Important News 14th August

Govt approves compassionate appointments in public sector banks-Hindu Business Line

THIRUVANANTHAPURAM, AUG 11:  

The Government has accorded approval for a scheme of compassionate appointment in public sector banks.

The Department of Financial Services in the Union Ministry of Finance has conveyed this in a communication to the Indian Banks’ Association (IBA) dated August 7.

The scheme is effective from August 5.

EX-GRATIA SCRAPPED

While approving the compassionate appointments in public sector banks, the communication has sought to discontinue the extant provision of an ex-gratia in lieu.

The Government has also advised the IBA to take appropriate action to circulate the scheme to all public sector banks for adoption with the approval of the respective boards.

MV Murali, Convenor of United Forum of Bank Unions (UFBU), said the compassionate appointments scheme was unilaterally withdrawn by the Indian Banks’ Association (IBA) a decade ago.

Since then the workmen unions and officers’ associations under the UFBU umbrella have been demanding its restoration.

A KEY DEMAND

UBFU had included the issue as one of the prime demands in the earlier wage revision. A decision had been hanging fire after the issue was escalated to the IBA platform as well as the Government.

In the meanwhile, individual banks had, at the instance of the IBA, introduced at random payment of ex-gratia lumpsum in lieu of compassionate appointment.

The issue was later taken to the as-yet inconclusive 10th bipartite talks with the IBA for wage settlement.

After prolonged discussions, the IBA had agreed to forward to the Government recommendations for restoration of the scheme on a par with the one available to Central Government employees.

This amounts to a modification of its earlier notification for payment of an ex-gratia lumpsum, Murali said.

Banking institute notifies common written exam for clerical posts in PSBs

HYDERABAD, AUG 12:  

The Institute of Banking Personnel Selection (IBPS) will conduct a common written examination (CWE) for recruitment of clerks in public sector banks other than the State Bank Group in December this year.

According to a notification for CWE Clerks - IV, online registration for the examination commenced on Tuesday and would continue up to September 1. The examination would be held in a phased manner during December 6-27, 2014.

The provisional allotment of successful candidates in line with the vacancies to be notified by the individual banks in due course would be made by April 2015. Further details could be obtained from the IBPS portal.

State Bank group to roll out cash recyclers across country

MUMBAI, AUGUST 12:  

State Bank of India and its five associate banks are planning to collectively install 4,300 cash recyclers, which will accept as well as dispense currency notes through replenishment and recycling of notes.

The bank and its associates will roll out these recyclers across the country by March-end 2015 as replacement for old ATMs or cash-dispensers that are seven years or more old.

Savings for banks

The advantage of such a move is that savings will accrue to the bank. Reason: the number of times the recyclers have to be replenished with cash will come down as customers will also be putting cash into it for instant credit to their accounts, said a senior bank official.

The risk of carrying daily earnings home for shopkeepers, traders, cabbies, and others will also be minimised.

Further, the bank could also reap the benefit of access to higher balances in a customer’s savings bank/ current account. To keep counterfeiters at bay, the cash recyclers will have the capability to back-track the depositor for all notes deposited or dispensed, with a record of the serial number of individual currency notes.

The recyclers, according to the bank’s request for proposal, will also have bunch note accepting and dispensing capabilities, with a minimum capacity of 200 notes at a time and accepting/ dispensing all rupee denominations — 50s, 100s, 500s and 1,000s.

The machine will be able to recognise the year of issue of the currency and can be configured in a way that while currency printed in or up to a certain year may be accepted (or rejected) by the machine, it may not be dispensed.

Fingerprint reader

For customers who are not tech-savvy and uncomfortable using a PIN for transactions, the cash recyclers will come with biometric authentication capability, with a fingerprint reader, according to Aadhaar specifications.

The cash recyclers will be enabled for operation by visually-challenged persons and for wheel-chair based operation by physically challenged persons.

In the last year (up to June-end 2014), the State Bank group has added 17,352 ATMs, taking their total number to 53,107.

Syndicate Bank fallout: FinMin may review PSB loan approval committees

MUMBAI, AUGUST 11:  

Following the Syndicate Bank bribery scandal, the committee approach to lending by public sector banks has come under a cloud and it is important that the Finance Ministry and the Reserve Bank of India take a hard look at it, say bankers.

A committee-based approach involves a group of senior officials coming together to sanction credit.

Fearing that their career prospects will be harmed, general managers on such committees are hesitant to take a firm stand against unbankable loan proposals, even if the bank chiefs back them.

The general managers worry that there will be a blot on their confidential records if they dissent on a loan proposal where the bank’s top echelon is interested.

The committee approach came into vogue a couple of years ago, after public sector bank top brass delayed credit decisions, given the ever-present shadow of the Central Vigilance Commission and the Central Bureau of Investigation.

To hasten decision-making

While the “collective responsibility” that came with the committee approach helped quicken the decision-making process, it also led to a spike in bad loans, said a senior public sector bank official.

“The Chairman and Managing Director exercises undue influence on members of the loan committee as he is the authority who can make or mar their careers by making favourable or adverse remarks in their confidential records,” he said.

When a loan goes bad, it is usually the lower-rung officers who are held accountable while the big fish (members of the loan committee) escape the net. Also, the members of loan committees are powerless as they cannot exercise veto power. Dissent, if any, has to be discussed and addressed to arrive at a consensus and decisions ought to be taken unanimously, the official added.

K Unnikrishnan, Deputy Chief Executive, Indian Banks’ Association, observed that it is difficult for a junior bank officer to stand up to a superior in the hierarchical system in public sector banks. To prevent malpractices in sanctioning of loans, there must be policy interventions and strengthening of governance structures, he said.

Deviation powers

To set right this situation, the Finance Ministry and the central bank should make all members, including the Chairman and Managing Director and Executive Directors, of loan committees at the central office responsible for their decisions, said the chief of a public sector bank.

The power to deviate from the loan policy should be well-defined and there should be a limit to the exercise of such powers, he said.