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Retired Bankers Needs to Unite and Create Awareness Among PS Bank Board Members About Illegally Depriving the Retired Bankers their Demands and Reducing Pension under 10th BPS



S. Ramachandran and Rajesh Goyal 

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In the 10th BPS, retired bankers have been rudely told  that  contractual relationship does not exist between banks and retirees.  Therefore, we  need to go back to the time when 9th BPS was signed in March 2010,   An article in Economic Times in 2010 appeared under the heading “IBA signs revised pension agreement with bank unions” .  The above article included the following comments by IBA Chairman of that time:-


"There are the two aspects of our pension offer. There is a renewed pension offer to retired employees (after 1995-96 pension regulations) who earlier had not opted for the scheme earlier. All employees who are on the bank's roll as on March 30, 2010, will be covered under the existed defined benefit scheme. While those who join from April 1, 2010, will be covered under the government's new pension scheme and the government guidelines will be applicable," said MV Nair, chairman of Indian Banks' Association (IBA).


Thus, till 2010, IBA was of the firm view that there is a contractual relationship between banks and retirees and thus, the above offer was part of the 9th BPS.    Therefore,  retired bankers rightly  trusted UFBU and IBA, when demands of the retired bankers formed part of the Charter of Demands submitted to IBA, and during 30 months IBA never publicly objected to these demands.   IBA has never allowed the retired bankers associations to negotiate with IBA as UFBU have always included the demands of the retired bankers in their Charter of Demands and claimed that UFBU is only entitled to negotiate even on behalf of retired bankers.


Let me here give an overview of some of the demands included in the Charter of Demands by All Four Officers Unions, who were part of the UFBU : -


  Part IV : Superannuation Benefits  

      (1)   Pension should also be allowed to be paid on the last pay drawn or 10 months average, whichever is beneficial to the retiring officer;

      (2)   DA be converted as Basic Pension as and when the cost of living index increases by about 50%. 

       (3)   Upgradation of pension above 80 years of age should be made available;


(r)    In respect of all earlier retirees, improve the present Basic Pension as per mutual understanding : 

      (a)    Commutation : Should be revised to 40%  and full pension restored after 10 years;

      (b)    DA neutralization should be at par with serving officers; 

      (c)   VRS should be available in the Pension rules also;

      (d)   Pension scheme should be extended to all those who have been denied earlier on the basis of misinterpretation of the understanding reached with IBA; 

      (e) Additional service of 5 years be extended to all retirees;

      (f)    Family Pension should be at par with Govt and be at 30% of last drawn pay.  Be  paid for 10 years or till 70th year of notional age of the deceased;


      (g)   New Pension Scheme : Original pension should be paid even to officers who have joined 01.04.2010;

      (h)    Gratuity be paid at rate of one month salary and allowances and without any ceiling and exempted from payment of income tax; 

        (i)     PF should be at the rate of 12% of total salary and allowances.  Should be payable to all employees;

         (j)   Encashment of Leave : Upto 360 days encashment be allowed to all classes of retirees and exempted as to central government employees; 

        (k)  Medical scheme for pensioners / retirees should be framed on the lines available to EDs and CMDs

       (l)    Welfare Activities : Separate allocation be made for welfare of pensioners and facilities like Holiday Home, clinics, transit house be made eligible for pensioners also; 

      (m)   LFC / HTC facility : Extend the same to all retirees


The workmen unions too have included the demands of the retired bankers on similar lines in their Charter of Demands

It is interesting to note that UFBU even differentiated between superannuation benefits and welfare activities as the later were a separate category as shown above.

Thus, in nutshell we can say that the retired bankers till the signing of the 10th BPS had firmly believed that UFBU will look after their interest as their leaders have been promising so since they released the Charter of Demands in October 2012.  All retired bankers associations were barred to negotiate for the issues relating to retired bankers as this has been the tradition since beginning and 9th BPS has clearly indicated in its content and as per press interview of IBA Chairman quoted above.

