Government Warns Bank Staff

Dear friends,

The Government has fired an another salvo which has shattered the very existence of the public sector banks.
Both Gyan sangams have outlined the plans of the Govt. to finish the PSBs by explicitly declaring the closure of the Banks which are not meeting the Industry’s average Return on Assets, and Return on equity, by not making the dear capital available for the survival of such Banks.
While we are blinking to brave the Govt. decisions, now they fired a salvo holding the employees responsible for such a failure.
The Govt. directs the trade unions to sign a tripartite agreement as a precondition to infuse the capital with an inbuilt threat to close down the bank otherwise.
This is the first time they announced that there would be an embargo on the perks and benefits to the employees which would be restored on turning the business in to profit.

It is also indicated that there would be a cut in the existing benefits too.

Kindly go through the following news item appeared in the Business Line yesterday.

1. The government has asked 10 public sector banks (PSB) to curtail employee benefits, including industry-standard pay hikes, if these want to receive any capital.

2. The Centre wants these banks to sign a memorandum of understanding (MoU) with the employees’ unions to get a commitment on this. If the unions agree, benefits such as leave travel concessions and perks could go for a few years till the banks returned to health.

3. All three Kolkata-based banks — United Bank of India, UCO Bank and Allahabad Bank — have got this diktat.

4. The letter has also gone to Indian Overseas Bank, Vijaya Bank, Bank of India, Central Bank of India, Andhra Bank, Bank of Maharashtra and Dena Bank.

5. These banks had asked for capital from the government, some as little as Rs 500 crore. But the government is acting tough, as these have a huge bad-asset problem and their profits are dwindling.

6. According to sources, the letter said capital allocation would be linked with quarterly measurable milestones on which all related parties — banks’ board of directors, management and employees — must commit.

7. Support in the form of capital would require a tripartite MoU between the government, the PSB concerned and its employees. The MoU would be a commitment to an agreement for a time-bound plan, starting with the financial year 2017-18. It would be monitored quarterly.

8. Temporary restructuring of employee benefits would be done only based on need. Any reduction or suspension in benefits could be reversed if the bank concerned successfully managed turnaround operations, said sources.

9. Senior bankers in some of these institutions confirmed they had received such a letter.

10. Sources said SBI Capital Markets, the investment banking arm of the State Bank of India (SBI), has been asked to advise on the terms of the MoU.

11. According to a senior union leader, they would explore the option of going on strikes if they were not satisfied with the terms of the MoU.

12. C H Venkatachalam, general secretary, All India Bank Employees’ Association, said employees were ready to cooperate for the effective turnaround of banks.

13. However, unions and employees would not tolerate a vendetta or harassment. Banks have to be empowered to ensure effective recovery from defaulters, especially corporate borrowers, through legal means.

14. “The government wants the banks to sign the MoU with the unions to restrict economic benefits of employees. This is probably the government’s way of saying the employees of these banks deserve to be punished,” said a source.

15. Bank unions might find hurdles to their agitation plans. The P J Nayak committee has already suggested privatisation of PSBs.

16. Union Finance Minister Arun Jaitley has expressed a desire to start privatisation with IDBI Bank. Besides, the government in July 2016 said it would capitalise only 13 banks, out of the 19 it owned, based on performance.

It would be inferred from the above that

The trade unions are driven to a corner to take an ultimate decision on their survival in the respective Banks, because there is an explicit threat to close the Bank.

But it is atrocious to put the entire blame on the workforce and trade unions for the present condition of Indian Public sector Banks, while the fact remains otherwise that the failure of the PSBs, if at all to be framed so, is primarily due to the deliberate attempt of the Government and controllers to undermine the performance of the public sector Banks.

Thus it is a high time we the AINBOF - the body constituted to protect the interest of the PSBs, to stipulate counter conditions to be followed by the GOVERNMENT and our CONTROLLERS.

