Monday, June 10, 2019

Supreme Court Judgment in the matter of 1616-1684 Index Treatment to commutation arrears

Circular issued by AIBRF on the above subject is reproduced below
Ref. No 019/284                                                         07.06.2019

  The Office Bearers/ Central Committee Members/ State Body Chiefs

Dear Sir,
     Re: Supreme Court Judgment in the matter of 1616-1684 Index
     Re: Treatment to commutation arrears

We request you to refer IBA circular no.  4786 dated 03.04.2018 advising member banks to extend benefits to all eligible pensioners as per the Supreme Court judgment dated 13.02.2018 in the matter of 1616-1684 Index.

2. On receipt of this advice from IBA most of the member banks have since paid arrears to the eligible pensioners along with interest @ 9 per cent per annum.

3. However during the implementation of the court order, many banks have not given proper treatment  for calculation of  difference of the commutation arrears, interest thereon for the delayed period and its  recovery.

4. On getting information from our affiliates we submitted representation to IBA vide our letter No. 2018/58 dated 16.06.2018 requesting them to advise the member banks to pay arrears on the commutation amount paid and payable as per the court order along with interest at 9 per cent for delayed period. Further some banks  on the representations  made by our affiliates  also referred the matter to IBA for guidance. Our affiliate State Bank of Mysore Pensioner Commune had filed Contempt petition in Supreme Court on this issue.

5. Now we understand that IBA after examining the issue, has  recently  advised those  banks who have made representations  to them to calculate difference of commutation payable and paid and pay the difference amount with interest with simultaneous recovery  of installments as and when  due as per provisions of pension regulations.

5. Based on the above advice of IBA, our affiliates are requested to represent to the bank management for payment of commutation difference with interest.

                       With Warm Greetings
                                                                                    Yours Sincerely,
                                                                         GENERAL SECRETARY

Friday, June 7, 2019

IBA quote exorbitant amount of 95000 crores for updation of pension

Copy of Representation dated 24 05 2019 by the ALLAHABAD BANK  RETIREES’WELFARE SOCIETY to the Secretary, MoF is reproduced below for information:

The Secretary
Department of Financial Services
Ministry of Finance,
Jeevan Deep Building,
Parliament Street, New Delhi           
Respected Sir,

Subject – Revision /Updating of Pensions of Bank Pensioners

Reference – Page Number 263 to 265 of the File No 11/5/2001- IR of
Department of Financial Services, Ministry of Finance.

The Governor of RBI had by letter dated 06.10.2017 requested the Ministry of Finance  for Updating of Pension to RBI Pensioners, which was declined by letter dated  26.2.2018, stating contingent effect resulting in similar demands in Public Sector Banks, most of which are currently facing financial difficulties.

The pages under reference are note-sheets relating to decision taken by Ministry of Finance on the request by Governor of RBI to Revise/Update pensions of RBI pensioners, to bring them at the level of Pay Revision done for Period of 1.11.2007 to 31.10.2012.The noting by officers of DFS, at Page Number 263 to 265 of File No 11/5/2001- IR, are of dates from 31.1.2018 to 22.2.2018

The Page Number 264 (Copy of Page No 264 enclosed for ready reference as Annexure – 1)  with Heading – Periodic Updating of Pension at Para No (ii) & (v) reflects following information –

a.       At Para No (ii) “At present Pension Corpus is around Rs.12000 Crores”.

b.      At Para (v) “RBI has informed the financial cost of updating in RBI is 857.52 crores. As it may have contingent effect, IBA has informed total cost of updating pension in PSBs could be Rs.95000 Crores. PSBs will not be in a position to take this burden.”

The Note sheet started on the request letter date 6.10.2017 of RBI, thus it can safely be said that figures could be latest of Sept-2017, if the Audited Figures of March-2017 were not taken as being six months old.

