The Bank Page

Unanswered questions on arrear payment

2019-10-06T19:04:00.000+05:30

The sudden love of the IBA to offer adhoc arrears raises several questions;

1. Wage settlement was due since Nov 2017, even though Government was in favour of wage settlement to be completed by October 2017 the first offer of 2,% was made by IBA only in 2018 nearly one year after wage settlement was due. Where was this love then?

2. The first offer made by IBA was meagre 2% (remember bank wage settlement is for five year term) . Where was this love then ?

3. Till now there are nearly 30 rounds if discussions held without any concrete outcome except that the offer stands at 12%. Where is the love?

4. Till now IBA is not able to get clear mandate for wage settlement upto Scale VII as was common practice. When it can order all banks to pay adhoc arrears and banks are following it thinking that there is no tomorrow can't IBA apply the same for mandate issue. Where is the love?

5. Lot of sub committee have been formed to settle various demands delaying the process further, when all union representative are available at meeting what was the necessity to have such sub committes. Where is love then?

6. Why IBA did not consult unions before releasing the orders for payment of adhoc arrears when they are party to negotiation, was the intention f IBA is to degrade unions in eyes of employees or to show its its supremacy. Where is love then?

7. Bankers toiled day and night during demonetisation time and asked for compensation in form of overtime which failed to reach IBA or it acted as unheard, then where this love came when nobody asked for it ?

8. Does IBA wants to pacify bankers as they are angry with wage settlement delay,bank mergers, proposal to go for strike etc ?

9. There are various issues like security of ATM, attack on bank staff by public at branch or during recovery, decoity at branches, recovery of big corporate NPA, mess created by Government by giving loan waivers causing prompt payers to shun repayment and other problems which needs to be addressed by IBA, leaving all these why such love to release arrears when there is no time limit set for conclusion of wage settlement?

Or is the IBA hinting that the settlement conclusion may take two more years ?

One month salary in advance for bank employees

2019-10-02T19:54:00.000+05:30

In a surprising move IBA has advised all banks to pay one month salary in advance during this festive season. But this amount will be debited from their arrears. It's also to be mentioned that salary settlement of bank employees is due since November 2017. But it's interesting to note that unions are opposing the move by IBA.

Cash withdrawal limit on SB, ATM and other accounts

2017-02-11T20:28:00.001+05:30

Reserve Bank of India with effect from 30th January 2017 has removed limits on cash withdrawal from Current / Cash Credit/Overdraft accounts.

Reserve Bank with effect from 1st February 2017 has removed daily limit of Rs.10000 and made it Rs.24000 per day or the limit set by the bank for daily withdrawal thro card retaining Rs.24000 limit per week.

Reserve Bank with effect from 20th February 2017 will raise daily withdrawal limit from Savings Bank account to Rs.50000.

Reserve Bank with effect from 13th March 2017 will remove all limits for cash withdrawal from Savings Bank Account.

With that all restrictions on cash withdrawal from all type of accounts and ATM with go and normal transactions will take place bringing demonetisation process to end.

Cash Reserve Ratio (CRR)

2015-12-25T19:49:00.000+05:30

All Scheduled Commercial Banks are required to keep a portion of money received from its customer with RBI this is called Cash Reserve Ratio. But Why ? the answer can be known by reading below article on CRR,

All of we know RBI is the controller of Banks and the monetory / credit system of our country. The RBI act gives it wide powers to do so. Cash Reserve Ratio is one such power of RBI.

As per Section 42(1) of RBI act of 1934 RBI having regard to securing monetary stability of the country prescribes CRR without any floor or ceiling rate.

The CRR rate at present is 4% of total Demand and Time Liabilities (DTL). This means for every Rs.100 you deposit in your bank they have to deposit Rs.4 with RBI without any interest.

Demand Liabilities constitutes those deposits which are payable on demand like Current Deposits and Savings Deposits etc.

Time Liabilities constitutes those deposits other than demand deposits like Fixed Deposits, Recurring Deposits etc.

