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Friday, March 16, 2018

Option of Pension to Compulsory Retired Staff

(Regd No.No.6601 under the trade union Act)
D-1/1, Sector –C, Scheme 71,Near Kasara Bazar School, Indore-452009
     Ref:2018/025                                                     Date : 16.03.2018

    The Office Bearers/ C.C. Members/State Body Chiefs, AIBRF.
   Dear Comrades,
   Re: Pension Option to the Compulsorily Retired  Employees
   We are happy to inform you that IBA has sent advice to member banks to      offer pension option to the compulsorily retired employees in terms of the settlement of 2010.

2. As you know ,  AIBRF has been making all efforts for this important issue for long time and has raised the issue before IBA officials  time and again. It is matter of pride for all of us that organisational efforts have yielded positive results. 1277 compulsorily retired employees on all India basis will be benefited.

3. Arrears from 2010 for pension along with commuted amount will be paid against recovery of PF Contribution of the bank plus 56 per cent towards interest as per provisions of the settlement.

4. All affiliates are requested to get in touch with the  eligible retirees / bank management to ensure the implementation of IBA circular smoothly  which is being sent to member banks.

5. We convey our thanks to IBA officials/ UFBU leadership for extending all cooperation for resolution of this long pending issue.

6. We all congratulate all our office bearers/ central committee members/ affiliates and activists and membership at large for continuous struggle for retiree issues under the banner of AIBRF. Now you can see that your struggle has started bringing positive results for retirees.

7. As you know some time back we could resolve issue of notional service benefit to specialist officers under Regulation 26.

8. We expect IBA circular on payment of arrear under Index 1616-1684 in terms of Supreme Court decision  to those who retired between 1998 to 2002. We shall inform you as soon as IBA circular is issued for implementation of the court judgement.

9. Decision on 100 per cent DA is round the corner and we expect it to be positive  for retirees.
10 With the above developments the major issues for which we have to continue our struggle are as under
   ( a ) Improvement in family pension ( b) Updation of pension for retirees
( C ) Pension option to resignees
    11. We are confident that we shall be able to resolve these important  issues also in near future with the support of all of you.
But at the same time you should be in readiness for further struggle as and when  needed.
S C Jain

Indian Banks' Association
March 16, 2018
Chief Executives of Member Banks which are parties to the Bipartite Settlement
Dear Sir/Madam,
2 nd Option of Pension for Compulsorily Retired Officers/Employees
The United Forum of Bank Unions (UFBU) representing workmen and officers in Banks were requesting to allow another option to those who were in the service of the Banks prior to 29th September, 1995 in case of Nationalized Banks / 26th March, 1996 in case of Associate Banks of State Bank of India and continued in service on or after that date and did not opt for pension when offered as per the scheme.
2. After holding various rounds of discussions in the matter, consensus was arrived at between the parties and a Bipartite Settlement/Joint Note was signed on 27.4.2010 to extend another option of pension to those Workmen / Officers who : 
(a) were in the service of the Bank prior to 29th September, 1995 in case of the Nationalised Banks/26th March, 1996 in case of Associate Banks of State Bank of India and continue in service of the Bank on the date of signing above mentioned Bipartite Settlement/Joint Note; (b) exercise an option in writing within 60 days from the date of offer, to become a member of the Pension Fund and
( c) authorise the Trust of the Provident Fund of the Bank to transfer the entire contribution of the Bank along with interest accrued thereon to the credit of the Pension Fund. In addition, the individual employee/officer has to pay @ 2.8 times of the revised pay for the month of November 2007.
(d) were in service of the Bank prior to 29th September 1995 in case of Nationalised Banks/26th March 1996 in case of Associate Banks of State Bank of India and retired after that date and prior to the date of above mentioned Bipartite Settlement/Joint Note i.e. 27.04.2010;
(e ) exercise an option in writing within 60 days from the date of offer to become a member of the pension fund and,
(f) refund within 30days after expiry of the said period of 60days, the entire amount of the Bank's contribution to the Provident Fund and interest accrued thereon received by the employee/officer on retirement together with the payment over and above the said amount at 56% of the amount.
. . . 2

