Management of our great bank-"PNB", known for indulging into unnecessary litigation paving way to miscarriage of justice has put following notice on its website.
By this Notice our Bank has denied appointment to those candidates belonging to "Jat" community who had applied for appointment in pursuance of Notification issued by Government of India and mentioned in advertisement of IBPS and after being declared successful, they have been allocated PNB.
Now a basic question arises as to what mistake has been committed by these candidates for being deprived from appointment? The Notification referred in the Notice has been issued by Government of India, IBPS acted on Notification, Candidates applied on the basis of information given in advertisement, they obtained requisite marks in written test for being declared successful and they cleared interview for being eligible for allocation of Bank for appointment and joining the duties. It is worth mentioning that IBPS allocated banks to candidates of "Jat" Community in April, i.e. after the Judgement dated 17.03.2015 by Hon'ble Supreme Court Of India. Why and how these candidates must be punished for acts of Government of India and IBPS ?
Then another question which arises is as to how vacancies which were to be filled through appointment of candidates from "Jat" community would now be filled ? It is manifest that IBPS allots Banks on the basis of requisition/demand made by particular bank. For example if our bank demanded 500 officers and out of 500 candidates to whom PNB has been allotted, 25 belongs to "Jat Community". How these 25 vacancies would now be filled?
We consider this notice as unilateral, arbitrary, unjust and in utter violation of rules of natural justice. In our considered opinion, candidates from "Jat" community who have been allotted our Bank after completion of process of selection can't and shouldn't be penalised for mistake or fault committed by Government of India.
We urgently need information on appointments made in pursuance of gazette Notification vide which "Jat" community was included in common central list of other backward classes not only from banks but in other departments also. Can any one provide information on appointments made after 04.03.2014 in which members of Jat Community were given appointment on posts reserved for other backward classes? Please provide information urgently.
Further we invite suggestions on grounds for challenging this notice of our bank.
Click On following Links to read more about corruption in recruitment and promotion in public sector banks
http://danendrajain.blogspot.in/2014/06/honesty-in-examination-recruitment.html
http://jaindanendra.blogspot.in/2014/10/corruption-in-promotion-process-in-ps.html
http://jaindanendra.blogspot.in/2014/09/why-public-sector-banks-are-sick.html
http://importantbankingnews2.blogspot.in/2015/01/corruption-in-recruitment-promotion.html
How to deal with corrupt bosses of state-owned banks-LiveMint
The official reason behind the growth in bad loans is a faltering economy but everyone knows there is more to it
BY Tamal BandyopadhyayNow you know why the pile of bad loans in India’s state-owned banks has been rising and why both the banking regulator as well as the finance ministry are upset with many bank chiefs.
The official reason behind the growth in bad loans is a faltering economy but everyone knows there is more to it.
Yes, there are bank chiefs who are dishonest. They give loans to those who don’t deserve them and make money cutting such deals. They make money but their banks pay the price. The Reserve Bank of India (RBI) is well aware of this practice. So is the finance ministry. But they don’t openly talk about it as that may shatter public confidence in our banking system, some 70% of which is accounted for by state-owned banks.
On Saturday, the Central Bureau of Investigation (CBI) arrested Sudhir Kumar Jain, chairman and managing director of Syndicate Bank Ltd, for allegedly taking a Rs.50 lakh bribe. His brother-in-laws are allegedly involved in the mechanics of the pay-off.
Jain, who took charge as chief of Syndicate Bank in July 2013, was allegedly offered the bribe for increasing the credit limit of a few companies, throwing banking norms to the wind. A commerce graduate and a chartered accountant, Jain started his banking career in June 1987 in Dena Bank.
There aren’t too many instances of public sector bank CEOs being arrested by CBI, but CEOs stepping down before the end of tenure or being sacked are no novelty. More on them later but let’s first try to understand the modus operandi.
One way of making money is to give loans to a creditor who does not deserve it. The second popular way is giving loans at a price which is lower than what it should have been.
In both cases, the deal maker pockets a certain portion of the load value (could be a few basis points for big ticket loans or even a few percentage points for small loans). The third way of money making is restructuring a weak loan account and giving breathing time to a rogue borrower. I am aware of a former chief of a large public sector bank whose wife used to cut such deals.
In banking lexicon, such deals are called an accommodation, but all such transactions do not necessarily need to involve money. Often a bank chief indulges in such a deal under the influence of politicians in power to ensure a smooth future. And many public sector bankers entertain politicians from their days as general manager, because this helps them climb the greasy pole and become chairman of the bank.