There are certain categories on which CRR is not required to be maintained and there are some exempted categories for CRR also.

A lag of one fortnight is given for banks to maintain the required CRR. The daily CRR requirement is 95% of the average daily requirement for the fortnight.

RBI do not pay any interest on the CRR balance kept by SCBs.

There is penalty for not maintaining the required CRR of 95%. The rate is 3% above bank rate per anum for the default day. If default carried to next day/s then rate is 5% above the bank rate per anum.

The higher CRR shrinks the funds available with the banks. Lower CRR increases liquidity.

Bank Strike

2015-11-13T20:56:00.004+05:30

AIBEA has called for all India strike of Bank Employees on 2nd December 2015

Happy Diwali 2015

2015-11-10T20:17:00.002+05:30

National Pension System

2015-08-02T20:45:00.000+05:30

NPS – New Pension Scheme – Boon for your old age

NPS called National Pension System is a pension scheme wherein every citizen can participate. The pension they get depend on the amount contributed and the return generated under the scheme.

What is Pension ?

Pension is the monthly amount you get for your living from the amount you contributed to pension fund for a certain number of years.

Why you need pension?

The drastic increase in number of old age homes is the best answer for this. Now a day the concept of joint family has almost become extinct. The families are shrinking to micro families consisting of husband , wife and their children. The parents are made to leave home, ill treated and in many cases parents are finding difficult to adjust to new lifestyle and voluntarily leave home. The single parent trend and divorce cases are increasing day by day. This defines the need for pension system.

About New Pension System (NPS)

The NPS is introduced by Government of India to address all above needs. The system is regulated by PFRDA (Pension Fund Regulatory and Development Authority) and NSDL (National Securities Depository Limited ) is appointed as CRA (Central Recordkeeping Agency) for the scheme.

How to open the account under NPS

This is a very simple process. PFRDA has appointed many Banking and Non-Banking Financial Companies as POP-SP (Point of Presence – Service Providers) with whom you can open your account. The full list of POP-SP is available at PFRDA website.

Documents required to open account under NPS

a >NPS account opening form

b >One photo

c > PAN card, Voter ID, Driving Licence etc (for Identity Proof)

d > Bank Pass Book, Voter ID, Driving Licence etc (for address Proof)

e > Cancelled cheque

Initial Contribution (minimum Rs.500/- plus charges for account opening etc)

Account options available

Tier I account and Tier II account

About Tier I account

This is compulsory account to be opened under NPS.

Minimum contributions under this scheme is Rs.6000 per year.

There is no upper ceiling for contribution.

You can invest monthly or as per your choice but one contribution of Rs.6000 per year is compulsory for keeping the account alive.

You can make investment in Equity, Corporate bonds, Government Securities as per your wish. There are two choices of investment one is Active where you decide the percentage of investment in above category . Equity (max. 50% of investment ) Corporate Bond ( max. 100% of investment) Government securities ( max. 100% of investment). The general perception is that Equity has maximum risk and maximum return, Corporate Bond has medium risk and medium return, Government securities has Low risk and low return. The other type of investment is Auto wherein the Pension fund manager through which you decide to invest can invest the amount as per their wish which is normally called life cycle fund. The investment is normally made as below.

set allocation under auto choice

Age	Asset Class E	Asset Class C	Asset Class G
Upto 35 years	50%	30%	20%
36 years	48%	29%	23%
37years	46%	28%	26%
38 years	44%	27%	29%
39 years	42%	26%	32%
40 years	40%	25%	35%
41 years	38%	24%	38%
42 years	36%	23%	41%
43 years	34%	22%	44%
44 years	32%	21%	47%
45 years	30%	20%	50%
46 years	28%	19%	53%
47 years	26%	18%	56
48 years	24%	17%	59%
49 years	22%	16%	62%
50 years	20%	15%	65%
51 years	18%	14%	68%
52 years	16%	13%	71%
53 years	14%	12%	74%
54 years	12%	11%	77%
55 years	10%	10%	80%