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Indian Banks' Association CONTINUATION SHEET
3. Families of above mentioned employees / officers were also made eligible for said option subject to refund of Bank's contribution to the Provident Fund received by them as mentioned in point (f) above.
4. 2nd option of Pension was, however, not made available to the employees/officers who  were compulsorily retired by the Bank. As such, some of these aggrieved employees/officers approached different Hon'ble High Courts seeking relief in the matter. Various Hon'ble High Courts viz Andhra, Madras, Madhya Pradesh, Punjab & Haryana and Patna have ruled in favour of the employees/officers who were compulsorily retired. However Hon'ble Delhi   High Court has taken a contrary view on the technical ground.
5. The matter was placed before the Standing Committee on HR of IBA in its meeting held on
07.12.2017. After deliberations, the committee recommended to place the matter before the Managing Committee of IBA. Accordingly, the matter was put up to the Managing Committee of IBA in its meeting held on 29.12.2017. The committee advised to seek legal opinion on the judgements as to whether 2nd option of pension may be allowed to all exofficers/ex-employees who were compulsorily retired from Bank's service between 29.09.1995 to 27.04.2010 or only selectively to those who approached the Bank for the same.
6. The legal opinion from Shri S.D. Kelkar, Senior Partner, Kelkar & Associates whose services have been engaged in IBA as retainer, was obtained in the matter. His opinion is as under:
"Having considered the decisions rendered by the Hon 'ble High Courts ofAndhra Pradesh, Madras, Madhya Pradesh, Punjab & Haryana, Patna which have ruled in favour of the employees/officers who were compulsorily retired by way ofpunishment on the ground that they are covered by the Joint Note as well as decision ofthe Hon 'ble Delhi High Court which has taken a contrary view on the technical ground and the fact that SLPs preferred against the judgments of the High Courts which had ruled infavour of the employees were dismissed, though such dismissal cannot be considered as law laid down by the SC, we are of the considered view that the banks are bound to give 2 option to all the employees/ officers who were compulsorily retired and who fall within the ambit of the Joint Note to exercise 2 option for the following reasons:-
  The Joint Note does not distinguish between voluntary retirement, superannuation, premature retirement, compulsory retirement.
  Even the employees/ officers who are compulsorily retired by way ofpunishment are eligible for pension under the pension regulations.
  Banks being "State " within the ambit ofArticle 12 of the Constitution ofIndia should act in a fair and reasonable manner and should not restrict it only those who demand it. Such stand, ifany, adopted by the banks may invite stricturesfrom the Courts.
Indian Banks' Association CONTINUATION SHEET
7. The views of the Legal Retainer of IBA were placed before the Managing Committee of IBA in its meeting held on 25.01.2018. The committee after deliberation concurred with the legal opinion placed before it and advised to inform all PSBs accordingly. The exact modus operandi of the extension of 2nd option to compulsorily retired employees/officers was to be worked out in discussions with GMs (HR) of PSBs to decide on a uniform methodology. which will stand scrutiny of court.
8. To work out the methodology in this regard, a meeting of the GMs (HR) was convened on 28.02.2018 at IBA. After detailed discussions, a consensus has been arrived at to extend the option of pension to compulsorily retired employees/officers on same terms & conditions as are mentioned in Bipartite Settlement/Joint Note dated 27.04.2010. As per the agreed terms & conditions of said Bipartite Settlement/Joint Note, Pension/Family Pension shall be payable with effect from 27th November, 2009, provided that employees/officers who are compulsorily retired after that date shall get pension from the respective dates of such retirement. Court cases, if any, in the matter may be withdrawn forthwith.
9. Please do the needful accordingly.
Yours faithfully,
 j Kumar
Deputy Chief Executive

Recently a good friend of mine turned 60. I asked him what is changing. He sent me the following lines.
Days slip into weeks,
Weeks turn into months and
Months transform into years.
Calendars are changing and so am I.

Yes, I am changing.
*After loving my parents, my siblings, my spouse, my children, my friends, now I have started loving myself.*

Yes, I am changing.
*I just realised that I am not “Atlas” & the world does not rest on my shoulders.*

Yes, I am changing.
*I now stopped bargaining with poor vegetables & fruits vendors. After all, a few rupees more is not going to burn a hole in my pocket but it might help the poor fellow save for his daughter’s school fees.*

Yes, I am changing.
*I pay the autowalla / cabbie & walk away without waiting for the change. The extra money might bring a smile on his face. After all he is toiling much harder for a living than me.*

Yes, I am changing.
*I stopped telling the elderly that they have already narrated that story many times. After  all, the story makes them walk down the memory lane and relive the past.*

Yes, I am changing.
*I have learn not to correct people even when I know they are wrong. After all, the onus of making everyone perfect is not on me. Peace is more precious than perfection.*

Yes, I am changing.
*I give compliments freely & generously. After all its a mood enhancer not only for the recipient, but also for me*.

Yes, I am changing.
*I have learnt not to bother about a crease on my shirt or a spot on my skirt. After all, personality speaks louder than appearances*.

Yes, I am changing.
*I walk  away from people who don't value me. After all, they might not know my worth, but I do*.

Yes, I am changing.
*I remain cool when someone plays dirty politics to outrun me in the rat race. After all, I am not a rat and neither am I in any race*.

Yes, I am changing.
*I am learning not to be embarrassed by my emotions. After all, it's my emotions that make me human.*

Yes, I am changing.
*I have learnt that its better to drop the ego than to break a relationship. After all, my ego will keep me aloof whereas with relationships I will never be alone*.

Yes, I am changing.
*I demand for whatever is due to me. After all, accepting injustice is almost as bad as doing injustice*.

Yes, I am changing. *I've learnt to live each day as if it were the last. After all, it might be the last* .