1.       Comparison of Cost of Pension Updating for RBI Vs for PSBs Pensioners

Logic of Comparison

The Pensions Regulations -1995 applicable to Bank Employees are pari-materia and are on same lines as are in RBI. The Pensioners in RBI and Public Sector Banks are the retirees of the same period from 1.1.1986 onwards and the Pay Revision Block Periods are also same.  Thus it can safely be concluded that Updating Cost for Bank Pensioners at the same level of 4440 CPI will also be same at percentages.

i.      Updating Cost for RBI pensioners, as percentage of Pension Corpus of RBI was = 857.52/12000x 100 = 7.146%

ii.    The IBA has informed the Cost of Updating at Rs.95000 Crores.  The Corpus of 26 Nationalized Banks as on 31.3.2017 was Rs. 164647.01 Crores and as on March -2018 it was Rs.178188.80 Crores (Inclusive of seven associates of SBI merged with SBI effective from 1.4.2017). Considering the Corpus as mean of 2017 & 2018, the Corpus in Sept-2017 can be accepted at Rs.171417.91 Crores. Going by the Cost of Updating Pensions for PSBs, as given by IBA was Rs. 95000 Crores. Thus the Cost as informed by IBA comes to - 95000/171417.90 x100 = 55.42% of Corpus of PSBs.

2.       Comparison Based on Number of Pensioners - RBI Vs PSBs Pensioners

i.     The Number of Pensioners of RBI was 34400 as mentioned by Shri L.R.Pranb – General Secretary of All India Reserve Bank Retired Employees Association in his request letter dated 10.2.2019, for pension updating addressed to Hon’ble Finance Minister. The Number of Pensioners in 26 Banks was 4.41 lacs. Thus number of Pensioners of 26 Nationalized Banks is 12.82 Times of Number of RBI Pensioners.(441000 divided by 34400)

ii.    The Pension Corpus of 26 Banks was at Rs 171417.91 Crores as against Pension Corpus of Rs.12000 Crores of RBI. Thus Pension Corpus of 26 Nationalized Banks is 14.28 Times of Pension Corpus of RBI. (171417.91 divided by 12000). Therefore the maintained Pension Corpus of 26 Banks is not only equally sufficient as compared to Pension Corpus of RBI; rather the Pension Corpus of 26 Nationalized Banks is 111.39 % of needed corpus. (14.28 divided by 12.82 =111.39%)

Both type of comparisons are very much logical, because the Pensions Regulations are similar, potential beneficiaries are also of the same Pay Revision Periods from 1.1.1986 to 31.10.2007 to bring them to similar level of Pay Revision of 1.11.2007 to 31.10.2012 at same level of 4440 CPI. Rather the Pay Scales of RBI are higher than pay scales of PSBs; therefore Pension Corpus of Nationalized Banks has more cushions as compared to that for RBI in percentage terms to meet Actuarial Valued Net Present Obligations of Pensions.

 Conclusion – In the light of above comparison, it is concluded that by no stretch of imagination the updating costs of pensions of the similar type of beneficiaries can have that much deviation. The Cost of updating pension of RBI pensioners is 7.146% of Corpus but for Pensioners of PSBs, IBA informed at 55.42%. It translates to meet 7.55 time (55.42 /7.146) increase of Pension in PSBs, as compared to similar Pensioners of RBI who had retired till 31.10.2007.

3.       WHY IBA informed such exorbitant figure?

i.     The IBA has no accountability as it is not a Public Body and is avoiding with full force to remain out from ambit of RTI Act-2005. The appeal filed by IBA against the order of Chief Information Commissioner is proof of this fact that IBA do not want to be accountable for any of its misguiding actions.

ii.   The details of such acts of IBA are within the knowledge of Ministry of Finance as is evident from the reply of Ministry of Finance to unstarred question number 508 in Parliament on 20.7.2018. (Copy of reply by MOF in Parliament is enclosed for ready reference as Annexure - 2).

This Annexure -2, explains with examples as how IBA had suppressed facts, gave incorrect information and misled the Ministry of Finance on lot many occasions. Not only this, the document discloses that IBA had given different guidelines to different Banks on the same Pension Regulations, 1995.