However, the signing of 10th BPS proved to be betrayal by UFBU as they totally ignored the demands of the retired bankers inspite of these being included in the Charter of Demands.  The biggest set back was the Record Note signed by IBA and UFBU,  as it read   “demands of retirees can be examined only as a welfare measure as contractual relationship does not exist between banks and retirees. The periodic wage revision exercise based on mandate from member banks cover only wages and service conditions of serving employees. Retirement benefits are based on service conditions prevailing at the time of retirement of an employee and these do not change with settlement”.  

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The biggest question which is hunting retired bankers is that what law has changed between 9th BPS and 10th BPS that the contractual relationship between retirees and banks have ceased  to exist now?  Can UFBU quote any such law or IBA and UFBU have done it arbitrarily to merely cheat the retired bankers


On 28th May, 2015, we have published an article under the heading  Unconstitutional and Negative Attitude of IBA and UFBU Towards Retirees Exposed -  Pointwise Rejoinder To Record Note of Discussion of IBA and UFBU Relating to Retirees Issues”   by  S. Ramachandran.  In the said article Mr Ramchandran has forcefully rebutted what IBA and UFBU has tried to project by signing the Record Note.     The said article has over 950 facebook likes and over 130 comments, one of the largest in number for any article on this website.    The reason for this is that retired bankers have realized the reality of UFBU and IBA and have been shaken for the trust they have reposed in them as retired bankers till date were believing that UFBU will look after their interest.

After the Record Note becoming public, there are only few options for the retired bankers, which include appeals to the right minded people in authority, which are only limited in number, or they should approach the Courts.   The later course is certainly costly and time consuming.   Therefore, now S Ramachandran has sent us a copy of the letter which has written to the Board Members of BoB.   We are publishing the same hereunder.



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.                




                                                                                                                                       Date 1st,June,2015



Dear Sir/Madam,

                     Subject:- Unconstitutional and illegal attitude of IBA and UFBU in the matter of

                   Retirees issues as spelt out in the record note of discussion of IBA and UFBU

                   dated 25-5-2015

 This has reference to the press note dated 26th May 2015 issued by the Chairman of IBA Mr. T.M. Bhasin clarifying that the Adhoc arrears would be paid w.e.f. 1st November, 2012 immediately after its approval by the respective Boards of Banks and the new scale of pay will be implemented after due process of approval of Revised regulations by the Government of India and its adoption by respective Boards of Banks.

 The recommendation of IBA to implement and to pay the Adhoc amount is illegal as IBA’s recommendations have no force of law due to the fact that IBA is unregistered body under the law. Banks which are formed under the law and PSU BANKS are state as per constitution cannot accept such unforceful recommendation of IBA ,if they go ahead it will be against rule of law. The personnel who are public servants as per IPC and follow such recommendations which have no force of law, will be held accountable and responsible and they will be doing it at their peril.  

 It is rather unfortunate that all the issues relating to retirees have been kept aside and the issues of only serving employees have been dealt with at the industry level settlement. This is a great injustice to retirees who have given their brain, brawn and blood to the bank’s in their hey days.  It is against corporate ethics and governance for the Board to give effect to such one sided settlement, if at all they believe in corporate governance.  A good number of our pensioners  who retired after 1.11.2012 are hard hit in as much as   their pension is getting reduced considerably by several thousand whereas  in the normal course one expects a raise in pension on account of wage revision.

 THE WORST SCENIRO IS THAT OF REDUCTION OF PENSION IN CASE OF LARGE NUMBER OF  EXISTING PENSIONERS IRRESPECTIVE OF WHETHER THEY OPT FOR COMMUTATION OR NOT. This is a gross anomaly and a hit below the belt of pensioners.  How can the existing pensioners lose their current pension amount by several thousand on account of wage settlement? FURTHER THE REDUCTION IN PENSION IS AGAINST CONSTITUTIONAL PROTECTION TO THE EMPLOYEES AS PER THE DECISION OF MANIPUR HIGH COURT WP(C) NO 744 OF 2014 DATED22-5-2015.

