PAD circular no.271 dated 09-06-2015 issued.
Arrear for the period 01-11-2012 to 31-05-2015 will be paid through HRMS with June'15 salary.
New Basic Pay updated in HRMS.
TAHIR ALI...
N.C.B.E..
30 Important Points Before You Take Charge Of Bank Branch Or Seat-
(Source: Facebook)
With fast retirements come fast promotions. These days scale I to II or II to III service period is reduced to 2 years in many banks. In such a short span of time youngsters don’t get much exposure and in many cases officers spend their 2-3 years in one seat only. In many worst cases which I know new officers spend 1-2 years in cash. When they get promoted they face many issues either handling the branch or a particular seat. Officers fear to take charge of loans seat as they don’t have that much a exposure their seniors who took 5-7 years to take a single promotion. Managers or officers become personally liable for any lapses of previous incumbent if they don’t report the matter in their joining report or in initial stages of their charge. Now here I present you your rescue points which you should take while taking charge or handling any particular seat. All officers must read this article from point to point as you may face problems later in your career. 30 important points before you take charge of bank branch or seat -
1) Security items – the very first thing you should check is security items register. Check all Cheque books, FDRs, Demand Drafts. This security must tally with your system reports.
2) Cash balances- physical cash is another important item. Ideally you should check opening cash. Also check ATM cash or any bait money.
3) Check GLB Slip – the first thing you should ask whenever you enter a new branch is GLB slip. Check it head to head. You can easily figure out some discrepancies from GLB itself and ask the present incumbent. You can easily check sundry entries, Remittances, DNR, suspense entries etc.
4) Check loan files – checking all loan files is not possible. At least check previous one year loan files. Check outgoing incumbent has signed all the loan files. You don’t need to see files before that as inspection/ audit must have taken place before that and auditors or inspectors must have audited files earlier. Meticulously check securities attached like LIC policies , FDRs, bonds, original land registry papers etc. also check that sanction letter are dully signed by the incumbent.
5) Check gold coins/ ornaments- gold coins must be check and gold ornaments of the customers must be checked with joint custodians and another staff officer.
6) All keys of the branch – keys of strong room, cash safe, main gate, grill, ATM room or any other safe present in the branch should be checked without fail.
7) Duplicate Keys- sealed Duplicate keys of the branch which is generally present in another branch should be checked thoroughly and any discrepancy should be reported.
8) furniture & fixture- furniture and fixture of the branch should be checked and must tally with GLB also check the depreciation register. Depreciation and reserve must tally with the GLB slip. Also take a broader look at items listed in F&F are present in the branch.
9) FDRs opened but not printed- take a note of FDRs that are opened but not printed. Make sure you got them signed by the outgoing incumbent.
10) TDS challans properly filled- take a look at quarterly TDS challans. Check whether they are filled or not as income tax deptt imposes interest on non filling. There’re last dated for filling quarterly TDS challans.
11) KYC compliance – make sure that all accounts are KYC compiled. Most banks offer non KYC reports in the system. Take out that report and make all the Non KYC accounts KYC complied before taking charge.
12) Registers to be checked- most of the banks have many important registers in the branch check whether they are maintained or not –
a) Complaint register.
b) MDP register.
c) No dues register.
d) OBC register.
e) Voucher register.
f) Cash Register.
g) Sundry Register.
h) ATM register.
g) Furniture & Fixture Register.
h) Depreciation register.
g) Inventory movement register.
h) Key movement register.
i) NPA register.
j) Recovery Register
k) Stock Register.
l) Loan security items register.
m) Office order register.
n) Insurance register.
o) Nomination register.
p) 15G-15H register.
q) Title Deed register.
13) NPA status- NPA accounts and written off accounts status should be reported in joining report.
14) Pending credit proposals- pending credit proposals must be taken note of. And action should be initiated at the earliest. If proposals are large then meeting with parties is also a good idea.
15) Claims with CGTMSE- any claims pending with CGTMSE must be noted and necessary follow up should be started.
16) SARFAESI status- any account in which SARFAESI has been initiatedshould be noted and status of sace sould be noted.
17) Temporary OD running – All temporary OD must be adjusted within time period of incumbent. Report should be generated of TODs and necessary action should be taken.
18) Expired Documents – take out report of all expired documents during the period of outgoing incumbent and effort should be made to renew all the expired documents before taking the charge.
19) Customer complaints – all pending customer complaints must be attended with utmost priority and outgoing incumbent should be asked to resolve the complaints which were generated during his tenure.
20) Branch security items- all items related to branch security must be assessed like fire equipments, burglar alarms, license of arm guard, CCTV etc.
21) Vigilance/ Inspection reports- you should check the latest inspection/ vigilance report and check whether proper reply/ comments of outgoing incumbent has been taken or not. Check whether queries of inspection report have been removed or not.
22) Examining last 3-4 months sanctions minutely- last 3-4 months sanctions are to be examined minutely or say very carefully.
