SOME OF THE QUESTIONS THAT WE COME ACROSS IN SOCIAL MEDIA FROM ACROSS THE COUNTRY. PENSIONERS ARE MOST AGGRIEVED CLASS IN BANKING SECTOR. THE MOST UNFORTUNATE SITUATION IS THAT THE UNIONS, WHICH THESE PENSIONERS PROSPERED & STRENGTHENED OR THE PENSION SCHEME FOR WHICH THEY FOUGHT & WON BY THEIR MIGHT, ARE NOT LISTENING. THIS WRITE UP IS A BIT LENGTHY, BUT READ WITH PATIENCE TO KNOW & UNDERSTAND PREVALENT GROUND REALTIES !
1. IS THERE ANY TERM OF PENSION REVISION IN BANK PENSION AGREEMENT/PENSION REGULATIONS?
NO is the stand of IBA & UFBU. In Pension Regulations (PR) there is no such specific term. At the same time, there is no 'denial term' as well. So, it's matter of interpretation, articulation and inference of Pension as concept, basic foundation drawn from, prevalent rules & practices followed by Central Civil Services Rules, RBI pension rules, verdicts of courts etc.
Formulation of Bank Pension Scheme has been derived from Central Civil Services Rules/ RBI Pension Rules, so in case any disputes arise in this regarding, due regard is to be taken of Central Civil Services Rules / RBI Pension Scheme. This is what has been expressed in very certain term under clause 56 of PR.
One step back, there is Pension Agreement dated 27.10.1993, under ID Act as basic & lawfully enforceable document on which PR was framed. However, while framing PR authorities blundered by omiting/committing 2/3 wrongs. First, that they didn't corporate Periodical Pension Revision clause, since the same was not in RBI scheme and Pension Agreement dated 27.10.1993 too says, it should be as in RBI, so it's quite clear that if it was not in RBI, it can't be in Bank Pension. Second, that in PR past service forfeiture clause in case of illegal strike was inserted. It was arbitrary and quite prejudicial to Pensioners and basically against the right to strike. Third, that the DA periodicity was agreed to be as in case of in- service employees, but in PR it was made half yearly as existed in Central Civil Services Pension Rules. However, Unions could be able to dilute second one, while first & third conditions remain the part of PR.
2. IF THERE IS NO SPECIFIC REVISION CLAUSE IN PR SHOULDN'T WE PRESS FOR PENSION REVISION?
One day Pension was out of imagination in Banking. None had any inkling of Pension. How it was conceptualized, fought & achieved, I need not to explain, as we all know. In PR, is there any clause as to give second option? Of course no. Then, how it has been achieved, that too I need not to explain, as we all know, how it became reality. In RBI Pension Scheme there was also no clause of Revision, but it is achieved. Here again, I need not to explain it, since we know the battle RBI working Unions waged, brought RBI governors on board, own legal battles and ultimately forced the Govt to clear Revision, of course under threat of direct action by Unions, only on this exclusive issue. It all proves, even without preconditions, Trade Unions created conditions for Demands and achieved them as well.
In Bank Pension Revision matter, Bankers don't deny Pension revision on 'no such clause' basis. 'No such clause' is Pensioners, Activists, Union Leaders articulation and invention, far away any strength, thus untenable. Bankers/IBA authorities are intelligent enough and understand intricacies, implications, infirmities etc in view of Pension Agreement, Regulations, basic foundations, principles of very Pension concept etc. Therefore, they didn't deny Pension Revision on ground of 'no such term & condition of Pension Revision' in Pension Agreement or Pension Regulations. They have been denying revision on 'unaffordability' ground, citing huge fund requirement, which Banks can't meeting as Banks are in financial difficulties. Even Central Govt, while denying Pension Revision of RBI, held in back same idea as permitting RBI Pension Revision would cause similar demand from other Banks who are these days in financial difficulties. That's the strategy they drawn from old proverb: putting the cart before the horse (गाड़ी के आगे काठ रखना).
Presently, Banks are reeling under Financial difficulties. As strategy, Bankers plea is, Pension Revision would need whooping additional fund of Rs.95000 crore. Financial difficulties are admitted fact, while Rs. 95000 crore theory is a ploy to push back Unions morally.