If any situation arise to affix our stamp on the tripartite agreement, initial option is to refuse and if it is inevitable our nod will be there on accepting the following terms by the Govt. and controllers.

1. Banks shall not be placed under undue pressure to amend their MCLR matching to any change in Policy rate and Banks are to be freed to fix their MCLR as it has to be the reflex of the Asset, Liability of the Individual Banks, but, not to the market sentiments, as the the interest collection constitutes 70% of the total income of any Bank.

2. SLR and CRR cut to be decided bank wise in consultation with the respective banks and it shall be based on the Asset, Liability position of the individual banks.

3. Interest shall be given to CRR at least to match the Savings bank interest.

4. No advances need to be granted at ROI lesser than MCLR including DIR.

5. Provisioning and prudential norms shall be revisited & reworked and shall be  arrived in relation to Indian politico, socio and economic condition.

6. Income tax shall be levied on the net profit but not on the operating profit.

7. No provision on standard assets.

8. Till all the banks are attaining the total turnaround, any dividend on the Government stake shall be retained as reserve.

9. Tightening the Recovery procedures, the rules and acts related to Recovery which would discourage any defaulter to go scot free.

10. Strengthening Recovery act, Revenue Recovery act, SARFEASI act. Etc.,

11. Release the wilful defaulters list.

12. Barring any defaulter to hold public office.

13. Closure and relocation of the branches shall be vested with the Individual Banks.

14. No Government schemes shall be thrusted on the Banks and achieving the priority sector targets shall be decided by the respective banks suiting to their geographical locations and financial strength.

15. All the incidental expenses incurred in implementing the Govt. Schemes shall be reimbursed by the Government.

16. Unclaimed deposits shall be added to general reserve or income after the statutory period.

17. Any major policy decision affecting the Bank’s finance need to be viewed from the angle of “ Loss to the public exchequer”. E.g: Mining policy, Capital,Imports policy and public - private partnership

18. Capital infusion shall be decided on business and presence than on the basis ROA & ROE which are the prime indicators of profit which is subjected to various provisioning.

19. Government business and resources shall be restricted to the Public sector Banks only.

20. Existing vigilance arrangement which is proved to be a deterrent to take a prudent credit decisions shall be reviewed and restructured.

21. A common Accountability policy shall be finalised which would act as a tool to erase the fear psychosis in the minds of the Bank officers and would be a morale booster to take bonafide credit decisions which always posses an inherent risk.

22. National appellate tribunal to be set up to hear the aggrieved  Bankers manned by the Personnels from the Judiciary.

23. There shall be centralised Employees grievances cell at IBA level to deal with the employees related personnel issues.

24. Directors representing the officers and employees shall be appointed to the bank boards immediately.

25. No MD and ED shall be appointed from the private Banks.

26. Status quo in the shareholding pattern in the PSBs and no dilution of the Govt. Holdings.

27. No merger or closure among the PSBs.

28. Wage revision shall be on the principles of CPC formula and shall not be linked to profit and paying capacity.

29. There should be strict regulations and monitoring by the controllers on the payment & small banks’ functioning and their business decisions including  the pricing of their resources.

30. Uniform perks, allowances and benefits to all the officers in the PSBs.

Friends,
It is an ultimate warning to the structured and organised trade union movement of the officers of the Public sector banks.
Let's not be cowed down and will utilise the opportunity to display our unity and commitment by consolidating the entire officers force who are youthful and dedicated to the survival of the Public sector.

AINBOF ZINDABAD
AIBOC ZINDABAD

MANIMARAN G V
GENERAL SECRETARY
AINBOF

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Copy of news is submitted below

The government has asked 10 public sector banks (PSBs) to curtail employee benefits, including industry-standard pay hikes, if these want to receive any capital. The Centre wants these banks to sign a memorandum of understanding (MoU) with the employees’ unions to get a commitment on this

http://wap.business-standard.com/article/finance/govt-asks-10-banks-to-cut-staff-benefits-for-capital-117031800778_1.html