Examples Page No 5 & 6 of Annexure -2

a.       IBA by letter dated 12.03.2014 advised to some of the Banks to give Second Option of Pension to resigned employees who had served for 30 years.

b.      Some Banks have Provision of Voluntarily Retirement after 20 years of service, some have after 30 years and some do not have Provision of Voluntarily Retirement. This anomaly has not been appraised by IBA to Ministry of Finance.

c.       The Clause in Pension Regulations that resigned employee will forfeit right to pension was unjustly and unilaterally introduced in Regulations by IBA and IBA admitted this fact by letter to Govt, of India dated 06.08.2012.

iii.  The IBA has never tried to get estimates of cost of updating pension as was assured by Record Note date 25.5.2015 signed between IBA and Associations of Bank Employees/Officers. On frequent reminders by Associations of Pensioners, IBA always replied that Data is being obtained from Banks. Now all of a sudden without obtaining Data of Pensioners from 26 Banks, IBA informed updating Costs as Rs.95000 Crores, which is 55.42% of Pension Corpus of PSBs. How this figure of 95000 Crores was arrived at by IBA, requires details to support it.

iv.  By Record Note dated 25.5.2015 , IBA  had not only clearly declined to consider any proposal for Updating Pensions, but had gone to the extent of saying that No Contractual Relationship exists between Banks and Pensioners .(Copy  enclosed for ready reference – Annexure -3)

In the light of facts as above the negative attitude of IBA towards Pensioners need no further proofs. The Banks having the status of “State” within the meaning of Article -12 of Constitution of India are being indirectly controlled by IBA on issues of Pensions, whereas IBA, has no accountably for wrong guidelines given to Banks. The IBA which cannot go beyond the mandates given by Banks, which too are  only in the matter of Wage Negotiations, once in five years have most of the time trespassed into the affairs of Pensioners by misguiding Banks, which is well  spelt by Ministry of Finance by reply to unstarred question No 508 in  Parliament  on 20.7.218.

4.       Revision/ Updating Given to RBI Pensioners

The Updating has been given to RBI Pensioners Retired till 31.10.2007. The number of survived pensioners and family pensioners of 26 Nationalized Banks is approx.1.45 lacs only and Actuarially Valued Required Pension Corpus for them is just Rs.19924 crores only as on 31.3.2018. This low PVO for these pensioners is for the reason that they are in average age of 76years, with further expected life of average 6 years only as per IALM Chart (2006-08) for longevity in Indian Conditions.  Now when the total Corpus of Rs 19294 Crores is estimated sufficient for Payment of Pensions for their remaining life of average six years, the updating cost at 8 % against 7.146% for RBI is calculated as 8% of 171417.91 at Rs.13713.43 Crores only.

The figure of Rs. 95000 Crores as informed by IBA will increase the pension to 600% from Present Monthly Pensions and thus their pensions will go two times of the pension of retiree under Pay Revision of 2012 to 2017. The updating to that extent can never be either demanded by retirees of pre 2007 period nor can it be the rational thought for updating the pensions.

5.       Updating Cost of Pension of  Pensioners of 26 Nationalized Banks-

(i)   As has been calculated at Para No 2(ii) above that the Pension Corpus of 26 Banks is not only equally sufficient in comparison to Pension Corpus of RBI; rather the Pension Corpus of 26 Nationalized Banks is 111.39 % of needed corpus. The Updating cost of Pensions in RBI was 7.146% to update the pensions of Retirees till 31.10.2007. At para Number 4 above based on same pattern of RBI, the updating cost to Bank Pensioners is calculated to be Rs.13813.43 Crores for the retirees of same period – till 31.10.2007, which can be met within the Present Corpus which is 111.39% of needed.

(ii) Pensioners are under almost similar pension benefit both in RBI and PSBs; the required Pension Corpus of 26 Nationalized Banks is 13.39% extra based on same parameters of requirements of Pension Corpus for RBI. Thus updating to all pensioners retired till 31.10.2012 is very much feasible within this extra 11.39%, which is Rs.20292.95 of Rs.178188.80 Crores Corpus in March-208, to bring Pensioners of 26 Nationalized Banks at Pay Revisions of effective from 1.12.2012.

6.        Therefore the plea of IBA that PSBs will not be in a position to take the burden of updating/revision the pensions is nothing but an act of misguiding the Ministry of Finance, and such statements by IBA may damage the image of Nationalized Banks as the common men may take such statement in the sense that Banks are not capable of even fulfilling the justified obligation towards own pensioners. The Banks are very much in position to absorb the cost of updating pensions within the corpus of 178188.80 Crores as on 31.3.2018 , which they are maintaining 11.39% extra than Pension Obligations if assessed with same parameters of Actuarial Valuation for Corpus of RBI.