Yes, I am changing.
*I am doing what makes me happy. After all, I am responsible for my happiness, and I owe it to me.*


Wednesday, March 7, 2018

Write Off Bad Loans Why?

Loans worth Rs 81,683 crore were written-off by public sector banks (PSBs) in 2016-17, Finance Minister Arun Jaitley said  in the Rajya Sabha.In a written reply, Jaitley said that writing-off of loans is done for tax benefit as well as capital optimisation and borrowers of such loans continue to be liable for repayment.

It is misleading to say or to admit that banks write off bad loan accounts only for cleaning books or for tax benefits or for maintaining adequate captal ratio. In fact bank officers seldom care for recovery in such accounts.There may be some exceptions to it .They however take credit for natural inflow in such accounts and get awarded .Culture of writing off bad loan is fatal and undoubtedly will spoil banks further. There may be exceptionally few loans which really deserve to be written off but not all. 

It is also true that borrowers do not fear legal action . They know the art of managing police and judiciary. As such cases filed by banks for recovery of dues from defaulting borrowers languishes in courts of law for years and decades. In such pathetic position, bank staff are not given much value at the time when they demand  or go for realisation of overdues from bank loan defaulters. 

Bitter truth is that bank officers ask for their money back from defaulting  borrowers as if they are ask for alms as beggars. Thus culture is also gifted to them by politicians who ruled this country for decades simply to enjoy power and earn money through illegal ways and means.

It has become an established  culture in banks particularly  in Public Sector Banks first to lend money blindly and then write off them after few years.

A few officer really take care of safety of fund at the time of sanction of loans and then monitor such accounts honestly, sincerely and regularly to protect bank's  interest . But majority of bank officers lend money for the sake of lending  or for earning some illegal gifts either in cash or in kind.

In general , officers give less focus on regular recovery in loan accounts and more focus on achieving targets. Such officers find place in good book of top officials and quicker jump in career. Top officials in general focus on quantity and  not quality of loans given by branch officials.  They give value to an officer in promotion of an officer not based on his or her skill in lending  but how much value they receive from juniors.

On the other hand officers who are real well wishers and protectors of banks find place in bad books of top officials and they are assigned the duty of recovery  of money from bad borrowers who were financed by officers placed in good book .Such officer seldom get timely promotion . They are rather tortured and humiliated at all levels.

 In brief yesmen officers are engaged in evil works and it is they who commit sins and finally bad book officers are punished for failing to recover money from bad and recalcitrant  bad borrowers. Flattery and bribery are two tools for brightening career as well as for becoming  wealthy person.

Obviously  culture of lending in general in almost all PSU banks is defective and leading to rise in non performing assets and then culture of writing them off without fixing responsibilities  on evil doers add fuel to fire. Every year billions of rupees are written off or sacrificed by banks in the name of cleaning of books . In fact this exercise is done to protect bad officials and bad borrowers. More than five lakh crores of rupees in  bank loans written off or waived by banks or by governments. About ten lakh crores of rupees are locked in declared bad debts called as Non Performing  Assets. Much more is still hidden in the system.

In general top officials are exonerated  and awarded for their bad lending and juniors are made scapegoat for evil acts of seniors. It happens so because top officials build verbal and telephonic pressure  on juniors for giving loans to bad persons and companies. They do not leave behind any sign on their indulgence  in evil work.

It is entirely wrong and misleading  to say that bank officers make effort for recovery in written off accounts. In fact they do not care for recovery even in normal and standard loan accounts or NPA accounts.  They depend on officers from administrative offices so far as recovery in bad accounts is concerned.

There are of course some good borrowers who repay the dues in time and it is their contribution that  some recovery flow in. Otherwise in most of banks,  value of money lost in written off accounts is always more than actual recoveries received in in bad accounts. In brief it is "Bhagwan Bharose Banking".

If some recovery comes in , credit goes to bank staff and if not, blame goes to God, like natural calamities, higher bank interest, economic recession, government  policies etc.

It is worthwhile  to mention here that government of the past is also responsible  for prevailing evil culture in banks in process of lending and in conducting loan melas, in target oriented lending, in hiding bad debts, in restructuring  bad loans again and again, in evergreening  of loans and in finally writing off bad loan accounts or sacrificing  money in compromise settlement  with bad borrowers. Culture of loan mela  and waiver of loans are gifts to bankers given by none other than  past rulers of this country.

During government  of congress party , they never helped bankers in recovery of money from wilful  defaulters, neither through administrative or police help  nor through legal action in court of law. It is they who promoted culture of reckless loaning and  then waiver of loans.  Bank officers gradually got addicted to this culture. Wine woman and wealth  became necessary items for some of top bankers and this culture inherited from other government  departments and percolated down the level. 
Window dressing in all business parameters at all levels is well accepted culture.

Present government  has done commendable job in Nirav Modi case and sent a good message in all nook and corners.  Still they have to do a lot to change the evil culture at all levels.There are thousands of Nirav Modi like bad borrowers hidden in banking system.  There are many black sheep in banks too. There are evil politicians and media men who do not understand intricacies of banking but ready to put hurdles in path of good GOVERNANCE. Snakes are sitting in all corners of the country to bite Narendra Midi like rulers.