  The manner in which the special pay concept has been brought in, the employees would be at loss for ever. It is a permanent disability without any external injury. Introduction of grade in the name of special allowance not taken for pension is to reduce the pension to the employees is against the well established practices in the country and elsewhere. When additional pension is released to the seniors to beat the inflation and medical expenses the settlement is against such principle.

 In view of what is stated above the Board needs to question such anomaly and deny the approval.  

 Mr Bhasin please be informed that the Hon’ble Minister of State Mr. Jayant Sinha  in  his reply to the Parliament question No.3396 and 2140  has stated that the total amount of Loan written off by the Public sector Banks during the last five years stands at Rs.1,06,170/- crores  and as per RBI data the gross NPA of Public Sector Banks are Rs.2,60.531/ crores as on December 2014. The total number of NPA borrowers of Rs.Ten crores and above as at the end of September 2014 are 2897 with amount outstanding of Rs.160164/- crores. Obviously, PSBs have to make provisions for these NPAs out of P&L whereas in terms of section 10(7) of Banking companies (Acquisition and Transfer of Undertakings) Act, 1970, issues of superannuation funds has prior charge over net profit. These NPA borrowers are enjoying the funds and the employees are being given a raw deal.


It is, therefore, our earnest appeal to the members of the Board not to approve such one sided wage settlement and both the Record note1 and Record note no 2 which reduces the pension amount of several existing pensioners by several thousand as, they are illegal, unconstitutional and against all cannons of justice and fair play besides being against corporate governance. Further the unique landmark note on discussion on the retirees issues between IBA AND UFBU will go down in history as a record note or sorts , anti labour , anti elders ,senior citizens and human rights and above all brings to the surface the simmering one sided employee oriented wage talks to the utter detriment of all pensioners and oozing in contents with absolute negativity not even exhibiting an iota of concern to pensioners or any sense of HRD or empathy towards a dwindling species ,totally forgetting the dedication of sacrifice by these elders to the cause and progress of the institution they served  

 We may further mention here that Hon’ble High Court of Allahabad has  already stated that the settlement is subject to decision of writ petition filed by WE BANKERS who have highlighted the reduction in pension of many existing pensioners. Since  the matter is sub-judice, we request you to refrain from giving effect to the settlement and the record note 1 and record note 2.  







PUNE 1-6-2015

The above letter represents the plight of the retired bankers and betrayal by UFBU and IBA.    I think the above letter should be sent to as many directors of different PS Banks as possible so that an awareness is created among them about the plight of the retired bankers.   This is of greater importance to ensure that this letter reaches independent directors of every PS Bank as law prescribes for certain liabilities for them.   Let retired bankers find out the addresses and emails of the directors of their own banks and send the modified version of the above letter to them through email / regular postal mail.

This will help create awareness about the illegal agreement that has been signed in the form of “Record Note” depriving the retired bankers their rights.

I just read on a FaceBook a circular issued by a Retired Bankers Association which appears to be only  a sister organization of AIBOC.  In the said circular they have tried to defend UFBU / AIBOC and claimed that AIBOC will now assist retired bankers in realization of their demands.   This is one of the worst kind of claims after what we have seen in Record Note vs Charter of Demand for 10th BPS.   No one should be befooled by such claims as it is another mode to cheat the retired bankers.

 I am sorry to say that only a handful of retired bankers are aware of the intricacies and betrayal of UFBU and IBA.  Others have learnt to suffer and die slow death.    Therefore, there is a need to create awareness among the retired bankers so that they also understand as to how IBA and UFBU has cheated them.  If you understand these, ensure that you tell your friends who have resigned to their fate and have lost the will to fight IBA.   Now maximum number of retired bankers have to be romped in to fight the legal battle.  IBA and UFBU alongwith bank management will try their best to throttle the rising voices of retired bankers. 


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