Pensions Updating costs for RBI Pensioners was  7.146%  of Corpus, it can be safely concluded that pension updating  to PSB’s Pensioners can be given not only to reties up to 31.10.2007, but also to those retired till 31.10.2012, within the Corpus of Rs.178188.80 Crores as on 31.3.2018 of 26 Nationalized Banks.

7.       The page Number – 9 of Annexure- 2 (Reply by MOF in parliament) have mention of Pension Corpus of Rs.249122 Crores, probably including of State Bank of India, which we have excluded in our letter, because State Bank of India has different Pension Scheme to its employees and their updating is not related with pension of PSBs. Moreover the comment of Ministry of Finance at page Number – 9 is worth noting.

Quote -

“Banks have made robust pension funds of Rs249122 crores, which would be more than enough to cater to these employees.”

We therefore request you to kindly examine our submissions, which are based on the facts that Pensions are similar in RBI and PSBs, therefore the Cost of Updating Pensions will also be on same percentage. We urge upon you to kindly assess the proposal of updating pension to PSBs also and we are sure that your office will find it feasible within the present pension corpus to sanction updating of Pensions of Bank pensioners also. We hope for early favorable response.

Sincerely yours




Friday, May 24, 2019

Meeting Convened by AIBOC on retiree issues

 Circular issued by AIBOC on the above subject is reproduced below
Circular No. 2019/31                                                            Date: 21.05.2019

To All Affiliates (Please Circulate)

AIBOC holds a meeting with major Pensioners’ and Retirees’ organisations of Banking sector on 20th May, 2019 at New Delhi

We have the pleasure to inform you that as we decided in the last GS Meet of all affiliates of AIBOC held in New Delhi on 12th March, 2019 to hold a broad-based consultation with the major Pensioners’ and Retirees’ organisations of the banking sector on different issues affecting the interest of retirees, we had approached the leaders of such organisations and invited them at a meeting in New Delhi organised by the Confederation for this purpose. Although it was contemplated to be an unofficial one, the presence of very senior leaders of the pensioners and retirees movement and the gravity of deliberations made by them virtually made the meeting held in New Delhi on 20th May, 2019 a very meaningful one. We are very happy to share that the leaders of SBIPA, AIBPARC, all the affiliates of CBPRO and AIBRF remained present in the meeting at the invitation of AIBOC.

2. The undersigned, in his initial address, briefed the house about the present stalemate persisting in the industrial relations scenario of the banking industry arising out of the issue of fractured mandate. He expected that IBA would resume talks after formation of popular government. This is high time, he felt, that the fight of retirees and the serving people should be synchronised and the sentiment of retirees should be addressed with all earnestness and sensitivity. It is matter of hope that each and every constituent of UFBU has already started showing interest in resolving the issues of retirees and pensioners but the degree of intensity is probably not the same. He once again reiterated that AIBOC is committed to resolve the issues of retirees before any agreement is formalised.

3. Very senior leaders viz. Com. S.C. Jain (AIBRF), Com. Gandhi and Com. Ramesh Babu (SBIPA), Com. K.V. Acharya and Com. S. Sarkar (AIBPARC), Com. Ahuja (RNBOC), Com. A.K. Goel (FORBE) of the pensioners and retirees movement took part in deliberations. The following points were discussed and stressed upon:

a)       Although this has been an informal meeting, the leadership of AIBOC should take initiative to carry forward all the demands of retirees and pensioners to a logical conclusion.
b)       The notification of GOI in the matter of updation of RBI pension has created a new hope in the minds of retirees and there is a need to study the financial and legal implication of RBI updation; utmost importance should be given on improvement of family pension; the hiking of medical insurance premium, which was virtually unaffordable and IBA/GOI should be urged upon to issue necessary directions to banks to bear the premium. IBA/GOI will have to think about the pathetic plight of super senior citizens who have crossed 80 years of age and been drawing a pittance in the name of pension / family pension.
c)       In Pension Regulation 35(1), the modalities of updation of pension have already been spelt out and in subsequent govt notification, this provision has been made all comprehensive. It is unfortunate that Govt/IBA has denied to understand and implement this provision in letter and spirit. Officials of Govt of India have already executed an affidavit that they are not in a position to allow updation of pension in RBI because it has a larger ramification. Now when pension in RBI has been updated, it cannot be denied in banking industry. The unresolved issues of special allowance and stagnation increment should also be looked into.
d)       The fight launched by different sections of RBI employees and officers in favour of retirees is noted with satisfaction and same kind of involvement of UFBU in regard to demands of retirees / pensioners is also hoped.