3. WHETHER 'FINANCIAL DIFFICULTIES' PLEA HOLDS ANY RELEVANCE IN PENSION REVISION MATTER?
Doesn't matter at all or say hardly matter! In discharge of statutory & operational liabilities, it's not relevant ground for Banks. Banks have to pay all operational expenses, wages, rents, interests to depositors, make provisioning etc. The financial difficulties can't withhold it all. Wage Revision is overdue. Has any Bank denied mandate of wage revision on financial difficulties? Has IBA refused to take up Charter of Demands, discuss or reach to settlement citing financial difficulties? Therefore, citing financial difficulties in Pension Revision matter is not only irrelevant, but obnoxious. Any dilly-dally on Unions parts amounts to double standard & dishonesty as well. How Unions can justify denial of Pension Revision on financial difficulty ground & at the same time justify their demands to Wage Revision & service conditions which shall have direct impact & bearing on financial health of banks?. Other side, Pension Revision has no such financial burden or impact on ailing Banks, since the Pensions are paid from the income of Pension Funds. Pension Funds have good cushion to bear the financial shocks, since Pension Funds are robust. However, Revision shall need some more additional funding, undoubtedly. That shouldn't be a problem, since Banks are under lawful obligations to make additional contributions, as laid down in PR. However, in case required additional contribution is huge & Banks feel burdensome to contribute in one year, this may be amortized and phased over 5 years. PR is a quid-pro-quo deal and employees & officers have had been complying with their requisite contributions during their service time. So, Banks can't turn their back from their corresponding obligations.
4. WHETHER PENSION FUNDS ARE BEING MAINTAINED ON REAL TIME BASIS?
No, I can say it with confidence on record basis. As per prudential norms & practices, EPF amounts are to be remitted to Pension Trust on salary day every month. As learned, now it is some where on quarterly basis and some where on half yearly basis. This is one irregularity that I have been pointing out for last three years and nobody disputed.
In Bank Karmchari Samvaad, monthly house Journal of UP Bank Employees Union, some 12 year back published a story, in which RBI found that 6/7 Banks didn't remit EPF dues to Pension Funds over Rs.20000 crore. Alone SBI dues was around Rs.8000/-. RBI had to grant them amortization to pay over next 5 years.
Banks were under impression that if they have to replenish the short falls in Pension Funds, they have implied right to take out the SURPLUSES in Pension Funds, if any. PNB & BOB attempted to transfer such surplus funds from their Pension Funds, which was objected to and being illegal, these banks had to retreat.
After these incidents, Banks started adopting the tricks as mentioned in first para of this question. Now banks withhold statutory monthly EPF for half year/ quarters and get PF examined by Actuaries and if short fall reported, the same is replenished. See, this modus operandi, how it harms regular fund inflow, investment and income cycle of Funds. This amounts to malpractice, if really it goes like this.
5. ARE PENSION FUNDS SAFE?
For sure, Pension Funds are safe. These Funds are managed by Irrevocable Trusts form under Indian Trust Act, 1882 by all Banks. It's irrevocable Trust and by law required to be regulated/ managed by Banks. Trusts are not allowed to park their funds in their own Banks. Investments are in permitted funds and securities. In case of fluctuations in income/ returns on securities etc the same is ward off by the provision of additional contributions to the extent of short falls reported by Actuaries as on 31st March every year from P&L account of Banks. Purposes of out go from Pension Funds are very specifically fixed and even if Banks collapse, Trust shall remain intact and unaffected. In nut shell, Pensioners have a reason to take sound sleep. See below the meaning of Irrevocable Trust, under Indian Trust Act, 1882:
"Irrevocable trust is a trust that cannot be modified or terminated without the permission of the beneficiary. In most states, a trust will be deemedirrevocable unless the grantor specifies otherwise. Once the grantor has transferred assets into thetrust, s/he has no rights of ownership to the assets and the trust."