Pension Fund Managers:

Pension Fund Managers are the persons handling your money. The money you deposit with POP-SP is transferred to Pension Fund managers who in turn will invest the money according to your choice. The PFM as on date are

1. LIC Pension Fund Limited

2. SBI Pension Fund Limited

3. UTI Retirement Solutions Ltd

(All government departments who cover their employees under NPS has to route their funds through above three PFMs only)

4. HDFC Pension Management Co. Ltd.

5. ICICI Prudential Pension Fund Management Co. Ltd.

6. Kotak Mahindra Pension Fund Ltd.

7. Reliance Capital Pension Fund Ltd.

8. Birla Sunlife Pension Management Limited

(Private firms and General Public can invest in any of PFMs listed from 1 to 8)

About Tier II account

This is an optional account that can be opened with Tier I account.

Minimum contribution under this scheme is Rs.1000 at the time of opening account and Rs.2000 per year and there is no ceiling on maximum contribution.

This is like investment account, the subscriber can withdraw the amount from this account any time.

Pension options:

1) When you attain age of 60

You will have to invest minimum 40% of the corpus to purchase annuity which provides you monthly pension. The remaining 60% is given to you in lump sum. You also has the option to keep your lump sum investment invested and get it back anytime till you are 70.

2) You want to exit from NPS before 60

You will have to invest minimum 80% of the corpus to purchase annuity which provides you monthly pension. The remaining 20% will be given to you in lump sum. But you had to be invested in NPS for minimum of 10 years.

3) If you die before 60 years then 100 % of the corpus will be given to nominee.

Partial withdrawal options:

You can partially withdraw your contribution from the fund but on certain conditions

1) You have to be invested for minimum period of 10 years.

2) You can withdraw 25% of your contribution.

3) You can withdraw for certain specified reasons only.

4) You can withdraw maximum 3 times during entire period with a gap of 5 years for each withdrawal.

Tax exemptions available:

1) Under NPS tax deduction can be claimed upto 10% of salary (Basic plus DA) subject to overall ceiling of Rs.1.5 lakh per anum under section 80 CCE of income tax.

2) An additional deduction of Rs.50000 per anum is available towards contribution to NPS Tier I account under section 80 CCD (1B).

How to monitor your investments:

On being enrolled with POP-SP with minimum subscription you will receive your PRAN card within one month. The PRAN card will contain your 12 digit NPS number . Then you will receive your IPIN and TPIN. IPIN can be used on internet to access your account at www.cra-nsdl.com whereas TPIN can be used to communicate over telephone at 1800-222080.

I have tried to give the required information on NPS further information can be got by visiting PFRDA or NPS websites.

Last date for cover under Pradhan Mantri bima yojana is 31st August 2015

2015-06-28T11:43:00.001+05:30

Last date for getting cover under PMJJBY and PMSBY is 31st August 2015. Kindly spread the message so that the lower class and lower middle class families get the cover in time to reap the benefit of the scheme.

Pradhan Mantri Suraksha Bima Yojana (PMSBY)

2015-06-28T11:33:00.000+05:30

Pradhan Mantri Suraksha Bima Yojana is another Insurance scheme by Modi Goverment which will help the family to cope with the situation on death of bread winner of family. The Scheme guidelines are as below;

Eligibility: Available to people in age group 18 to 70 years with bank account.

Premium: Rs. 12 per annum which comes to just Rs.1 per month.

Payment Mode: The premium will be directly auto-debited by the bank from the subscribers account. Risk Coverage: For death due to accident Rs.2 lakh payable to nominee. In case of loss of two eyes OR tow limbs Rs.2 lakh payable to assured. In case of loss of one eye OR one limb Rs.1 lakh payable to assured

Eligibility: Any person having a bank account can submit simple form to the bank and get enrolled for the scheme.

The premium paid will be tax-free under section 80C and also the proceeds amount will get tax-exemption u/s 10(10D).But if the proceeds from insurance policy exceed Rs.1 lakh , TDS at the rate of 2% from the total proceeds if no Form 15G or Form 15H is submitted to the insurer.

