Tuesday, May 18, 2010

Letters to the Principal Secretary, Prime Minister Office by Shri C N Venugopalan Ex Bank Manager

 We give below the letters written by Shri C N Venugopalan to the Principal Secretary , Office of Prime Minister , Government of India. The letters contain various issues on 2nd option of pension and "Evaluation of fantastic uncomparable  contribution to the banking system".
11th May, 2010

The Principal Secretary,
Office of the Prime Minister,
Government of India,
New Delhi – 110 001
                        Kind Personal Attention: Shri. T K A Nair,
Respected Sir,
I am very much inspired by the speech of our Hon'ble  Prime Minister on
8th May, 2010 addressing the Golden jubilee National Conference on Law
& Governance of the Bar Association of India wherein he called upon
Indian legal fraternity to become an integral part of the system of
administration of justice in the country.  The worthy Prime Minister

stressed that justice shall not only be in the strictest legal sense
and should focus, social, economic and political justice as set out in
the preamble of our magnificent Constitution.  The Prime Minister was
seen elated to say that the Cabinet consisted of several outstanding
legal luminaries making it capable of giving good governance to the
country.   Affordable litigation and reduction in number of suits were
his aspirations.

It became obligatory on my part to bring to the attention of the
Hon'ble  Prime Minister an event which took place against the laudable
objective with which he is functioning in line with the magnificent
Constitution.  While concluding the wage pact of the Bank Employees
and extension of fresh Option of Pension to those bank men who could
not opt when the scheme was launched initially in 1995,  the Hon'ble
Finance Minister, a member of the Cabinet and a legal luminary has
advised the parties to the agreement viz. IBA and Bank Unions to
extend the benefit of Pension to the retired employees with effect
from the date 27th November, 2009 when they are in the legal  and
socio economic grounds entitled to Pension from the ensuing day of
their retirement.     The act of depriving them the benefit from the
date of retirement is, in letter and spirit, against the Constitution
of India.   While fixing an arbitrary date which was irrelevant in the
context, the action of the Hon'ble Finance Minister was vitiated by
breach of the oath of office he took while swearing in, to treat
people of all manners alike.

The following anomalies had crept in the wage agreement in the key
industry of India:-

1.      Those who are already retired and are now in financial distress
have to pay back 56 percent of the CPF which banks paid to them on
retirement as penalty albeit the fact that Payment of Pension is under
one and the same Pension Regulations  and identical people who opted
earlier had not to pay such a contribution

2.      The Pension for the period from their date of retirement to the
date 27th November, 2009 arbitrarily fixed at the behest of the Union
Finance Minister is denied to the retired which is prima facie

3.      The existing bank employers in the CPF segment who have to enroll
under Pension Scheme have to pay back from the arrears 2.8 times their
Revised Pay for November, 2007 in addition to surrender of employers'
share of CPF as entry fees when their counterparts  who opted earlier
had not to pay it

Pension is declared as the right of an employee which is akin to
Fundamental Rights of a citizen by the Apex Court and making the
employees share it is shame to the Financial Sector and to the
nation.  In short IBA and Banks are imposing irrational penalty to all
the new entrants to Pension Scheme.  In the case of those now working,
Banks are taking back with the other hand a lion share of the salary
arrears paid through one hand.   Whereas the arrears attract Income
Tax, and the recovery does not attract tax rebate, a further penalty
is also imposed indirectly by way of tax.   Gross discrimination is
meted out to all those are to be encompassed under Pension Scheme
albeit the fact that the Pension Scheme is one and the same for all.
It is learnt that the decision for recovery of money to finance the
alleged short fall in Pension Fund and denial of pension from the date
of retirement etc have stirred bank employees creating a turmoil and
turbulence throughout the nation.

Identical lots are not given uniform treatment in spite of the fact
that all are doing the same work when the salary and perquisites and
retirement benefits for SBI employees totally differ from that of the
Public Sector Banks and SBI  subsidiaries.  When Government gave a pay
hike of 40 percent to its employees who work for five days a week, the
Bank Employees who work six days are given a hike of 17.5 only, a
major portion of which too is taken back in the name of the Pension
burden.  The denial of Pension from the date of retirement up to the
arbitrary date, recovery of 56 percent of CPF as levy from them  and
penalty of 2.8 times Pay from the working etc.  take things to the
nadir of ethics.   I earnestly request you to please place the matter
before the Hon'ble Prime Minister and to advise MOF  to issue fresh
directions to ensure that perfect justice is made available to retired
bank employees including me in line with the aspirations and vision of
the great Prime Minister as also to ensure that the Cabinet does not
become a party to give rise to fresh Court cases coming up in relation
to Pension of Bank employees.

Waiting to hear from you, I remain.

Thanks and regards,

Yours faithfully,

11th May, 2010

The Principal Secretary,
Office of the Prime Minister,
Government of India,
New Delhi – 110 001
                        Kind Personal Attention: Shri. T K A Nair,

Dear Sir,


Seventeen listed PSBs made incremental profits of 22,502 Crores over
2006 during the three ensuing years.  During 2003 -2006 the Chairmen
of different banks fought themselves ignoring national goals for their
own cosmetics, pulling the legs of one another most unethically using
the deregulated interest rates, allowing interest concessions up to 6
percent to potent borrowers.

When IBA said, banks did not have financial muscles to bear the burden
of fresh Pension Option, I criticized them and pointed out the process
of debilitating of the Banks by those who are to strengthen them.
In 2006 August, the lethal interest rate war and take over mania
almost came to an end.  I mooted vehement criticism to RBI, MOF etc.
saying that "thanks to the efficient monitoring of Banks by RBI by
keeping their men as directors on board the different banks, even a
PSB viz. New Bank of India vanished into obscurity; RBI changed the
nomenclature of their director as "Nominee Director".  The change was
announced by CNBC Channel in August, 2006.