Many appointments of public sector bank chiefs are such quid-pro-quo deals. The favour is returned in the form of loan sanctions and other accommodations.
Last year CBI arrested Shyamal Acharya, a deputy managing director of State Bank of India, the country’s largest lender, for allegedly taking a bribe in kind—an Omega and a Rolex watch worth Rs.7.75 lakh each. Both the watches were seized from Acharya’s cabin by CBI.
Allegedly, Acharya violated norms for a loan approval. The State Bank of India (SBI) instituted a two-member internal panel to look into the allegation but could not find any procedural lapses in a Rs.75-crore loan sanctioned to Delhi-based Worlds Window Group (WWG).
CBI had filed a case against Acharya, K.K. Kumra, who was an adviser at WWG, and Piyoosh Goyal, founder, WWG. Apparently, Goyal had sought a Rs.400 crore loan from the bank and Kumra, a former bank official, in turn got in touch with Acharya, who allegedly influenced his juniors and got Rs.75 crore sanctioned to begin with.
CBI conducted simultaneous raids at various locations including offices and residences of Acharya, Kumra and Goyal and Rs.7 lakh in cash was found in Acharya’s residence. Many bank insiders say Acharya was “framed”.
In 2013, the finance ministry sought an explanation from Corporation Bank chairman and managing director Ramnath Pradeep on charges against him by the Central Vigilance Commission (CVC) over alleged violation of norms. Pradeep faced eight key charges that include sanctioning loans to a few companies in contravention of regulations, extending a big-ticket loan to a tower construction company that had already defaulted on payments to another state-controlled bank, and changing rules in a bid to appoint a consultant at the bank.
I am not aware of the latest development of this case.
CBI in late 2011 had arrested eight senior officials belonging to nationalized banks and financial institutions for allegedly accepting inducements to issue loans to vested parties or leak vital information from their top committees in the so-called loans-to-bribe scam. They were later released on bail.
There have been many instances when a bank chief’s tenure has been cut short by the government for alleged irregularities. For instance, S.C. Basu of Bank of Maharashtra Ltd could not complete his full term in 2006. Ditto N.S. Gujral of Punjab and Sind Bank in Delhi. Chairperson and managing director of United Bank of India Archana Bhargava too has recently settled for a shorter tenure, citing health reasons. Other bankers say there was something more to it behind her exit but nobody has spoken about corruption.
When it comes to being discredited, none can beat the record of former Indian Bank chairman and managing director M. Gopalakrishnan. He was sentenced to one year’s rigorous imprisonment by a CBI court for allegedly causing a loss of Rs.31.75 crore by granting loans without proper security between 1992 and 1996. He was found guilty by the court of conspiracy, criminal breach of trust, misconduct and cheating under various provisions of the Indian Penal Code and Prevention of Corruption Act.
How does one make all bankers, who are custodian of public money, honest and incorruptible? And, how to punish a corrupt one?
One way could be offering them a respectable salary. Currently they earn a pathetic pay packet. Take a look at the chief of State Bank of India who handles a balance sheet of Rs.22 trillion. (I am in no way suggesting that the State Bank chief is corrupt.) And compare it with the chief of any private sector bank who oversees a balance sheet which is one-fifth of the size of State Bank or even smaller. Yes indeed, the State Bank chief lives in a big bunglow in Mumbai’s posh Malabar Hills but that doesn’t add to the salary.
To start with, if the government decides to monetize all benefits that a public sector bank chief earns, their salary will be many times more. Open up the sector; pick up competent people from the market, give the CEOs more money, keep them happy, and put them under 24X7 surveillance. If they are caught taking money, punish them. They are playing with public’s trust, and deserve exemplary punishment.
Can Modi get rid of corruption in public sector banks?-Rediff
Link Rediff
Public sector banks are inefficient, poorly governed and beset by largescale corruption, says Debashis Basu.
Narendra Modi's many passionate election speeches last year and earlier this year were punctuated by a very colourful expression.
"Send me to Delhi as your chowkidar and I will protect your wealth," he claimed. This was accompanied by another colourful expression: "Na khata hoon, na khane deta hoon" (I neither make money, nor do I allow others to make money).
We hope that at some stage Mr Modi starts applying these two of his many pre-election promises where they matter the most: government-owned banks.
Public-sector banks (PSBs) dominate the Indian financial sector. They hold the bulk of people's savings. They are the main source of loans to small businesses and large projects alike. They are vehicles for his ambitious Jan Dhan Yojana. They are also inefficient, poorly governed and beset by largescale corruption.