Pre 2005 printed currency notes

2015-06-28T11:08:00.001+05:30

Now, you can exchange the Pre 2005 printed currency notes with any bank branches till December 31, 2015 against June 30,2105 as decided earlier. Kindly exchange the notes with your bank within the time limit or else you may not be in a position to do so post December 31, 2015.

Pradhana Mantri Jeevan Jyoti Bima Yojana ( PMJJBY )

2015-06-07T20:08:00.000+05:30

PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA

The scheme will be a one year cover, renewable from year to year, Insurance Scheme offering life insurance cover for death due to any reason. The scheme would be offered / administered through LIC and other Life Insurance companies willing to offer the product on similar terms with necessary approvals and tie ups with Banks for this purpose. Participating banks will be free to engage any such life insurance company for implementing the scheme for their subscribers.

Scope of coverage: All savings bank account holders in the age 18 to 50 years in participating banks will be entitled to join. In case of multiple saving bank accounts held by an individual in one or different banks, the person would be eligible to join the scheme through one savings bank account only. Aadhar would be the primary KYC for the bank account.

Enrolment period: Initially on launch for the cover period 1st June 2015 to 31st May 2016, subscribers will be required to enroll and give their auto-debit consent by 31st May 2015. Late enrollment for prospective cover will be possible up to 31st August 2015, which may be extended by Govt. of India for another three months, i.e. up to 30th of November, 2015. Those joining subsequently may be able to do so with payment of full annual premium for prospective cover, with submission of a self-certificate of good health in the prescribed proforma.

Enrolment Modality: The cover shall be for the one year period stretching from 1st June to 31st May for which option to join / pay by auto-debit from the designated savings bank account on the prescribed forms will be required to be given by 31st May of every year, with the exception as above for the initial year. Delayed enrollment with payment of full annual premium for prospective cover may be possible with submission of a self certificate of good health. Individuals who exit the scheme at any point may re-join the scheme in future years by submitting a declaration of good health in the prescribed proforma. In future years, new entrants into the eligible category or currently eligible individuals who did not join earlier or discontinued their subscription shall be able to join while the scheme is continuing, subject to submission of self-certificate of good health.

Benefits: Rs.2 lakhs is payable on member’s death due to any reason Premium: Rs.330/- per annum per member. The premium will be deducted from the account holder’s savings bank account through ‘auto debit’ facility in one installment, as per the option given, on or before 31 st May of each annual coverage period under the scheme. Delayed enrollment for prospective cover after 31st May will be possible with full payment of annual premium and submission of a self-certificate of good health. The premium would be reviewed based on annual claims experience. However, barring unforeseen adverse outcomes of extreme nature, efforts would be made to ensure that there is no upward revision of premium in the first three years.

Eligibility Conditions:
a) The savings bank account holders of the participating banks aged between 18 years (completed) and 50 years (age nearer birthday) who give their consent to join / enable auto-debit, as per the above modality, will be enrolled into the scheme.
b) Individuals who join after the initial enrollment period extending up to 31st August 2015 or 30th November 2015, as the case may be, will be required to give a selfcertification of good health and that he / she does not suffer from any of the critical illnesses as mentioned in the applicable Consent cum Declaration form as on date of enrollment or earlier.

Master Policy Holder: Participating Banks will be the Master policy holders. A simple and subscriber friendly administration & claim settlement process shall be finalized by LIC / other insurance company in consultation with the participating bank.

Termination of assurance: The assurance on the life of the member shall terminate on any of the following events and no benefit will become payable there under:
1) On attaining age 55 years (age near birth day) subject to annual renewal up to that date (entry, however, will not be possible beyond the age of 50 years).
2) Closure of account with the Bank or insufficiency of balance to keep the insurance in force.
3) In case a member is covered under PMJJBY with LIC of India / other company through more than one account and premium is received by LIC / other company inadvertently, insurance cover will be restricted to Rs. 2 Lakh and the premium shall be liable to be forfeited.
4) If the insurance cover is ceased due to any technical reasons such as insufficient balance on due date or due to any administrative issues, the same can be reinstated on receipt of full annual premium and a satisfactory statement of good health.
5) Participating Banks shall remit the premium to insurance companies in case of regular enrolment on or before 30th of June every year and in other cases in the same month when received.