Government led by Modi and finance minister like Arun JAITLEY have broken bees nest and opened Pandora's box. Banks are full of worms . Ten lakh bank employees are facing anger of common men due to evil work of hardly 10 thousand bankers.

GOI has to weed out those bad officers from the system and punish them in such a way that in future bank officer cannot dare play with banks money .A clear cut message will go down the line only if top officials of the banks who are at the root of all malady are punished quickly and severely.

GOI will have to make their administrative wing , regulating agencies, auditing team, inspecting team, vigilence team, judiciary and all connected officials active, effective, honest and fast. Putting inefficient  persons or corrupt persons at such post have yo produce grave and devastating consequences. 

And last but not the least, Government will have to restrain and regulate politicians who are advocating  for sanction of loans or for waiver of loans for serving their self and political agenda.  

GOI will have to penalise severely all those who  directly or indirectly contributed in damaging banks  and causing loss to taxpayers money and jeopardizing public deposits. Any softness with evil doers will give adverse outcome.  Please for God sake, save banks from devils. If needed, even retired officers should be taken to task.

GDP depends largely on bank credit and bank credit grows with fruitful results only if quality of lending and quality of workforce is given more importance than flattery and bribery or  volume of credit offtake..

Risk and reward has to be assessed properly and judiciously.  Appraisal system for bank staff for promotions  in banks is full of flaws. Loan processing culture has to be improved. Human resources are key to success. If workers are happy and if their good work is awarded and bad workers are punished, there is no doubt that work culture in bank will grow healthier.

Lastly , please ask bankers, how much they have total of written off accounts and out of which how much they have recovered by thrir efforts. Verify all reports and certificates. Do not trust blindly on data's furnished by banks or by auditors.  All data's must  be cross checked.if data furnished are false and fabricated, policy formulation and execution will also be ineffective and futile.

Monday, March 5, 2018

"Prompt Corrective Action" Written by Sri Sibu Kumar Das

Appeal to all to escalate it to RBI

There is a news item in financial daily BS that '5 more banks face PCA'. The banks under reference are Canara Bank, Union Bank, Andhra Bank, PNB(now, the acronym in wellknown pan-India) & Punjab & Sind Bank.

Now what is this PCA?

PCA is Prompt Corrective Action. This is a framework, a supervisory tool in the hands of RBI, which involves monitoring of certain performance indicators of the commercial banks as an early warning exercise and it is initiated once such thresholds as relating to capital(CRAR or CAR), asset quality(NNPA i.e. Net Non Performing Assets) and profitability(RoAs i.e. Return on Assets) are breached.

The objective of PCA is to restore the financial health of the banks. It has been in operation since 2002, with time-to-time updation and revision in  norms. Leverage of business is also monitored additionally.

Well, fine. A regulator/supervisor has to do it. But is there any bank in Public Sector which can be thought of to be outside the purview of PCA, if the norms PCA are meticulously followed?

 I hope, there is a need to establish a separate department for PCA at RBI; as 11 PSBs already there and 5 more knocking(as per the news item) and remaining all the PSBs lined up post-March!

The purpose of the post is to show promptness of the 'prompt' corrective action !

An old saying goes, "A stitch in time saves nine".

I will cite one case, the case that has prompted many in the propagate how good is privatization for these banks as well as in RBI which has woken up to its responsibilities as a regulator/supervisor !

Yes, PNB!

When the fraud at PNB  was detected, with such a huge OBE (Off-Balance Sheet) exposure over the years, what was the required CAR?

Has PNB been asked to calculate their revised CAR over the years vis-a-vis the exposed exposure?

At least, on this single count, the so-called PCA is overdue, taken retrospective.

And yet, PNB is not already under PCA! It goes to show how prompt is the "Prompt Corrective Action"

Written by SriSibu Kumar Das

What I feel is as follows.

There is no doubt that each and every public sector bank is in critical health . The idea of putting a bank in PCA category is to make best possible effort to cure  sick banks promptly.  But in fact the body supposed to cure these banks itself appear to be more sick and need to be placed under ventilator.

Regulating agencies were sleeping for decades in the name of  liberalisation and globalisation  and specifically for reformation and transformation of PSU banks into a solid global bank.

Unfortunately, the policy of so called reformation made these banks worse than what they used to be before the beginning  of liberalisation era in 1991.

I have been writing to officials of  RBI and other agencies for last ten years but people sitting at top of affairs never thought it necessary to peep into health of banks.  They under rule  of UPA government led by Congress Party thought it wiser and safer to ignore all good advices coming to them from various corners. They thought it better and comfortable to become silent spectators of Draupdi Chirharan ( here PSU banks are Draupdi).