23) Check whether registration of equitable mortgage with CERSAI/ revenue authorities has been done or not by the outgoing incumbent.
24) Sometimes Insurance Register is not updated and assets charged to the bank, whether as principal security or as collateral, are not insured for “FULL VALUE”.
25) For larger amount loans say above Rs. 10 lacs check whether Ist stage vetting and second stage vetting is done or not. If not then get it done.
26) Bank guarantee issued are duly signed by two officials jointly, one of whom must be the Branch Manager and Manager or Branch Manager and Second Man.
27) Certified copy of the title deed offered as security is obtained from the Sub-registrar office and the same is compared with the original documents deposited for creating mortgage, by the bank lawyer/ bank officials
28) A register is maintained at the branch, wherein the date of receipt, sanction/rejection/disbursement with reasons therefore, etc. are recorded. The register is made available to all inspecting agencies.
29) CIBIL exercise is being done in loans and advances of Rs 1 lac and above. Direct report from CIBIL is being generated and CIBIL detection and updating checking is being conducted.
30) Checking and signing of all the reports generated by the system, particularly, the Exceptional reports, day book, long book and reporting of deviations.
Though I have tried to cover each and every aspect before someone take charge of a branch or seat but still suggestions of experienced folks are appreciated and may guide newly appointed branch in charges.
RBI debt recast norms: Banks will be left holding the bag if they fail to find buyers for cos-First Post
The Reserve Bank of India (RBI) has permitted banks to take control of 51 percent of stake in a company that has failed to recover financial health even after a period of financial restructuring, typically due to management inefficiency or other factors.
This provision, part of the strategic debt restructuring exercise (SDR), is aimed at ensuring promoters of defaulted companies have more ‘skin in the game’. The RBI’s move is part of a coordinated action plan with markets regulator, Securities and exchange board of India (Sebi), which in March had allowed banks to convert part or full debt of listed defaulter companies into equity.
Both the RBI and Sebi have made the process easier for banks and become aggressive in taking control of defaulter companies. The RBI has said banks do not need to make provisions (money that is required to be set aside on high-risk perceived capital) since the exercise will not be treated as financial restructuring. Sebi too has relaxed the regular rules that will apply when acquiring significant stake in firms such as an open offer to minority shareholders.
Theoretically, the new rule, if it comes with correct pricing for equity conversion for banks, will enable lenders to push a takeover of a firm or exit at a better price. For companies too, this will offer relief since they will be free from interest payments once the debt is converted into equity. However, such a relief might come at the cost of losing management control.
But the critical point is that can banks manage to pull off a fast sale of the asset. Typically, there aren’t many suitors for a loss-making asset. The process often takes years. The fact is that banks have been pushed to take the SDR route as the company has failed to revive even after a period of, say six months or one year, of financial restructuring process, such as reduced loan rates and moratorium on repayment.
At this stage, the value of the underlying asset and brand value would have deteriorated substantially. Banks are, in effect, left with a bagful of skeletons - non-performing assets. Although banks get ownership control, they aren’t in the business of running companies, nor do they have the sector expertise to handle businesses. Until the time banks are unable to find a buyer, equity conversion wouldn’t do much help to banks to recover their bad loans.
Most of the NPAs, restructured assets on the books of banks, are in the infrastructure, manufacturing segments. Many of these firms, with high debt on their books have seen their share prices crash over years, resulting in significant erosion in their market caps. In some cases, bank debt is much higher than the market cap. Take the case of grounded Kingfisher airlines and many other debt-ridden companies, where share value has plunged making some of them penny stocks. Hence selling shares in the market wouldn’t yield much in return.
The reason for stress in the balance sheets of companies typically occurs due to external factors, delays in projects and slowing demand, in turn, severely impact their cash flows. Not many buyers will be interested in acquiring these firms, which means their future continues to remain uncertain.
Also, given the past experience, in the event of a take over of management control and transfer of ownership, banks are dragged to court rooms by the existing promoters and the fight goes on for years and even the skeletons disappear.
Having said that, in a country, where there are no bankruptcy laws, such a provision is indeed a useful step for banks, if they can push for a faster sale of the firm. Some bankers are hopeful that ability to convert debt into equity would help, provided the pricing is correct. Indian banks are sitting on a massive bad debt pile.
In recent years, the proportion of stressed assets has gone up substantially in the backdrop of a prolonged slowdown in the economy, absence of fresh investments and lack of reforms pertaining to land acquisition and availability of natural resources. There are two channels for banks to recast loans - under the corporate debt restructuring facility (CDR) and through bilateral loan recasts.