4. Com Sanjay Manjrekar, Senior Vice President, AIBOC also addressed the house. He assured the leaders present that Confederation has always been sympathetic and sensitive to the issues of Retirees. He also expects that other constituents of UFBU will also be coming forward with the same degree of intensity. Com Harvinder Singh, former General Secretary of AIBOC also addressed the house. He mentioned that the promises made by IBA in the Record Note should be carried forward to a logical conclusion.

5. The undersigned in his concluding remark, opined that this meeting was the beginning of a consolidated movement. In future, when the negotiations will resume in full swing, the consultative process will continue and he wanted that a small committee should be formed in this regard. Booklets prepared by AIBPARC and AIBRF on legal and financial implications of pension updation and

improvement of family pension were also handed over to the undersigned for information. Com Dipak Basu (SBIPA) proposed the vote of thanks on behalf of Pensioners’ and Retirees’ organisations and pledged that all the organisations would extend all possible support to AIBOC in the days to come.

6. We note with satisfaction that this meeting has been an enlightening one for each one of us. The sharing of information and thought was appreciated by all present in the meeting. The undersigned also acknowledges the support received from SBI Officers’ Association (Delhi Circle) for shouldering the responsibility of hosting the meeting at a very short notice.

With greetings,
Comradely yours,

(Soumya Datta)
General Secretary


Wednesday, March 13, 2019

Updation of Pension and Improvement in Family Pension - Letter by CBPRO to Hon Finance Minister Shri Arun Jaitley

We reproduce below the letter by CBPRO to Hon FM

Shri Arun Jaitley ji
Hon’ble Finance Minister
Government  of India
North Block
New Delhi.

Honourable Sir,

Updation of Pension and Improvement in Family Pension

We wish to invite a kind reference to our letter dated 03.01.2019 wherein we have listed out the pending issues and grievances of Bank Pensioners and Retirees. We had also impressed upon the need for resolution of such of those issues which have been causing serious concern and hardship to the Senior and Super Senior Citizens from the Banking fraternity who had served the country and helped take Banking services to nook and corner of the country and hitherto neglected sectors of the society.  We have always conducted ourselves as a vehicle of carrying out various schemes of the Government for the upliftment of poor and direct benefit transfer to more than 33 crores beneficiaries of PMJDY accounts. Having served the country during prime of their life, the Bank Pensioners and Retirees fondly look forward to your good self for much awaited relief through redressal of their grievances in the evening of their life before breathing their last.

We are extremely glad to know that the Government of India, Ministry of Finance, Dept of Financial Services vide its notification dt 05.3.2019 has approved the long pending demand of the RBI Pensioners to update their Pension as per the formula given in the said notification. It is a welcome step. We congratulate and thank you for this gesture.

The decision of the Government to grant extension of the benefit of Updation of Pension to the Employees & Officers of Reserve Bank of India has given a ray of hope to the other Pensioners & Retirees of the Banking Industry that similar demand from them shall also be considered immediately so as to benefit  more than 7.00 lacs families who have been patiently waiting for Updation of Basic Pension for more than two decades.

  1. Updation of Pension:

Further we would like to draw your kind attention on the following points in support of Bank Retirees demand for Updation.

  1. Our request for Updation is not a request for any fresh benefit. Pension Regulation 35(1) provided for Updation of Basic Pension and Additional Pension in respect of those Employees/Officers who retired between 01.01.1986 and 31.10.1987 and at the time of introduction of Pension Scheme in Banks during 1995-96 it was so given to them as they alone were eligible for Updation at that stage.

  1.  Periodic Wage Revision entails periodic Pension Updation. Pay Revision and Pension Revision are inseparable. Hence Pension updation has to be implemented in respect of SBI Pensioners, All Public and Private Sector Bank Pensioners who were employees of the member Banks of IBA. More over Pension is a deferred wage and it is paid out of Pension Fund

  1. Pension Regulation 35(1) was later amended vide Gazette Notification No:9 dated 01.03.2003 providing for Updation of Basic Pension and Additional Pension wherever applicable thus making it an open-ended scheme to provide the benefit of Pension Updation to all Retirees who become eligible on periodical revision of Pay through Industry level Wage Settlements.