Even majority of vetern trade union leaders who were supposed to take care of interest of working class I.e. bank employees,  became partners of top officials of  bank management in allowing them to loot banks fund in the name of growth.. Top officials of banks became rich and ground level bank staff slowly and gradually became slave or yesmen  of these looters and exploiters to ensure their survival, their posting at choice places, their fast promotions and also for earning fast money using lending powers and compromise  tactics with bad borrowers. Trade union leaders in general became saviours of corrupt bank employees and damagers of good employees.

Numerous cases of frauds and bad debts came to light during last ten years. But the then government officials AND ministers who were responsible to protect banks from inherent  risk were in fact contributor to RISK.  The great writer Sri Munsi  Prem chand said long ago " jab rakshsk hi bhakshak ban jaye to vinas nischit hai". It means destruction is inevitable when protectors become looters and spoilers.

Rulers of this country promoted, propagted and  irrigated culture of bribery and flattery only. And this evil culture killed honest AND sincere performers in all offices and all Public sector undertakings including banks.

During seventies  and eighties bankers used to fear RBI inspectors and auditors. With passage of time this fear vanished because inefficient and corrupt persons were given such key responsibilities.

RBI slowly stopped auditing and started trusting false and fabricated certificates of compliance submitted by banks. A culture of  manipulation  and window  dressing became the accepted culture at all levels.

Persons who talked of rules and policies used to be posted at remote and critical places to shut thrir mind for ever. Vigilence officers AND ombudsmen  were chosen  ftom lot of inefficient incapable AND corrupt officials.

God can only save banks now. There is however  no doubt that Sri Narendra  Modi led NDA government  is doing its best to improve health of  sick banks. But how far they will succeed in this Himalayan task depends on many factors.

Why Privatisation of Banks?

The Reserve Bank of India on Monday imposed penalty of Rs 3 crore on private lender Axis Bank for non-compliance of income recognition and asset classification (IRAC) norms. The regulator said it found discrepancies in the lenders assessment of non-performing assets which warranted a monetary penalty.

Bankers or political leaders or business tycoons or media men who are advocating  privatisation of PSU banks should read above   news which indicates how taxpayers money is unsafe more in hands of private banks than in PSU banks.

If PSU banks are eliminated or given to private sector , exploitation and fraud in private banks will break all past records of frauds and manipulations and ultimately  it is taxpayers and common men's money which will be endangered.

Private banks appear to be safer only because they are master in manipulation of data and in managing  government  officials and RBI officials. They know the art of cheating with rules and get protection from regulating agencies. Chiefs of many PSU banks are also master in this art of window dressing and they too managed officisls for decades during congress party rule. Now slowly they are getting  exposed.

Yesterday ASSOCHAM surprisingly advised the government privatising of public sector bank rather than condemning Nirav Modi for his cheating the Banks. It is very strange and interesting that the Associated Chamber of Commerce, the mouthpiece of the industrialists and business houses has suggested privatization of banks in view of the recent fraud in PNB.  They have conveniently forgotten the track record of private banks in our country.

It will be suicidal for government to go for privatisation  of PSU banks.

Secondly  this idea is practically unrealistic.

Thirdly business men will also weep once PSU banks are privatised.They are digging their own grave by suggesting  privatisation of banks. Because private banks do not lend to corporates or for poverty alleviation as much as PSU banks do.

Fourth government has no plan at all for privatisation of banks.No wise government can even dream of giving their financial  muscle to private sector.

Lastly taxpayers money is more unsafe in private banks than in PSU banks.

The need of the hour is to punish guilty officials wherever they are posted. Habit of searching scapegoat n juniors for each high value FRAUD or NPA and awarding key persons who are primarily  responsible for evils has promoted an evil  culture of flattery and bribery in all departments.  This habit has to be changed  from top to bottom.

Following message taken from social site reinforces my thinking.

Yesterday ASSOCHAM surprisingly advised the government privatising of public sector bank rather than condemning Nirav Modi for his cheating the Banks. It is very strange and interesting that the Associated Chamber of Commerce, the mouthpiece of the industrialists and business houses has suggested privatization of banks in view of the recent fraud in PNB.  They have conveniently forgotten the track record of private banks in our country. 736 Private Banks Failed, Amalgamated, ceased to function/ transferred their liabilities and Assets, went into liquidation between 1948 and