Administration: The scheme, subject to the above, will be administered by the LIC P&GS Units / other insurance company setups. The data flow process and data proforma will be informed separately. It will be the responsibility of the participating bank to recover the appropriate annual premium in one installment, as per the option, from the account holders on or before the due date through ‘auto-debit’ process. Members may also give one-time mandate for auto-debit every year till the scheme is in force. 3 Enrollment form / Auto-debit authorization / Consent cum Declaration form in the prescribed proforma shall be obtained and retained by the participating bank. In case of claim, LIC / insurance company may seek submission of the same. LIC / Insurance Company reserves the right to call for these documents at any point of time. The acknowledgement slip may be made into an acknowledgement slip-cum-certificate of insurance. The experience of the scheme will be monitored on yearly basis for re-calibration etc., as may be necessary.

Appropriation of Premium:
1) Insurance Premium to LIC / insurance company : Rs.289/- per annum per member
2) Reimbursement of Expenses to BC/Micro/Corporate/Agent : Rs.30/- per annum per member
3) Reimbursement of Administrative expenses to participating Bank: Rs.11/- per annum per member

The proposed date of commencement of the scheme will be 1st June 2015.The next Annual renewal date shall be each successive 1 st of June in subsequent years. The scheme is liable to be discontinued prior to commencement of a new future renewal date if circumstances so require.

Government to infuse Rs.6990 crore to 9 PSB's

2015-02-08T18:18:00.001+05:30

The Government will soon infuse Rs.6990 crore to following 9 Public Sector Undertaking Banks.

State Bank of India Rs.2970 crore

Bank of Baroda Rs.1260 crore

Punjab National Bank Rs.870 crore

Canara Bank Rs.570 crore

Syndicate Bank Rs.460 crore

Allahabad Bank Rs.320 crore

Indian Bank Rs.280 crore

Dena Bank Rs.140 crore

Andhra Bank Rs.120 crore

This is first time that the Government is using efficiency parameter to distribute the capital. The parameter used are

a) Weighted Average Return on Asset for all PSB's for the last three years will be calculated and those above the average has been considered.

b) Return on equity for last financial year will be calculated and those better than average have been considered.

This year the Government has allocated Rs.11600 crore for capital infusion in PSB's

Wage Settlement talks dtd 03.02.2015

2015-02-03T19:57:00.000+05:30

V/s

During the wage settlement talks held between UFBU and IBA today, IBA improved the offer by 0.5% to 13%. This was not accepted by UFBU which had come down from 30 % to 19%. Hence they revived their strike programme which will be observed from 25th February 2015 to 28th February 2015 continued by Indefnite strike from 16th March 2015.

RBI disappoints

2015-02-03T19:44:00.000+05:30

6th Bi-monthly monetary policy dtd 3rd February 2015

RBI Governer Mr. Raghuram Rajan disappointed market by not reducing the Bank Rate which was expected at 25 basis points. In the Sixth Bi-monthly monetary policy statement for 2014-15 announced today RBI

kept the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 7.75 per cent;
kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0 per cent of net demand and time liabilities (NDTL);
reduced the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points from 22.0 per cent to 21.5 per cent of their NDTL with effect from the fortnight beginning February 7, 2015;
replaced the export credit refinance (ECR) facility with the provision of system level liquidity with effect from February 7, 2015;
continued to provide liquidity under overnight repos of 0.25 per cent of bank-wise NDTL at the LAF repo rate and liquidity under 7-day and 14-day term repos of up to 0.75 per cent of NDTL of the banking system through auctions; and
continue with daily variable rate term repo and reverse repo auctions to smooth liquidity.