In May, the All India Bank Employees Association (AIBEA) assessed wilful defaults worth Rs 70,300 crore in 400 PSB loan accounts.
They also estimated that over the past seven years, there were fresh bad loans worth Rs 4.95 lakh crore in the PSBs - while during the same period, these banks wrote off bad debts worth Rs 1.4 lakh crore.
Gross non-performing assets (NPAs) and bad loans in these banks had increased more than three times to Rs 1.64 lakh crore on March 31, 2013, from Rs 39,000 crore on March 31, 2008.
Thousands of crores of write-offs are happening without accountability. Spectacular defaults such as Deccan Chronicle and Kingfisher Airlines have led to no action against defaulters or against the senior bank officials and chairmen who allowed the loans to go far beyond enforceable collateral.
This is a huge scandal, which should get the chowkidar worried, because the reasons for such massive bad loans and write-offs are deep-seated. Forget about maximum governance, even minimum governance in missing in the PSBs. And has been for decades.
In the 1970s, the government used the PSBs to mainly fund its various socially oriented loan schemes and public-sector projects, which often left a big hole in the banks' books.
Throughout this period, private-sector companies also relied on government-owned banks and financial institutions for loans. Since the lenders insisted that promoters bring in substantial amounts of cash, borrowers would inflate the cost project and siphon off the money.
Therefore, contrary to all prudent norms, projects were more than fully funded by government banks, with most promoters having no skin in the game. Naturally, many projects turned sick while the promoters enriched themselves. Bankruptcy laws were weak. Nothing could curb the corrupt nexus between PSBs and their defaulting borrowers. When such poor lending weakened the banks, the government would step in and "recapitalise" them for the game to continue.
From the mid-1990s, amid the euphoria of economic liberalisation, Indian businesses expanded their capacities rapidly with the help of loans from PSBs and so the inherent weakness of the government banking system got magnified manifold. By 2001-2002, bad loans had reached an alarming 13 per cent of advances.
After 30 years of unaccountable lending, banks started complaining that they need tougher laws to enforce collaterals. In response, the government created the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi) of 2002, designed to help banks in the recovery of bad loans.
One of the key provisions of the Act is for banks to be able to auction the assets of defaulting borrowers. But notice that even after getting a tougher law, banks have not been able to claw back much money from Vijay Mallya of Kingfisher or the Reddy brothers of Deccan Chronicle.
The answer is obvious: bank officials have lent money without adequate collateral, as part of their nexus with promoters. Yet neither the Reserve Bank of India (RBI) nor the finance ministry is questioning the officials or directors involved.
Indeed State Bank of India (SBI) Chairman Arundhati Bhattacharya, in an interview with the Financial Times last week, has called for a shake-up in the regulatory system and asked for tougher rules for defaulters, as well as "a proper bankruptcy law to help get orderly resolution of [bad] assets".
That is a smokescreen. Working with the same set of laws, ICICI Bank, Axis Bank and HDFC Bank have negligible bad loans. Why? The real issue is corruption in various forms, starting with how bank chairmen are appointed.
Appointment of PSB chairmen is an elaborate process. It starts with intense lobbying by various senior bankers. Finance-ministry bureaucrats play favourites. Selection is often influenced by quid pro quo - a promise to be pliant and sanction certain loans that are bound to go bad. The RBI usually rubber-stamps this selection process.
Who will go after a chairman when he enjoys the ministry of finance's support and the RBI is hands-off?
Mr Modi has repeatedly talked about governance. The first step in governance of PSBs is to fix responsibility on their top brass for loans that have turned bad. Right now, accountability in the PSBs is a black hole despite the fact that banks have stringent credit-appraisal process.
Small businesses complain of onerous conditions imposed by banks before loans are sanctioned. Often banks arm-twist borrowers to buy some expensive insurance as an unwritten precondition.
And yet loans worth tens of thousands of crores have gone bad - something that should happen only in exceptional situation, such as a natural disaster. A loan such as that of Kingfisher goes progressively bad, not overnight.
What were banks doing at each stage that Vijay Mallya's collateral was falling short? Would they extend the same courtesy to a small borrower?
The fact is, borrowers have repeatedly siphoned off money from the banking system in connivance with bankers, no matter what kind of regulatory system and process we have had.
The previous prime ministers did not claim to be chowkidars. Mr Modi has. For the first time in 45 years, can taxpayers hope that accountability in the PSBs will be fixed?
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