Private Banks put under moratorium in public interest due mismanagement and gone out of existence from 1969
1969 1. Bank of Bihar
1970 2. National Bank of Lahore
1971 3. Eastern Bank
1974 4. Krishnarao Baldeo Bank
1976 5. Belgaum Bank
1985 6. Lakshmi Commercial Bank
1986 7. Miraj State Bank
1986 8. Hindustan Commercial Bank
1990 9. Traders Bank Ltd.
1990 10. Bank of Tamilnad
1990 11. Bank of Thanjavur
1991 12. Parur Central Bank
1991 13. Purbanchal Bank
1993 14. Bank of Karad Ltd.
1995 15. Kashinath Seth Bank
1997 16. Punjab Co-operative Bank Ltd.
1997 17. Bari Doab  Bank Ltd.
1999 18. Bareilly Bank Ltd.
1999 19. 20th Century Finance Corporation Ltd.
1999 20. British Bank of Middle East
1999 21. Sikkim Bank Limited
2000 22. Times Bank Ltd.
2001 23. Bank of Madura
2002 24. Benaras State Bank Ltd.
2003 25. Nedungadi Bank Ltd.
2004 26. South Gujarat Local Area Bank
2004 27. Bank Muscat SAOG
2004 28. Global Trust Bank Ltd.
2006 29. Bank of Punjab
2006 30. Ganesh bank of Kurundwad
2006 31. UFJ Bank Ltd.
2007 32. United Western Bank
2007 33. Lord Krishna Bank
2007 34. Sangli Bank
2007 35. Bharat Overseas Bank
2008 36. Centurion bank of Punjab

If private banks are really efficient, why these Banks were closed down and merged with others.  Most of these banks were merged with public sector banks. 

PSBs have become the Neelakantha Mahadev to swallow the poison of failure of many private banks and it is funny that Assocham is asking PSBs to be privatized now. 

We understand their greed but they cannot claim that private banks are more efficient.

Secondly, take the alarmingly increasing bad loans in Banks.  Who are the delinquents and who are the defaulters? 

Are all of them not private companies, industrialists and corporate houses ?

 12 cases of NPAs have been referred to NCLT for insolvency and bankruptcy proceedings involving Rs. 253,000 crores.  Who are they?

Are all of them not top private corporate borrowers?

Why they did not repay the loans?

 Is it their efficiency? 

Should banks be privatized and handed over to these people?

In the PNB fraud, no doubt there is an unpardonable sin on part of those officials who have gone out of the way to favour Nirav Modi.

 But who has tempted them and influenced them ?

Is it not private corporate giant Nirav Modi ? 

 Take any major fraud in our country.  One will see the hand of private corporates in it.

Let them not forget that bulk of the loans given by public sector banks are to  private corporate houses.  If public sector banks are not efficient, why do they avail these loans from PSBs and why have not taken such loans from private banks.

Devil should not quote scriptures.  We feel to advice Assocham to ask the private sector corporate defaulters to repay the bank loans to the PSBs and condemn NIMO and others bad borrowers for the fraud they  have committed.

Thursday, March 1, 2018

Steps To Deal With Fraud And NPA

Cabinet approves Fugitive Economic Offenders Bill, 2018 

Offences worth Rs.100 crore or more under the Bill Property of Fugitive Economic Offenders to be attached

          The Union Cabinet chaired by Prime Minister Shri Narendra Modi, has approved the proposal of the Ministry of Finance to introduce the Fugitive Economic Offenders Bill, 2018  in Parliament.  The Bill would help in  laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.

The cases where the total value involved in such offences is Rs.100 crore or more, will come under the purview of this Bill.

The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences. This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.

It is expected that the special forum to be created for
expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.

Salient features of the Bill:
  1. Application before the Special Court for a declaration that an individual is a fugitive economic offender;
  2. Attachment of the property of a fugitive economic offender;
  3. Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;
  4. Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;
  5. Confiscation of other  property belonging to such offender in India and abroad, including benami property;
  6. Disentitlement of the fugitive economic offender from defending any civil claim; and
  • vii. An Administrator will be appointed to manage and dispose of the confiscated property under the Act.

If at any point of time in the course of the proceeding prior to the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law. All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for. Further, provision has been made for appointment of an Administrator to manage and dispose of the property in compliance with the provisions of law.

Implementation strategy and targets:
In order to address the lacunae in the present laws and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, the Bill is being proposed. The Bill makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution. A scheduled offence refers to a list of economic offences contained in the Schedule to this Bill. Further, in order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Bill.

There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings. The absence of such offenders from Indian courts has several deleterious consequences - first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India. The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed. It may be mentioned that the non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011). The Bill adopts this principle. In view of the above context, a Budget announcement was made by the Government in the Budget 2017-18 that the Government was considering to introduce legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum.

Cabinet approves Establishment of  National Financial Reporting Authority 
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has approved the proposal for establishment of National Financial Reporting Authority (NFRA) and creation of one post of Chairperson, three posts of full-time Members and one post of Secretary for NFRA.
The decision aims at establishment of NFRA as an independent regulator for the auditing profession which is one of the key changes brought in by the Companies Act, 2013. The inclusion of the provision in the Act was on the specific recommendations of the Standing Committee on Finance (in its 21st  report).
The decision is expected to result in improved foreign/domestic investments, enhancement of economic growth, supporting the globalisation of business by meeting international practices, and assist in further development of audit profession.
The jurisdiction of NFRA for investigation of Chartered Accountants and their firms under section 132 of the Act would extend to listed companies and large unlisted public companies, the thresholds for which shall be prescribed in the Rules. The Central Government can also refer such other entities for investigation where public interest would be involved.
The inherent regulatory role of ICAI as provided for in the Chartered Accountants Act, 1949 shall continue in respect of its members in general and specifically with respect to audits pertaining to private limited companies, and public unlisted companies below the threshold limit to be notified in the rules.
The Quality Review Board (QRB) will also continue quality audit in respect of private limited companies, public unlisted companies below prescribed threshold and also with respect to audit of those companies that may be delegated to QRB by NFRA.  Further, ICAI shall continue to play its advisory role with respect to accounting and auditing standards and policies by making its recommendations to NFRA.
The need for establishing NFRA has arisen on account of the need felt across various jurisdictions in the world, in the wake of accounting scams, to establish independent regulators, independent from those it regulates, for enforcement of auditing standards and ensuring the quality of audits to strengthen the independence of audit firms, quality of audits and, therefore,  enhance investor and  public confidence in financial disclosures of companies.