6. WILL PENSION REVISION NEED ADDITIONAL FUND CONTRIBUTIONS?
Bankers present a gloomy picture of Pension Funds. At the same time, Pensioners' Unions & Activists hold a very rosy picture. Both sides are incorrect. Picture is neither gloomy nor that much rosy, but beautiful at present level. Bankers say, Pension Revision would need additional fund contribution to the tune of Rs.95000 crore. It's highly inflated figure. Recall, in second pension option time IBA presented inflated figure of Rs.26000/- crore, which later Actuaries reached to Rs.6000/-. I don't agree, IBA figure being correct. Just I want to state in simple way. Present annual Pension outgo is below Rs.16000/- crore. Pension Revision, take, may cause 25% average rise in outgo. So, after Revision Pension outgo may go up to Rs.20000/-. Here, I ignore the actual annual income that PFs generate annually on present Fund base. In case of Revision, thus such additional fund is required that may fetch an additional income of Rs.4000/-. It is without taking into account as to what are the present surpluses over Pension outgo of Rs.16000/- crore. At all if need be, some Rs.20000/25000 crore further invest in PFs may need. According to information PFs are generating returns around Rs.20000/-annually. If this is correct, no such contribution may be needed. Further, if additional funding is required, it can be amortized and paid in PFs in next 5 years. Bankers shouldn't forget that it's first time Revision ever since Pension Scheme came in operation. They have had saved a lot in past. Had the pension been revised, say after every Pay Commission Recommendations, it would have had undergone revision in 1996, 2006 & 2016.
I see very insignificant additional contribution that may be needed at all in Pension Revision. Very simple way out, not to put much financial burden on Banks-being in Financial difficulty, is to amortise contribution amount for 5 years. Further, in RBI, Pension Revision has been from prospective date, i. e. March, 2019, it may be same in other Banks. No chance of any fall out of past burden.
7. WHETHER GOVT CAN INTERVENE IN THIS REGARD & ORDER REVISION?
Understand, Pension Scheme is a bilateral issue between IBA- UFBU constituent Unions. Matter rests between them.
If they reach to no agreement, it may cause rise to dispute. Here, govt may intervene & mediate to iron out differences. Unions may resort to agitation that too can create a ground at various level for settlement. Look to, in RBI Revision issue was taken up by operating Unions, issue being bilateral, discussed and settlement reached with RBI management. The settlement was sent to government for concurrence, which later declined. It was challenged in Mumbai High Court.... This way things proceeded and ultimately RBI Union gave a call for 2 days mass casual leave. Governor again fall on their back and urged govt to review stating that 2 days casual leave action would be a blot & bad precedent on Central Bank. Govt. asked RBI Governor to manage 2 months time. Unions agreed to Governor appeal. After 2 months, Union reminded of two months time being over. Govt cleared Revision. I don't think, any such situation has come so far in our Banks Pension Revision matter.
8. WAS IT RIGHT TO CLUB PENSION SCHEME WITH WAGE NEGOTIATIONS?
Frankly speaking, according to me it has been wrong. Recall the history. Pension Demand was raised as exclusive issue, fought and achieved on different platform, totally delinked from Bipartite Settlement process of wages & service conditions. I say, it has been a tactical error. Wage revision itself was based on huge financial outgo. Clubbing Pension, in fact harmed Pension Scheme. First fall out was 1616/1684 agreement, that reduced Pension from 50% to about 41%.
Bipartite Settlement issues are based on concurrent expenditures. Pension is based on Pension Funds income. So, these are two different things, not one.
RBI didn't commit such mistake. They raised Pension Revision as exclusive Demand and concentrated their entire energy on it. They followed what late Com Prabhatkar prescribed about Pension Demand & movement. I don't know, why his successors plunged it in turmoil.
UFBU got a golden opportunity & time also to concentrate on it. IBA-UFBU signed a Joint Notes on 25.5.2015 about Pension. This Joint Notes was a golden opportunity after wages & service settlement. It constituted in writing a separate platform. UFBU has enough time, away from any other issues of wages & service conditions, to fight out Pension Revision. IBA mentioned very contentious points, as raising pointed fingers on contractual relationship of Pensioners with their respective banks. It was a big issue. A challenging task for Unions. Joint Notes agreed to examine Revision issue. UFBU never turned up to enquire even. See, same time how RBI Unions made their conserted efforts to chase RBI, Court, Govt. UFBU couldn't take a thread from RBI Unions' actions.
Clubbing Pension Revision with BS create a conflict of interest between in service and pensioners community. In service community least recognize the burning problems of pensioners. They are unsatisfied lot of their gains. So how would they appreciate that the financial load allocated for bipartite should be bartered with pensioner community. Revision is victim of such circumstances.