Consequently, the reverse repo rate under the LAF will remain unchanged at 6.75 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.75 per cent.

DA for Bankers from Feb 15 to April 15

2015-02-02T19:35:00.000+05:30

Based on CPI announced for Oct, Nov and Dec 2014, the DA will crease by 2 slabs for bankers for Feb, Mar, Apr 2015. The new DA will be 110.10% (+0.3%).

Corporation Bank - Share Split

2014-12-25T19:51:00.002+05:30

Corporation Bank will split its shares from face value of Rs.10 to Rs.2. January 23 will be the record date for the same.

Negotiate - not agitate - IBA tells Bank Unions !!!!!!!!!!!!!

2014-12-25T19:47:00.000+05:30

IBA (Indian Banks Association) which represents Bank Management and the Government tells Bank Unions to Negotiate and not agitate !!!!!!!!!!!!!!!.

Mr. Tanksale said "the ninth bipartite settlement was as exception" wherein settlement was arrived at 17.5%.

This message comes from the IBA after 26 months of negotiation with the unions, If the matter cannot be resolved by IBA even after 26 months of negotiation with the Bank Unions. Then, should the bank employees to wait for another 34 months doing negotiation ??? What was IBA doing in all the rounds of negotiation till date.

Was Mr. Tanksale right in calling 9th Bipartite settlement abberation wherein 17.5% increase (for a total period of 5 years) was given. Earlier wage settlements seen the increase of 13%. Then where is abberation. Does Mr. Tanksale thinks they have given 25% increase in salary ?

He also informed “In the current wage settlement, a hike of 11 per cent on salary and allowances has been offered, based on the paying capacity of all the banks, lower profitability, higher requirements for provisions and further capital requirement under Basel-III, translating into 12.5 per cent on the balance sheet cost. This too is unaffordable to some of the banks.”

IBA said the issues regarding wage negotiation deliberated in the Negotiating Committee of the IBA were further discussed in a larger forum — Managing Committee of IBA — and the Chairmen of all the banks felt the demand for 23 per cent increase made by the Unions/Associations is unaffordable, illogical, exorbitant and irrational.

Its surprising that the IBA-Governemnt is thinking miles ahead to increase salary of profit making PSBs. But when the government itself is loss making (due to fiscal deficit) how its paying salary for its Governement servants and how Pay commissions are formed in advance for them ????

Gyan Sangam of Mr. Narendra Modi

2014-12-25T19:14:00.000+05:30

Prime Minister Mr. Narendra Modi will have discussions with chiefs of public sector banks and financial instituitions at Pune on 2nd and 3rd of January 2015 to draw action plan for banking reforms. The programme is being called " Gyan Sangam " Apart from Mr. Modi other dignitories who are expected to attend the discussions are Mr. Arun Jaitley, finance minister, Mr. Raghuman Rajan, RBI Governer, Mr.Jayant Sinha, Minister of State for Finance, Mr. Rajiv Mehrishi, Finance Secretary etc.

Major points on which discussions will be held include;

1) Consolidation of banking sector
2) Capitalisation needs of banking sector
3) Risk management
4) Recovery management
5) Human Resources Management

Wage Revision

2014-12-23T20:40:00.001+05:30

Bank Unions action plan for early settlement of Wage Revision;

The wage revision of above 10 lakhs bank employees is due from 1st November 2014. The IBA which represents the Bank Management and Government is very adament to the proposal of wage hike of 25% put by the bankers. IBA is not moving a inch and glued to its 11% hike in wages which the bank unions have opposed. There were strikes by unions on various dates to preasurise the government which have yielded no results till date.

The bank unions have put forth the following plans during January 2015 to March 2015 for the wage revision of the employees;

1) One day strike on 7th January 2014.

If above do not yield any result, then

2) Four day strike from 21st January 2014 to 24th January 2014.

If above also do not yield any result, then

3) Indefinite strike from 16th March 2015

We wish best of luck and early wage settlement for bank employees.