Bank ke Achhe Din Ane Wale Hai

It is a matter to be appreciated by all that Government of India has taken many  wise, fast, bold and effective steps to recover money from not only Nirav Modi like bad persons  but also by ordering closure of 35 foreign branches opened by Indian PSU banks. It should not be astonishing  that many foreign branches were opened only  to facilitate bad borrowers who gifted hugely to bank CEOs in India.

Indian bankers who are unable or who  failed to protect banks in India  from frauds and bad debts cannot be expected to keep their banks  risk free in foreign land.  Bank officers in general enjoyed foreign posting as paid LTC.

Similarly  government  should stop reckless expansion of branches and stop brainless promoting officers based on flattery and bribery.
Rapid expansion of branches by various banks just to please politician ruling this country in the past decades has slso caused immense loss to banks and resulted in huge jump in bad loans.

I appreciate proposed bill to regulate auditors who are at root of deep rooted malady  in PSU banks and who are largely responsible  for rise in black money and bad loans in banks .

Past government  is fully responsible  for  present  pathetic position  of PSU banks as also that of Indian economy .  But I am fully confident that Modi led NDA government will do commendable job in curing critically sick banks. Coming events cast their shadow before.

In the history of 50  years of banks and 70 years of Indian freedom , none of government  took such a quick and effective action against economic offenders as Mr Narendra  Modi PM led government  has taken against fraud master Nirav Modi, Choksi and Kothari who cheated several banks. 

Had government  learnt some lessons from Harshad Mehta scam , Ketan Parikh scam , Satyam computer scam, Global Trust Bank Scam , Cobrapost exposure, IOB FD scam, various cooperative  bank scams, LIC housing loan scam, united bank bad loan escalation, SBI sudden jump in bad loan, banks running in loss, Regional Rural Bank scams and other bank related frauds and bank loan defaulters, I am sure Indian banks could have been safer and person like Nirav Modi could not dare defraud so many banks.

UPA government and RBI did not learn lessons from Syndicate Bank bribery case in which a CMD of bank allegedly took bribe to lend additional money to Bhusan Steel. 

I and many others had several times expressed that if government  of India make honest assessment  of assets all EDs and all CMDs of all Public banks of last ten years, working or retired, they could  understand the gravity of evil culture propagated,  promoted and irrigated by them down the line.

Unfortunately the then UPA government, the then ministers, the then RBI officials, auditors, CBI officials and Vigilance  officers were  also of evil nature in general.  Perhaps this is why no solution was visible to anyone of them and neither did they take  any preventive  or curative  step during  10 years of their rule to stop relentless rise in bad loans and bad officers in public banks  . Birds of same feather flock tohether.

During last ten years hundreds and thousands of letters have been sent to hundreds of key dignitaries including  to PMO by several well wishers depicting  irregularities and about evil culture prevailing in PSU banks. But none of them were given any value.

 IT would not be an exaggeration  to mention here that hundreds and thousands of Nirav Modi and Kothari like fraud masters and bad borrowers are still  hidden in the system with the help and nexus of mischievous and evil minded  bankers sitting at helm of affairs.

It gives me immense pleasure that Narendra  Modi Prime Minister and Arun Jaitley Finance Minister  led government has taken many bold and beautiful  steps and many proposals are in pipeline   to teach lessons to bad borrowers and fraud committers.  They have yet to do a lot to teach lessons to top officials of banks as well as to politicians who have contributed  a lot in spoiling health of public sector  banks as also that of Indian economy.

 Indian judiciary and administrative  officers are also big contributor in non recovery  of money from bank loan defaulters. 

It is true that as government  speed up cleaning the system , credit growth and GDP growth will face immediate hit. But in the long run it will help in boosting up growth in credit qualitatively  as well as quantitatively. Besides , defaulters of bank loans will make their best effort to repay banks dues in time to get rid of punitive action. Problems  related to liquidity faced by banks will also be solved to a great extent. Bad officials of banks will now  refrain from bribe led lending or target oriented lending. Honest officers and good performers will get chance to sit at top posts and to protect banks. GOD BLESS all.


Last but not the least, if banks are safe and progressive there is no doubt that bank staff ( excluding  top few )will regain their lost image and will be rewarded with best possible  wage hike.

