Communication of RBONC to IBA
Saturday, 4 July, 2015 1:41 PM
From:
"R.K. Pathak" <ratnakarpathak@gmail.com>
Ref. No. RBONC/292/2015. July 03, 2015
The Chairman,
Indian Banks Association,
MUMBAI
Respected Sir,
SUB : Bank Retirees' Issues.
At the outset we thank you for considering one of the demands of the bank retirees as included in the Charter of Demands submitted by us i.e. Medical Insurance Scheme. We have been, time and again, requesting you to call the retiree organizations for a dialogue so that not only the issues pertaining to the bank retirees could be discussed but the grievances redressed.
The following, among others, are the major demands of the bank retirees which were also highlighted in the notice for strike calls given by the UFBU stressing for resumption of wage revision talks and for an immediate settlement. All the retiree organizations have supported the calls and participated in the programmes. since the issues pertaining to retirees are also included in the notice.
1 100% Neutralization of Dearness Relief.
2. Updation of pension.
3. Standardization of Family Pension.
4. Uniform Medical Reimbursement Scheme.
5. LFC for retiree and his/her spouse.
We may recall here the Joint Note dated 14-03-2010 signed between IBA and UFBU before signing IX Bipartite an excerpts reads as under:
"IMPROVEMENT IN PENSION SCHEME: We took up with IBA various improvements in Pension Scheme like periodical UPDATION OF PENSION
along with wage revision for serving employees, 100% DA Neutralisation to
all pensioners, common indexation of pension, increase in commutable
portion of pension, increase in pension for pensioners above age of 80,
covering CPF Optees who resigned etc. After discussion it has been
decided to submit a Memorandum on these issues to the IBA and the
Government and to be pursued further"
It is regrettable that neither IBA nor the UFBU have moved these issues to RBI and Government all these years in spite of continued approach time and again.
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All along we have been, under the banner of UFBRO akin to UFBU requesting to call the Representatives of retiree organizations - affiliates of UFBRO in the discussions and to involve them. It is worth mentioning here that the Representatives of IBA and Government have agreed to the suggestion of Dr. Sudrshan Nachiappan, then Chairman of Parliament Committee on Public Grievances to set up Grievances Cell at the Head Office of Banks headed by an executive not below the rank of a Deputy General Manager for which Government had also sent the communication to IBA to direct the Chief executives of the Banks. The Government have also directed to call the Representatives of Retiree Organizations by IBA periodically. It is unfortunate that IBA turned a deaf ear for the grievances of the bank retirees and allowed them to try their luck at the judiciary by spending whatever they got their retiral benefits while banks at the instruction of IBA and Government spend public money with no accountability as observed by a Bench comprising 3 judges of Supreme Court saying that they are not paying from their pocket. Therefore, we request you to spare some time and give us a slot in your busy schedules at the earliest.
We note that IBA and UFBU have signed the Wage Revision Settlement (X Bipartite) on the 25th May 2015 and also find that the Government has since accepted the settlement and permitted disbursement. But, it is unfortunate that though the Representatives of UFBU assured us to get the issues of the retirees resolved they have, unceremoniously signed (got signed?)a "Record Note of discussions on the issues and demands relating to retirees of the Banks" that reads in the first para "IBA maintained that any demand of retirees can be examined only as a welfare measure as contractual relationship does not exist between banks and retirees." We are surprised as to how a most learned man heading one of the progressive Nationalised Banks as well as holding a post of a Presiding Officer of an Association of comity of bankers both public and private can arrive at such a posture throwing all cannons of law into thin air to negate all claims of the bank retirees. A question is being posed as to what relationship exists between the retired Chairmen and retired Executive Directors and their family and the Banks/Government to get continued Medical Reimbursement Scheme and periodical revision of their pension. We are at a loss to understand the provision for getting these benefits after their demitting office after their tenure of appointment/employment. If there is one, does not the retirees too fall within the ambit of such a provision because the retired Chairman/Executive Director was a General Manager of a Bank drawing Pension under the same Employees'Pension Regulations 1995?
To say about "contractual relationship" we would like to bring to your kind attention that the services of employees/officers in public sector banks is "NOT a contractual relationship" but the moment one enters the service he becomes a "Government Employee" since the banks are owned by the Government. The appointment is under "statues" as they are governed by duly enacted legislations in "Bank's Service Regulations 1976", "Bank's Disciplinary & Appeal Regulations 1976", "Bank Employees' Pension Regulations 1995", "Reserve Bank of India Act" "Bank Nationalization Act 1970/1980", Constitution of India, etc. and upon introduction of pension they are also covered by "Civil Pension Rules of Govt. of India". If you have come to the conclusion that the service of bank employee/officer severed with retirement of whatever nature your attention is kindly invited to Regulations 42, 43, 44 and 45 in CHAPTER IX of Pension Regulations 1995. Further the officers are also treated as "Public Servants" and subjected to CVC and Prevention of Corruption Act, the sword hangs over their head even after retirement. Therefore, we strongly refute the term "Contractual relationship" used in the Draft Note and the retirees continue their relationship even after retirement as long as they get the pension even extends to the length of life of their spouses. What contract exists with the spouse of the pensioner when Bank is paying pension on the death of the pensioner?