The bottomline: Equity conversion may not do much help in actual recovery of money unless banks manage to pull off a quick sale of the distressed assets, which is difficult in normal scenario. Before converting the debt into equity ownership, they need to a keep a buyer ready, besides preparing themselves for a watertight case in the court room. Else, equity conversion wouldn’t help much.
http://www.firstpost.com/business/rbi-debt-recast-norms-banks-will-left-holding-bag-fail-find-buyers-cos-2286086.html
My Observation: Dated 7th June 2015 Are Produced below
Bad debts or stressed assets or None Performing Assets , all are more or less same and they are all responsible for continuous downfall in profit and shrinkage in profitability , erosion in capital and they all add injury to sickness of banks. There are many internal reasons which cause creation and accumulation of bad assets. There are external reasons like political exploitation and shortcomings of remedial measures through legal recourse and administrative hurdles in smooth and timely recovery of dues from defaulters. There may be adverse affects on repayment culture due to high interest rate or loan waiver culture announced by politicians for vote purposes. There may be many more other reasons in the eyes of regulators or from the point of view of Chiefs of banks.
Whatsoever may be the reason behind growing sickness in PSBs, it is dead sure that health of public sector banks has been consistently deteriorating despite claim of Government and RBI that health of bank is improving or likely to improve from next quarter.
Manmohan Singh, former Prime Minister used to say every now and then that price rise will be contained in forthcoming quarters or government banks will be strengthened by infusing additional capital to improve the health of public sector banks. But he undoubtedly failed to do any thing good for betterment of PSBs and to ensure that further deterioration does not take place. He along with all his Finance Ministers got success in passing his tenure as Prime Minister of India. PSBs continued to face one after other impediments in containing sickness due to stressed assets.
Deterioration may stop only if banks are able to stop at least addition of fresh slippages and are able to improve the quality of lending and are able to alter and modify the dirty intention of politicians behind change in policies and quality of human resource .
On the one hand present government is talking of cleanliness in bank , talking of full autonomy and absolute operational freedom to banks and promising non interference in internal affairs of public banks, on the other they are fuelling the fire by imposing one after other non-banking workloads to already declared sick banks and thus contributing fresh damage to asset quality. Banks may earn few crores in insurance activities or may earn blessings of Modi by devoting full energy in execution of social welfare programmes of the government, but they are likely to loss many more times of income by causing standard assets to turn substandard assts.
I however feel pleasure that at least Reserve Bank of India and present government has at least publicly understood the gravity of risk due to ever rising bad debts in bank's books and risk inherent in hiding bad debts. They have understood well the bad impact of culture of window dressing in business, evergreening of loans to contain slippages to NPA, restructuring of bad loans to hide bad loans , the culture of loan waiver schemes and finally the bad ways and means used to achieve imposed target by clever bankers.
Government of India and RBI has taken some steps during last one year to improve health of ailing banks. Capital infusion has been linked to performance of banks. Provisioning on restructured loans has been increased, Process of recruitment of top officials like ED and CMD is getting new direction to stop corruption. All these measure may have short term benefits , but they have potential to add new wounds on sick banks. For example if weak banks are not given help of capital infusion , they will have to keep their interest rate high and they will lose business in the hands of stronger banks. Weak bank will thus grow weakness and face the risk of closure due to Basle norms. Similarly delay in posting of ED and CMD of banks may cause addition of fresh problems. Posting of officers from private banks as Head of PSBs may have greater repercussion down the line in a bank.
I welcome new steps taken by RBI to contain bad debts and to empower banks to acquire 51 % equity of chronic defaulters. It will have a deterrent effect on defaulting companies. It will have a positive impact on companies which are doing well and which are loyal borrowers of banks. But mere becoming owner of 51% equity of a defaulting company , banks will not be able to recover the bad money to a great extent. It is to be kept in mind that Ratio of capital in books of a company is microscopically small. A company with equity of Rs.10 crore only can get the loan of hundreds and thousands of crore of rupees from banks. Similarly premium on equity in stock market will also extinguish as soon as the news of taking over of 50% stake by lending bank goes into market. Further , as soon as bank become owner of 50% equity of a company , it is duty bound to take care of company's health, formulate plan for growth , stop leakage of income and improve operational capacity which banks will not be able to dream of in near future.
I am however happy that present government is not dead as previous government was dead . Current government under the leadership of Mr. Narendra Modi has done a lot of positive work and actively engaged in doing more and more to improve the intrinsic value of PSBs. Hundreds of projects which were languishing in corridors of government departments in search of statutory clearances or licenses have now got green signal and they can now at least go for erection of plant , start operation or think of expansion of their project. Companies which took loan for setting up a plant were paying interest but not able to their expansion work .Companies will no longer face the risk of escalation in project cost if all departments under GOI start functioning well. I hope Mr. Modi will give a real boost to banks in near future.
Real transformation and real reformation in banks will take place only by striking at the root of Human Resource in banks, administrative and legal set up. GOI will have to stop promotion, transfers and recruitment based on flattery and bribery. They will have to give value to seniors and respect experienced officers. Motivation in rank and file in banks will only help bank management in containing risk and in curing disease for good and for ever. Banks were better managed during seventies and eighties compared to what they are doing in the name of merit , in the name of reformation and in the name of freedom.
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