United bank episode

Bank pension scam

Sczm after scam

Fraud and scam

Which bank is first in NPA

Thursday, February 22, 2018

Praiseworthy Effort on Mass Transfer of Officers

Ref : GS/FEB/2018/004     DATE.21.02.2018


The Chief Vigilance Commissioner
Central Vigilance Commission
Satarkata Bhavan , A-Block
GPO Complex , INA
New Delhi - 110 023

Dear Sir,

Sub : Transfer of Officers in the wake of alleged fraud at Punjab National Bank

I wish to draw your attention on the happenings in the Banking industry that when the CBI, ED were busy searching Mr.Nirav Modi’s business establishments, all the stake holder representatives in the Banking field busily looking for reasons to shirk their responsibility, media and public are actively slapping the entire blame on the bankers, innocent bank officers are keeping their fingers crossed wondering on their futures, the HR wings of the Banking industry busily involved in transferring the officers and employees, unminding its immediate negative impact on the business during the last month of the financial year, with the sole objective complying the CVC directives.

If the fraud in PNB has shattered the morale of Bank officers and employees, the CVC direction on transfer has shattered confidence level which ultimately questions the very existence of the Banking sector.


In this regard I wish to present the following few facts for your kind information and needy action.

1. The Public Sector Banks are in existence for the last 100+ years and have developed a time tested promotion and transfer policies which are strictly being followed as ritual every year in the banking industry.
2. In fact, when an All India Civil Service Officer is allotted to a particular state at the entry level itself to spend his entire remaining service in the particular state, it is only the bank officer who is subjected to All India transfers in every cadre and has to be branded as All India service officer in true sense.
3. The Government interference in suggesting the compulsory rural service, branch service and job rotation and similar stipulations linked with the promotion have, every year, resulted in large scale transfers throughout the country.
4. GHOSH committee recommendations on transfer and monitoring its strict implementation by the controllers by way of getting the confirmation from the corporate office of the Public Sector Banks (PSBs) every year gives ample testimony to the fact that the transfers and job rotation are strictly followed by the PSBs.
5. It is pertinent to mention that if any officer is retained in any place / position and more particularly, in the administrative units, it may either be due to his/ her specialised qualification or Bank must have needed him on certain special administrative reasons.
6. Transferring the experienced officers at crucial areas such as Treasury operations, Risk management, Accounting and Credit Management at this time of the year would have a vital impact. Reserve Bank of India, had earlier advised banks that officers should have requisite certification / qualification before being posted in the above functional areas considering the importance of these areas in banking.
7. The promotion and transfer process generally commences after the financial year is over and completed before the first quarter i.e.June in almost all the public sector banks. As such effecting transfers now and then undertaking the process immediately in another two months in a full fledged manner will hamper the functioning of the banks for 3 - 4 months. This will result in heavy work load as well increased costs while the banks are facing tougher times. 
8. It is indeed paining to mention that the CVC direction to transfer all the officers and employees immediately as if we were following faulty policies so far has totally demoralised the lakhs of innocent and committed officer. This, we apprehend, may cause more damage to the Bank, than the current exercise of transferring the officers.
9. It is further paining the lakhs of young officers joined in the Banking system, that while the army men are not blamed for the Bofors scam and the employees in the telecom sector are not blamed in the 2G scam, it is always the innocent bank officers and employees at the field level who are becoming the victims and made to shoulder the entire blame, in the unfortunate event of any fraud happening in the banks.
10. The bankers are primarily dealing in credit which possesses inherent risk. We the Bank officers are expected to work in an unknown place, deal with unknown customers and to take credit decisions on an unknown activity that too based on the future projections.
11. I wish to recall the Honourable Finance Minister’s statement as quoted in the press today, “ Banking system functions based on trust, which is inherent in the lender and creditor relationship. ’Not so ethical’ section of business think they do not need to pay loans. Such stray cases throw up important questions and it is incumbent on the state to chase such people to the last possible stage and make sure that the country and honest tax payers are not cheated”.
12. But on contra, for the fraud happened in one branch of one bank which involved few officers, the entire work force of the banking industry is being chased throughout the country.
13. We the trade unions never supported the guilty and it is always our demand to expose the culprits. but it should not end up in placing the entire workforce in bad light. Also these transfers cannot be branded a good governance and HR policy, by any standard.
14. Sir, in the midst of so many unanswered questions so far like
a) The role of board members representing the Government, RBI, Govt. nominees and share holders
b) The role of CVO present in every bank.
c) The role of RBI audit and other audits carried out in the bank

We the committed workforce, undertake to continue our mission of building up our business despite the unprecedented onslaught unleashed on the Banking fraternity.

We request your good selves to amend the direction on the transfers to defer the relief till 31st March 2018 so as to facilitate us to work uninterruptedly during these crucial months for improving the business and achieving the set targets.

Yours Sincerely,

AINBOF.                                                                                     Forwarded as received.


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