A through study of Pension Regulations will reveal as to how the relationship extends beyond superannuation. One wonders as to how the Banks disburse pension to retirees? How IBA advises Banks periodical increase in the Dearness Relief if there is no relationship? Why
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Regulations stipulate to have yearly actuarial assessment and Regulation directs the Banks to provide sufficient funds? What relationship for the Family Member (Spouse)? Does Bank enter into any contract to pay Family Pension? How retirees are subjected to Disciplinary Action not only under Bank's Conduct and D & A Regulations but also under Pension Regulations (See Chapter IX) if there is no relationship? How IBA recommended and Government permitted Ex-Gratia to pre-1986 retirees? Is there any contract between the Banks and spouses of deceased pre-1986 retirees? Why Government has increased their ex-gratia payment?
As an eminent banker one must know about "contract" and nature of contracts. Every bankman knows about "void" "voidable" contracts. Any contract in violation of the statutes is void ab initio, one is fully aware. It is stated in Para 1 of the "Record Note" - "The periodic wage revision exercise based on mandate from member banks cover only wages and service conditions of serving employees." May we have a copy of the Mandate of banks directing IBA not to consider the demands and issues of the bank retirees or any authority to enter into an "Unholy" "Void" contract with UFBU. Under these circumstances the "Record Note" which is signed by IBA and
UFBU is "Void ab initio" and we do not agree for the contents thereof. Please also note that the General Body of RBONC (Triennial Conference) held at Vadodara on 11th June 2015 moved a resolution unanimously rejecting the "Record Note" and called upon IBA to scrap and withdraw it. We, therefore, request you to treat the said "Record Note" as withdrawn and cancelled as "VOID".
At the outset we are thankful for having considered our request for a uniform Medical/Hospitalization Reimbursement Scheme as extended to the in service employees/officers, subject however, to payment of premium on the Insurance Linked Scheme. Kindly recall that RBONC has been advocating such a scheme by giving three alternatives. We are pleased that IBA has called UFBU (as directed by Hon'ble High Court of Delhi in the writ petition - J. K. Sahwey Vs Union of India/IBA/Punjab National Bank - LPA 437/2010 DB Delhi HC - and adopted insurance linked scheme out of the three. In this regard we have suggested to take out a MASTER POLICY covering all in service employees, their family members and retirees and their spouses through a single Insurance Company so that not only the banks but also the retirees/spouses are benefitted. (kindly refer our letter No.RBONC/252/2015 dated 22-06-2015 addressed to Sri M. V. Tanksale, CEO, IBA).
In the "Draft Note" the IBA has given their response to the issues/demands of the bank retirees and we would like to offer our comments thereto as under.
a) A revised hospitalization/medical expenses reimbursement scheme - We have given our detailed suggestions in our letter No.RBONC/252/2015 dated 22-06-2015 addressed to Sri M. V. Tanksale, CEO, IBA and we request you to kindly consider the same in the best interest of the member banks in general and bank retirees and their spouses in particular. A start has been given under PMJDY and PMSY under which the master policy covers crores of people whereas in our case it will be around 60 - 62 lakhs including retirees/spouses.
b) Leave Fare Concession - You must be aware that employees are over burdened with work for per employee business is around 28 - 30 crores on the one hand but they hardly complete the work within the banking hours. The staff shortage is another reason and they are not in a position of avail the leave and that is the reason for the demand for increasing the quantum so that atleast they are benefitted by way of encashment of accumulated leave at the time of retirement. Under these compulsions they are not in a position to avail the LFC during their service. Our demand is "LFC for once after retirement" that too only for retiree and his/her spouse anywhere in India. They may be permitted to travel by "Economy Class in Air Travel". This will cost about 2 months pension and will be affordable. Please see that this is acceded to.
