandum of understanding and has imposed the scheme on the pensioners without any transparency.  


Para C 7, says that “ In non employer – employee cases, the individual group member would be treated as the insured beneficiary and the group organizer will be only the holder of the group policy”.


Further it speaks that the certificate of insurance should contain information on the schedule of benefits, the premium charged and important terms and conditions of the insurance contract. Certificate should further contain the procedure to be followed to register a claim.

It is reported that in the case of retiree/pensioners the policy will be taken in the name of unregistered Indian Banks’ Association instead of in the name of my ex employer Bank of Baroda. I have not given any authority to Bank of Baroda to take the policy in the name of unregistered body IBA and I am not a member of group headed by IBA. I have objection and complaint in taking group insurance policy in the name of unregistered IBA at my cost.


These aspects are not mentioned in the Annexure IV of the bank which is displayed in its website


According para C 12, The insurer shall be held responsible to the persons insured, in respect of the group policy in case of failure of the group organizer or manager to account for the business to the insurer. 

It is reported that the insurance premium will be debited to the account of pensioner/retiree by the bank and group insurance policy will be taken in the name of unregistered body IBA without the authority of the insured. The unregistered body IBA has no responsibility and accountability and in the absence of it, the insured’s stake is not protected by the bank and hence this complaint to you.   


Further the Appendix I & II mentioned in the annexure IV of the bank is not made available to the pensioners/retirees as mentioned in its web site.     

The application for medical insurance scheme for officers/employees does not speak of the terms of the scheme on which this application is obtained, it simply has irrevocable letter of authority to debit my account towards current premium and further premiums in future.

The scheme is introduced by putting the same in bank’s website quoted above, the last dated fixed was 20.08.2015, later on extended to 31.08.2015 and now further extended to 30.09.2015. No letter of offer with full terms and conditions, such as rates of premium, discounts allowed and important terms and conditions are lacking in the offer made in bank’s website.

However, in the absence of the above vital ingredients,  I have given my consent on 24.08.2015 under protest as last was fixed as 31-8-2015 by my ex employer the Bank of Baroda.   

In this regard, I would like to stress once again is, IBA is not statutory body, it is registered neither under Trade Union Act 1926 nor Registration of Societies Act 1860. It is not a legal entity and it has no force of law in its advices to its member banks particularly public sector banks which are state agencies formed under the act of parliament. IBA has no accountability and responsibility and cannot handle crores premium of group insurance individuals paid through banks. Banks or its boards have no authority under law to engage a unregistered body  IBA. Under the circumstances a careful legal decision has to be taken sans IBA.

So friends I have tried to give you in detail my views based on my study in the matter of insurance and it is up to you to take a final call before signing the consent form with or without protest.

Thanking you for giving me an opportunity to express my views on this important issue and my thanks to the coordinators of this meeting which is in the interest of the retirees.

With regards,






S. Ramachandran                                                                                                      Kunal Icon, Building -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, Madhavapura Mercantile                                      E-mail id: 

Co-Op Bank Ltd ( Ahmedabad )

Former Director General, Maratha Chamber of

Commerce & Agriculture, Pune.                                        




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