  1.  IBA/Government has been denying the benefit of Pension Updation despite clear provision in Pension Regulation 35(1) sighting cost consideration and implications.

  1. Pension is a Deferred Wage and a property under Articles 19(1) (f) and 31(1) of Constitution of India and hence a statutory obligation of the Banks which are States within the meaning of Article 12 of Constitution of India.

f.        Pension including updated Pension and Family Pension become payable out of Pension Fund. The present Pension Fund of the Public Sector Banks including State Bank of India is quite robust and healthy at more than Rs. 300,000 crores with potential to afford paymen of 3to4 times of present disbursements on account of Pension and Family Pension.

g.       In Banks Pension is paid out of Pension Fund which is created by the surrender of the mandated management contribution of Provident fund by the Bank Employees and Officers during their service. Pension is not paid out of profits but out of the Pension Fund  so created. Hence payments to be so made as per Pension Regulations will not affect the Balance Sheet of the Banks. Provision, if any for Pension Fund is a charge on Profit & Loss A/c and hence is not payable out of net profit of the Banks.  Net profit has to be arrived at only after making all provisions including for payment of Salary and Pension which are statutory in nature. Statutory payments cannot be denied for cost considerations.

.2. Uniform 30% Family Pension at par with Government and Reserve Bank:

a.   The present methodology of computing Family Pension in Banks provides for a range         of percentage from 15 % to 30 % where in a lower percentage is assigned to higher Basic Pay with specified ceiling as a cap on Basic family pension.

b.    The above methodology effectively results in the Family Pension working out  merely  to 7 to 10% of last drawn pay restricting Basic Family Pension to a meagre sum of Rs. 4,000/- to Rs. 14000/- after attainment of notional age of 65 years by the deceased employee or 7 years from the date of death whichever is earlier.

   c.   Government and RBI Pensioners are paid Family Pension uniformly at 30% of last   drawn pay without any ceiling.

 d.   Un-affordability of proposed improvement in Family Pension is being arbitrarily quoted to deny the benefit despite there being adequate provision made during the service tenure of the employee by the Bank for payment of full Pension to the employee. Thus Family Pension being lesser than the Pension of the Employee, it would involve a negative cost to the Pension Fund. Hence the contention of IBA/Government about cost consideration defies logical, economic sense, rationality and above all humane consideration.

 e. Family Pensioners are largely the widows and hence the issue of rendering justice                to them at par with Government and RBI pensioners assumes greater and emotive     significance. Improvement in Family Pension at par with Government and RBI family pension  is therefore a genuine need and merits a sympathetic consideration.

Since it is a very emotive and justified issue, we earnestly request you to intervene and help much deserving Family Pensioners largely the women folk.

We as the coordination of Bank Retirees Organisations representing 100% of Bank Pensioners and Retirees, have conducted dharnas and demonstrations at about 30 important centres throughout the nation and more than 1,00,000 Bank Retirees and Pensioners had participated. The success of our demonstrations and dharnas is a reflection of the seriousness of the Pending issues and anxiety in the minds of Senior Citizens about protracted delay in redressal of their grievances by a government which is known for its objectivity, transparency, speed, and fairness in disposal of the pending matters. In this background we once again request your good selves to consider all our pending issues more particularly the foregoing two important and urgent issues:

It is thus clear that the cost of Updation will be absorbed by the yield on the Pension Fund without denting the Balance Sheets of the Banks in any manner whatsoever.

Honourable Sir, We have fond hope of getting justice at your hands and hence we on behalf of more than 7,00,000 Bank Pensioners and Retirees make an earnest and fervent appeal to your good self to consider our above requests favourably and help resolve the same by advising Indian Banks Association and Dept of Financial Services, at the earliest.

         With Respectful Regards,

Yours faithfully,

          (A.Ramesh Babu)       (K.V. Acharya)          (S.C. Jain)
               Joint Conveners, CBPRO                General Secretary, AIBRF