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c) Revision in the rates of Family Pension - The question of affordability does not arise here since the Pension Regulations are drafted on the pattern of RBI Pension Regulations based on Civil Pension Rules. When it is said that it is on the lines of RBI Scheme, the RBI had already recommended for the change and the Government had accepted. Necessary amendments to RBI Pension Regulations have been effected and Government having accepted have gazetted the same. This change of flat 30% family pension applies to bank retirees mutatis mutandis.
d) Extending Dearness Relief at 100% to all pre-November 2002 pensioners - At the first place we would like to know whether a feasibility report has been obtained while extending this 100% neutralization to retirees post 01-11-2002 when signing VIII Bipartite Settlement. If not, how the affordability of the banks was determined in the absence? What is the additional burden to the Banks on account of implementing 100% neutralization to post November 2002 retirees? This benefit automatically devolved to the retirees post-November 2012. Whether IBA has had any statistics on the additional burden to the Banks?
The response of IBA reads "Firstly, the matter is sub-judice as certain cases on this issue are pending for decision with Supreme Court. As such, IBA cannot take a decision on this issue at this stage." You are aware that that are not one but many High Courts all over ruled that this has to be extended to pre-November 2002 retirees quoting the Supreme Court decision of a Constitutional Bench comprising 5 eminent judges of the Apex Court headed by Hon'ble Justice Y V Chandrachud in the case of D. S.Nakara Vs Union of India. It is SLPs filed IBA as one of the parties and Apex Court has not restrained IBA from implementing the issue and it is not necessary for IBA to wait for the outcome of the said cases since the decision will be in favour of the retirees because it will be on the basis of Constitutional Rights enshrined under Article 14 and 16 of Constitution of India. "Where there is a will - there is a way" is the proverb and when IBA has already settled the issues in the past though certain cases were pending at different courts this issue can also be considered.
It further adds "From a humanitarian point of view, IBA may examine". We are rather surprised with this narration as Bank Retirees are "NOT BEGGARS" but asserted our right of "Equal Treatment for a Group as a Whole" enshrined in the Constitution which has been upheld by various courts all over the country. It is unfortunate that Executives of IBA do not find reasons though they honoured the decision of Apex Court on the matter of "Extending 2nd Option to SVRS Retirees".
Talking about "Humanitarian point of view" we wonder why this was not thought of while filing SLP at Apex Court against favourable orders of High Courts? Why "Humanitarian point of view" is not shown to withdraw the SLP and extend the benefit of 100% neutralization of DR instead of saying "sub-judice"? Where was "Humanitarian point of view" while denying 2nd option for retirees under SVRS/VRS/CRS/Resignees? When "Humanitarian point of view" will dawn to arrive at the feasibility despite court orders? Who has to remind to get "Humanitarion point of view" to have a detailed costing exercise?
We hope "Humanitarian point of view" will arise soon and this benefit will be extended immediately and by withdrawing all the pending cases on this issue.
e) Updating the Basic Pension of all the pensioners and uniform index of 4440 points.
We would like to invite your kind attention to the original agreement dated 29-10-1993 between IBA and UFBU in the matter of extending pension scheme to bank retirees wherein it was agreed to extend "Updation" also among others. It was agreed to have the exercise within a period of 30 days. In view of failure on the parties to the agreement to pursue these matters and upon establishment of Retirees Organizations in the Banks as well as National Confederation this was taken up by these organizations with IBA as well as UFBU. Therefore, a joint agreement has been
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signed on 14-03-2010. We hope IBA will come out with the cost implication for introduction of the scheme if not from 1993 atleast prospectively from 01-11-2012 as has been done by Government who implemented as from 01-01-2006 to their employees. We will touch the feasibility aspect later part of these submissions.
f) Updation of pension for all existing pensioners and family pensioners.
We are glad that IBA, though belatedly, agreed with the suggestion of UFBU to collect the details of the pensioners and ascertaining the actual cost in order to work out a solution. Instead of parring the question IBA should have collected the informations, additional cost involved in funding the Pension Fund etc. before coming to the conclusion that it involves huge additional cost. IBA has not quantified the amount needed to say huge additional funding is required.
We would like to invite your attention to Regulation 11 of Pension Regulations 1995 and it is mandatory for the Banks to cause an investigation by an Actuary into the financial condition of the Fund every financial year on the 31st March and the Bank shall make such additional annual contributions to the Fund as may be required to secure payment of the benefits under the Regulations. These reports are available with the Banks for the past 20 years and from the said reports the figures could have easily been gathered. It is also not out of place we mention the extract of Section 10(7) of Bank Nationalization Act - ACT 5 of 1970/89 reading:
"Sec. 10(7) - Closure of accounts and disposal of profits.
After making provisions for bad and doubtful debts, depreciation of
assets, contribution to staff and superannuation funds and all other
matters for which provision is necessary under any law or which
usually provided for by Banking Companies, a corresponding new
Bank shall transfer the balance of profit to the Central Government."