Pre-2005 Currency notes

2014-12-23T20:24:00.002+05:30

Now, RBI has informed that Pre-2005 currency notes can be deposited at bank branches till 30th June 2015. Earlier RBI has set 31st December 2014 as the deadline to do so. Now, with extended time you can deposit Pre-2005 with banks at ease and you will get hundred percent value. But don't keep on waiting for RBI to extend the deadline once again. Due it early.

Bank Wage Settlement

2014-12-19T19:29:00.000+05:30

Wage Settlement next actions proposed by UFBU

One day strike on 7th January 2015.

Four day strike from 21st January 2015 to 24th January 2015.

Indefnite strike from 16th March 2015.

Wage Settlement - AIBOC press release

2014-02-06T22:03:00.002+05:30

(taken from 'all banking solution')

REF: AIBOC/2014/01 DATE: 05/02/2014

PRESS RELEASE – SALARY REVISION

The revision of salary of around 10 lac bank officers and employees is due from 1st November 2012 for which a comprehensive Charter of Demands was submitted by the Officers’ Organisations to Indian Banks’ Association (IBA) on 30th October 2012. In the last 15 months, 8 rounds of discussions have taken place between IBA and Officers’ Organisations and date of effect from 01.11.2012 and DA Merger points at 440 points were the only two issues settled.

Apart from this, IBA has made an initial offer of 5% salary increase on “pay slip component” which was enhanced to 9.5% after the Unions gave a strike notice and Central Labour Commissioner intervened to avert the strike. In the next round of discussion held on 27th of January 2014, IBA improved the offer by 0.50% i.e. from 9.5% to 10% which was considered as insultingly inadequate and less than what was offered in the last Bipartite Settlement and hence rejected by the Employees’ and Officers’ Organisations.

Historically, the bank officers were paid higher salary than the Government officers of comparable Grade due to various factors like Accountability, Transferability, Responsibility and Role-sensitivity. To have a parity with Government employees, Pillai Committee was constituted in 1979 and as per the Committee’s recommendations the pay scales of bank officers were rationalised and made at par with Government Officers. Such parity was distorted to the disadvantage of bank officers by implementing 4th, 5th and 6th Pay Commission Recommendations at much higher levels and the salary difference at initial stage of pay is alarmingly high. The bank officers’ gross pay slip amount at initial stage is about Rs.30700/- as against Rs.56400/- for Government officers. Similar differences exist at different stages in the hierarchy. It has caused serious impact on the quality of recruits in a highly sensitive sector like banking.

Salary payment made by all sectors is so high and bank-men were forced to get less salary not only compared to his counter parts in Private Sectors but also others in the market and bank-men can no longer be called in Island of high-wages.

A study conducted by National Skill Development Corporation has suggested that banks would need to recruit 4.50 lakh employees in next couple of years which calls for making the job attractive and competitive in terms of monetary compensation. PSBs are doing a yeoman service not only for the growth of productive sector of the economy but also uplifting the neglected sectors of the society. PSBs have done a commendable job in enhancing the penetration level of bank branches in remote villages, Financial Inclusion, implementation of various schemes of the Government etc.

In this background, it would be appropriate to note that the productivity of the bank employees has gone up from Rs.594 lacs as on 31.03.2008 to Rs.1151 lacs as on 31.03.2012. The business of PSBs in last 5 years has gone up from Rs.3322000 crores (2007) to Rs.8487000 crores (2012). Similarly the profit per employee has increased from Rs.3.70 lacs (2008) to Rs.6.40 lacs (2012). Though the business has gone up substantially but the staff strength is not commensurate with the business growth. The wages to total expenses also have come down from 14.66 % to 13.72 % in last 5 years.

