Bank Staff Prepares For Strike

CBI files cases against ex-AGM of Bank of Maharashtra, 16 others-Times of India

PUNE: The CBI has registered cases against a former assistant general manager of the Bank of Maharashtra (BoM) in Aurangabad and 16 others for causing a loss of Rs 55.93 crore to the bank.

In a statement issued here, the CBI said it filed the cases on the basis of a complaint received from the bank's Aurangabad zone against the AGM, 14 people who own private firms and two of the bank's panel valuers.

The CBI said in the statement that it has invoked section 120-B of Indian Penal Code read with Section 409 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.

Superintendent of police (CBI) Atul Fulele, who holds charge of the Pune and Mumbai zones, confirmed the development but refused to give details.

A source said the deputy general manager of the bank, Aurangabad zone, had lodged a complaint with the CBI, Pune, on January 7, after learning about the losses caused to the bank due to alleged connivance of the AGM, valuers and some clients.

In its complaint, the bank said that during 2012-2013, the then AGM of its Aurangabad zone had entered into a criminal conspiracy with the other accused and sanctioned credit facilities of Rs 5 crore (approximately) to each of the borrowers under the Loan Against Property scheme of the bank.

The complaint stated that in the first instance, the AGM, while sanctioning the facilities, had taken on record false valuation reports of the property which the borrowers mortgaged against credit that the bank extended. The bank's panel valuers had inflated the valuation of the property significantly, the complaint said. The borrowers misused the funds and also failed to repay the loan, causing the bank a loss of Rs 42.38 crore.

The complaint stated that in the other instance too, the AGM, during 2012-2013, had sanctioned credit facilities amounting to Rs 5 crore (approximately) to each private firm under the same Loan Against Property scheme of the bank, on the basis of inflated valuation by the bank's panel valuers. The loss the bank suffered due to misuse of and non-repayment by the borrowers of the loans under the facility amounted to Rs 13.55 crore, the complaint said.

The CBI said it conducted searches on 31 premises of the accused in Aurangabad and one place in Nashik in the first instance and on three premises of the accused in Aurangabad, four premises in Parbhani and one each in Beed and Nanded in the second.

The CBI has recovered incriminating documents and the hard discs of computers during the searches.

Chief information officer (CBI) Kanchan Prasad said the borrowers misappropriated the funds and did not repay, thereby causing losses to the bank. "Abusing his official position, the assistant general manager allegedly sanctioned credit of Rs 5 crore each to the borrowers under the 'loan against property scheme' against properties that were highly inflated by the panel valuers," Prasad said.

A senior management personnel of the Bank of Maharashtra declined to provide additional information, saying the CBI was investigating and it would not be appropriate to comment at this juncture.

The bank has, in a separate communication, said the senior management will meet the media on Friday to discuss the bank's financial results for the quarter ending December 31, 2014. A source in the bank said some additional information can come out during the press meet.

Couple dupes private bank of Rs. 16.15 cr.-The Hindu

A city-based industrialist and his wife have reportedly fled the country after duping Lakshmi Vilas Bank (LVB) of Rs. 16.15 crore.

 

The cheating came to light when Subba Rao M.V., branch manager of LVB, Koramangala, found that the couple stopped repaying the loan instalments from August 2014 and went underground in December 2014.

 

In his complaint, Mr. Rao said the accused, B.S. Padmanabhachar and his wife D. Bharathi, directors of Sujan Precision Components Pvt. Ltd. in Bommasandra Industrial Area, had availed of Rs 4.3 crore loan from the bank for business development. They deposited property documents of Divya Harish and Tambidorai as collateral surety.

Later, the couple applied for an additional loan of Rs. 17.5 crore in 2011, against a collateral surety of a property belonging to Varadhachar. In 2012, they obtained an additional loan of Rs. 2 crore on the pretext of buying property for the company.

 

After the repayments of loan instalments became irregular, the couple approached Mr. Rao and requested to grant them some time to pay since they had some financial difficulties. However, enquiries by bank officials revealed that the couple were running a finance firm and had duped their customers by taking their property documents, which they had used as collateral security against the loan, the police said.

 

Investigations so far have found that the couple had sold all their properties, including the house, and fled abroad with their children. “We have to get a lookout circular issued against them,” said a senior police officer

 

As bank staff prepare for next strike, will they also look at rising customer complaints?-First Post

 

Even as the bank employee unions continue to threaten to strike work to press their demands ranging from higher wages to reduced working hours, customer complaints due to unsatisfactory services in banks continue to be on the rise.

One-third of the customer complaints received by the banking ombudsman in 2013-14 were against state-run banks, followed by private banks and foreign banks, according to the annual report of the Reserve Bank of India (RBI) banking Ombudsman scheme.
State Bank of India (SBI) and the its subsidiaries, along with other nationalised banks received 32 percent of the customer complaints, while private banks received 22 percent, while 6.5 percent of the complaints foreign banks, the report showed.

Complaints pertaining to failure to meet commitment and non-observance of fair practices code, among others, constituted largest category of complaints (26.6 percent of complaints received). As much as 24.1 percent of the complaints were card-related, the report said.

Also, non-adherence to prescribed working hours, refusal to accept, or delay in accepting, payments towards taxes, refusal to issue /delay in issuing or failure to service, or delay in servicing or redemption of government securities, refusal to close or delay in closing of accounts too resulted in higher consumer complaints.

The RBI introduced the banking ombudsman scheme in 1995 to provide a forum to customers for resolution of their complaints relating to deficiency in banking services. Of the total complaints received during the year, banking ombudsmen disposed of 96 percent, the RBI said.

Meanwhile, bank employee unions have yet again threatened to strike work from 25 to 28 of this month after earlier discussions with Indian Banks' Association (IBA), the industry lobby of banks, collapsed on a range of issues, mainly on wage revision.

In a meeting earlier this month, the IBA had improved their offer of wage revision from 12.5 percent to 13 percent even as the trade unions continue to press for 19.5 percent hike.
Even at 12.5 percent, the burden of wage increase on PSU banks is an estimated Rs 4,000 crore, according to the IBA officials. The figure will rise to almost Rs 8,000 crore if arrears of pension and other perks are included. The IBA has said that banks won’t be able to offer wage revision beyond 13 percent since banks’ balance sheets are in poor shape.

Banks employees have also demanded a reduction in work hours in public sector banks to five days a week, but the finance ministry is understood to have turned down the proposal already.

The critical point here is that service standards in state-run banks, which control 70 percent of the industry, have continued to deteriorate and are lagging behind private and foreign banks over the years, prompting many customers to shift to private and foreign banks.

In the changing industry scenario, when the banking industry is set to witness high competition from a new set of differentiated banks, backed by strong business houses with deep pockets and advantage of technology, state-run banks would do well focussing on improving their service standards to clients. Otherwise they risk losing their market share.
Unions have somewhat lost steam in the recent years with the newly joined young officers and employees showing no active interest union activities, even though most of them religiously contribute to the monthly subscription fees.

Unions still manage to mobilise mass support from employees to carry out strike and bring banking services to a standstill.

Trade unions, while they are fully within their rights to demand higher wages, can simultaneously play a constructive role to sensitise their members on the need to pay attention to the customer, especially in the changing face of competition.
At the end of the day, if there is no customer, there is no bank and, for sure, no unions.