Therefore it is mandatory for the Banks to provide contribution to staff superannuation funds (Note - it is funds - i.e. Gratuity Fund, Provident Fund, Pension Fund etc) out of the profit before the balance is transferred to Central Government. But Banks are transferring the balance of profit without providing for superannuation funds of the retirees like 100% neutralization, updation, family pension, etc.
g) Periodical updation/improvement in pension ... ... on the lines of Central Government.
We once again stress here that the Pension Scheme in Banks is the replica of RBI Pension Scheme and Central Civil Services Rules 1972 or Central Civil Services (Commutation of Pension) Rules,1981 as applicable to Central Government Employees (Reg. 56 of Pension Regulations, 1995). Updation of pension was implemented by Central Government on the recommendation of V Central Pay Commission as from 01-01-2006 though the Government was functioning since centuries. As mentioned above it was agreed in the original pension agreement dated 29-09-1993 and by a Joint Agreement with IBA and UFBU as per agreement dated 14-03-2010 cited above. Even in the case of Central Government employees it was introduced for the first time since 2006.
Your response in this regard as narrated in the said Record Note is not acceptable to us and we reject the same as baseless. The Banks are expected to honour the mandatory provisions of the statutes and they cannot (in this case IBA as authorised by them) violate by entering into a "VOID" agreement detrimental to the interests of the bank retirees. Here again without any statistics on hand IBA cannot come to the conclusion that this will have serious impact on working of the banks. This will be explained infra.
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h) Uniform percentage of allocation from Welfare Fund towards schemes pertaining to retirees.
In this regard we request you to issue necessary guidelines to all the banks to involve the Retiree Organizations in the meetings concerning distribution of funds towards in service and retiree employees.
Feasibility for funding the Pension Fund to meet the demands/issues of bank retirees.
In the absence of any facts and figures having produced before the table it is not correct to assume that this will have serious impact on the working of banks. The Banks, in terms of Section 10(7) of Bank Nationalization Act - ACT 5 of 1970/80 are required to make provision for superannuation funds and are expected to transfer the balance of profits to the Central Government. Another mandatory obligation you will find in Reg. 11 of Employees' Pension Regulations 1995 that stipulates - reading: The Bank shall ... ... ... and make such additional annual contribution to the Fund as may be required to secure payment of benefits under these regulations." The Banks continued to violate these statutory provisions and denied the retirees the benefits all along.
For your kind information the Banks have transferred a total dividend of Rs.6,757.22 crores including State Bank of India as dividend for 2013-14 to Government. This amount is pittance in the face of total Budget amount of around Rs.7,00,000,0000000 crores of Central Government.
We feel, on a rough calculation, the additional burden on account of implementation of four demands of retirees may not exceed 10% of the above i.e. Rs.675 crores i.e. 25-30 crores per bank. The total profits of banks for the year 2012-13 is Rs.1,02,927 crores and for the year 2013-14 is Rs.96,289 crores. The reduction is by additional provision to NPA as per norms of RBI. Further, this profit is after writing off for bad debts to the tune of around Rs.31,000 crores and apart from that amount provided for towards NPA and Restructured accounts to the tune of around Rs.42,000 crores. Perhaps, the additional burden will not be more than 1% of Rs.73,000 crores.
It is to be borne in mind that as from 01-04-2010 in the industry New Pension Scheme has been introduced on the on hand and number of pensioners under the present scheme dwindles gradually on the other.
Against this backdrop it cannot be said the banks will go bankrupt if the demands and the issues of the retirees are acceded to and implemented. We once again stress here that it shall be considered in view of the fact that these benefits are extended to RBI employees and Central Government employees and the relevant provisions which are applicable to bank retirees also mutatis mutandis legally.
Lastly, we have been assured by UFBU Representatives that retirees' demands/issues will be resolved and agreement reached before X Bipartite Settlement is signed. We fail to understand the circumstances as to how all the experienced and learned leaders of 9 constituents signed the "Record Note" on dotted lines to negate the aspiration of the bank retirees who depended for a fruitful negotiation.
However, we gather from the responses of IBA that it expressed "humanitarian point of view" and open to consider upon collecting the details of the pensioners and ascertaining the actual cost and arrive at a solution.
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We, therefore, of the firm view that Chairman, IBA will go through these submissions and call the Representatives of National Retirees Organizations - Retired Bank Officers' National Confederation (RBONC), All India Bank Retirees Federation (AIBRF) and All India Bank Pensioners and Retirees Confederation (AIBPARC) for discussions on the demands and other minor grievances pertaining to retirees.
We await early response.
Yours sincerely
R. D. Deshpande,
GENERAL SECRETARY
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