These figures are indicative of increased work load and unduly extended working hours for the officers of PSBs. The growing materialism in the society has given rise to more frauds. The insufficient staff strength has weakened the preventive mechanism and monitoring systems in the banks ultimately lead to more vigilance/disciplinary and CBI cases against bank officers. The officers in PSBs are becoming risk-averse which affects the competitiveness at market place. The monetary compensation is considered an important motivator world-wide. The Fifth Central Pay Commission while recommending substantially higher pay scales for Government officers had justified the same on the grounds that higher compensation will prevent the Government officers from getting attracted towards the allurements. The same justification must apply for PSB officers where the incidence of such allurements could be much higher.

The issue of affordability raised by IBA is farce and untenable as, despite after achieving social objectives(which are not expected to generate profits to the Banks) the Net Profit of PSBs is more than Rs.50000 crores, even after providing Rs.43102 crores towards bad loans (NPAs) whereas even an increase of establishment expenses by Rs.10,000 Crores works out to 17.76% of total establishment cost of the banks as compared to 17.50% given in last salary revision. It thus will have negligible impact on the balance sheets of banks. It is more alarming while seen in an environment where PSBs have written off Rs.95717 crores in last 6 years of which Rs.27013 crores were written off in the year ended 31.03.2013 alone. Thus huge sums are being doled out to fraudsters and dishonest corporates out of hard earned Operating Profits by write-off and deep-discounted One Time Settlements (OTS) to help the loan defaulters.

Last salary revision for PSB officers was at 17.5% of establishment cost which after factoring for superannuation costs and non-salary components of establishment cost left 11.43% for appropriation towards pay slip increase. Since establishment cost is almost double of salary cost, the average pay slip increase for the PSB officers was 21.52%. In view of alarming increase in the inflation and cost of living coupled with substantial erosion of purchasing power, the PSB officers deserve to be adequately compensated by giving an increase more than last salary revision on pay slip cost. It may be recalled that pay slip increase at General Manager level was around 29.76% during last salary revision. Such an increase will also help reduce the pay slip difference of PSB officers vis-a-vis the Government officers. The role of PSB officers in nation building needs to be acknowledged by the Government by restoring pay parity with Government officers. Since about 50% of the new recruits in PSBs are women, adequate compensation would also help in women empowerment.

(HARVINDER SINGH)
GENERAL SECRETARY

ALL INDIA BANK OFFICERS’ CONFEDERATION
(Registered under the Trade Unions Act 1926, Registration No.:3427/Delhi)
C/o Bank of India, Parliament Street Branch
PTI Building, 4, Parliament Street, New Delhi:110001
Phone:011-23730096 Tel/Fax 23719431
E-Mail: aiboc.sectt@gmail.com

Bank Strike Stands

2014-02-06T18:30:00.001+05:30

The Bank Employees will observe strike on 10th and 11th February 2014 as the concilation meeting held by CLC (Chief Labour Commissioner) and IBA (Indian Bank's Association) , UFBU (United Forum of Bank Unions) held today failed as the IBA did not increase the offer.

Bulk deposit rates shoot up as banks scramble for cash

2014-02-06T18:25:00.003+05:30

The liquidity situation may be comfortable, but banks have started building up their balance sheets ahead of the financial year-end to meet yearly targets. This has resulted in a spike in bulk deposit rates as banks are offering as much as 9.4-9.6% as compared to the card rate of 9% for one-year deposits. Bulk deposits are typically Rs 10 Cr and above. Canara Bank, for example, has sealed a Rs 500-Cr bulk deposit deal of one-year maturity with an Andhra Pradesh-based PSU for 9.61%. Similarly, Bank of Baroda offered 9.41% for a Rs 200-Cr deal. The card rate for deposits of similar maturity is 9%. Spectrum outflow and advance tax have left banks worried about liquidity ahead of the financial year-end. Banks are offering 9.4-9.6% as compared to the card rate of 9% for one-year deposits.

Bank Strike on 10th and 11th

2014-02-05T19:53:00.002+05:30

All Public Sector Bank employees will observe 2 days strike on 10th and 11th February 2014 as the Wage Settlement which is due from November 2012 has not been settled till now. The IBA has offered 10% hike which is duly rejected by the unions represented by UFBU.