It's a blunder that wisemen committed, so no way out...
9. WHAT'S WAY OUT?
It's very hopeless situation. IBA has no mandate for Pension Revision. On mandate issue IBA stand is emphatically clear and tough, as seen in officers issue. Revision issue is in COD. No clarity among constituent Unions. So, just giving place in COD or making occasional and selective statement, I take it just a deceptive trick. They will one day wash their hands with Dettol, 100% Pure Handwash!
10. WHAT'S ABOUT GOVT INTENTION?
Basically, Govt rejected RBI Revision on premise that it would cause rise similar demand from other Banks which were then in financial difficulty. RBI had no financial difficulty. In Banks financial difficulties still persist.
However, official noting on RBI Pension Revision file, there is a mention of Pension Agreement dated 27.10.1993. It is said to be legally enforceable agreement. Why this is mentioned in RBI pension file, obviously for reason that in Agreement it is mentioned that all other terms and conditions including Pension Revision shall be as per RBI Pension Scheme. So, DFS mind has been clear that RBI Revision would result in similar demand in Bank Pension Scheme. Having noted it and accordingly RBI sanction can be read from positive angle. Provided, IBA- UFBU come together and agree to Revision.
Govt sanctioned OROP. Govt. cleared RBI Revision. In these two matters govt did as recommended by concerned authorities. In Bank Pension issue, if IBA-UFBU work out some understanding, it is very much sure, govt would consider.
11. WILL THE GOVT PRIVATISE PSBs?
Only a Government of fools can think in this regard to wash out it's hands from the ownership of fabulous wealth of 125 lakh crore. It's propaganda. Govt Stake can be brought down to 52% in existing rules. It is still at 80% on an average. Still about 18% dilution is possible. Secondly, in first 5 years this government infused huge fresh capital. It is more than what done in earlier 45 years. In current FY Rs.70000 crore is earmarked and apportioned to different Banks. Govt is solidly standing behind PSBs at a time when all banks have been bleeding profusely and plunged in net losses. As I said, it's malacious propaganda aimed at politics.
12. WHAT'S ABOUT CONSOLIDATION OF PSBs?
It's big step in right direction. This was cherished desire of late Com. Prabhatkar that PSBs must be consolidated in 5/6 Units. He was of firm opinion that nationalization can't be successful with old structure, management and pro-rich credit policies. So he didn't demand only restructuring and consolidation of PSBs, but waged war for it. He forcefully fought for credit policy. He achieved it. He forced govt to think about Consolidation. Govt appointed several committees and also merged New Bank of India in PNB. It sparked a storm that blown up whole consolidation idea and processes. A new set of trend developed under which now some or all Unions are opposing consolidation just for opposition sake. Banking fraternity take it as gimmick. Just leaders interests are the theme of this opposition. I don't know, who should be protected by employees & officers: leaders self interest or the interest of Banks which matters in material life of bank employees and nation..
Merger is propagated as Closure. Big Banks are said to be bane, not boon. I don't know the doctrine which some people apply. I take opposing consolidation itself is a retrogate step. Only 'ownership status' is core issue to be defended by bank employees and public. PSBs are the custodian of people's savings forming national wealth that can well be guarded under govt ownership. Simply more reforms are necessary to ward off loots and plunders as had happened during UPA 1 & 2 govt time. Had the PSBs been consolidated earlier, it couldn't have had been possible for Chidambaram to play, the way he did.
Consolidation is based on best business practices & strategies to acquire new heights. PSBs in fragmanted status were just wastage of precious national resources. Business world has changed to new operative tools that give greater economic viabilities. UTI failed, so came UTI Bank now Axis Bank. How it matters. LIC acquired IDBI since it has controlling investment. SBI absorbed its subsidiaries & Mahila Bank. BOB absorbed VB & DB. DB, VB people stands benefitted. SBI subsidiaries people stood benefitted. These are national enterprises, so how it matter? There were 196 RRBs. They all were in perenial losses since inception. They are consolidated now in 56. Barring one or two all are in profit. Now 56 are planned to be compressed in 35. It will give them more strength. Yes, leaders have problems, who were sitting on Union Funds. But, Union shall become so strong and powerful that I can't describe in words.
J. N. Shukla,
Prayagraj
12.9.2019
jagat.n.shukla@ gmail.com
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