The take over of accounts offering lesser rates of interest stopped
almost as a result of my efforts.    The stoppage of the interest rate
war resulted in soaring profits for all Banks in Public and Private
Sector.    The incremental Profits over the year 2006 for the next
three years for 17 listed PSBs were to the tune of Rs.23,670.00
Crores.  SBI, Associate Banks and Private Sector Banks too must have
made incremental profits totaling double of the amount for the 17
Banks.    It is after contributing to the Indian Banking system about
Rs.70,000 Crores that I pressed the demand for Pension Option.   The
actuarial assessment of the deficit in Pension Fund was Rs.6,000
Crores, i.e. just 10 percent of the incremental profits of the three

Profits of Eighteen listed Public Sector Banks in India (excepting
banks that are not listed) during the past five years:
                                   March   March    March    March      March
                                      2005    2006    2007        2008       2009
Punjab National Bank    2707.21 2874.77 3230.64 4006.24 5744.35
Bank of India                 340.05  701.44  1123.17 2009.4  3007.35
Union Bank of India      719.06  675.16  845.39  1387.03 1726.55
Central Bank of India     357.41  257.42  498.01  550.16  571.24
Canara Bank                1109.51 1343.22 1420.81 1565.01 2072.42
Indian Overseas Bank    651.36  783.34  1008.43 1202.34 1325.79
UCO Bank                    345.65  196.65  316.1   412.16  557.72
Syndicate Bank              402.90  536.50  716.05  848.06  912.82
Allahabad Bank             541.79  706.13  750.14  974.74  768.6
Vijaya Bank                  380.57  126.88  331.34  361.28  262.48
Bank of Maharashtra     177.12  50.79   271.84  328.39  375.17
Corporation Bank        402.16  444.46  536.15  734.99  892.77
Indian Bank                 408.49  504.48  759.77  1008.74 1245.32
Dena Bank                    61.00   72.99   201.56  359.79  422.66
Bank of Baroda           676.84  826.96  1026.47 1435.52 2227.2
Andhra bank               520.1   485.5   537.9   575.57  653.05
Oriental Bank of Commerce  760.81  803.16  826.81  840.94  905.42
Total                       10562.03   11389.85   14400.58  18600.36 23670.91
 Profit above March 2006 level (Incremental Profit)
       3010.73 7210.51 12281.06
Total Profit hike for all the three years                       22502.30
The Loan waiver for helping farmers in difficulties in the pre-
election period was Rs.70,000/- Crores.   Benefits mostly went to
willful defaulters with ample means. Decision makers were bank
managers who extended on the basis of status of the account and as per
their whims within the limited time frame.  The normal loan waiver for
the past three years by banks was to the extent of Rs.25,000 Crores.
While banks could easily accommodate Rs.95,000 Crores on write off,
banks were pleading paucity of funds to meet the Pension burden in
spite of the progressive and cumulative Net Profit figures. A major
portion of the incremental profits of Rs.70,000 Crores  can be
reasonably attributed to my work  as the take over mania of banks and
unethical competition by using the lethal weapon of reduced interest
rate  stopped almost as a result of my  criticisms put forth. Any one
may evaluate whether any individual has made such a fantastic
contribution to the Banks and Financial Sector of the country without
taking any remuneration or compensation, while those responsible for
strengthening banks were fighting with each other and debilitating the
Banks.  The actuarial deficit of Rs.6000 Crores in Pension Fund was a
mere statistical gimmick, a product of those who were paid for it by
It is only after strengthening the banks and the banking system of the
country so much that I made the demand for a fresh Pension Option
which meets with the aspirations of our Great Prime Minister from
legal and socio economic angle.  My work is resulting in redeeming the
deprived social security benefit to more than five lakhs Indian
families from the banking community, presently working as also the
retired who are in utter financial distress.  It is my belief that you
will kindly appreciate it as the most laudable achievement of an
individual - a Keralite - at least in the first decade of the century
benefiting a vast number of families in India  as I have been fighting
relentlessly for it single handed for past nine years.
Thanks and Regards
Yours faithfully,

C N Venugopalan
Ex-Manager,  Union Bank of India
Kesari Junction,
N Paravoor,
Kerala – 683 513
Phone. 0484 2447994 Mob: 9447747994 E-Mail: ceeyenvee@gmail.com


  1. The stated facts are really amazing and eye opener for the govt., iba and bankers. This is a true picture that can't be denied and justice can prevail only if the politics/or diplomacy of self-interest is ignored.

  2. D. Varadaraja RaoMay 21, 2010 at 8:39 PM

    There were umpteen anomalies in the bank wage pact of 1993-95, which introduced pension in banking sector (as an alternative to matching contribution of PF by banks). Some employees could not opt pension due to anomalies / ineligible clauses which were subsequently redressed. Now, the wage pact of 2010 provides for employees / retired people to exercise option to move to pension. The wage pact and also the pension scheme is one and the same for those who opted in the past or those who are opting now. This being the case, penalizing some employees for the simple reason of not opting in the past is unjust. We can not understand the legal validity of executing such wage contracts which are detrimental to certain sections of the employees covered by them. And, every wage pact provides for anomalies (!) leading to further unrest / strikes / legal battles. The employers have to address pension-like service conditions, which are mainly welfare measures, on a separate footing, notwithstanding the financial burden. The wage pacts, which cover lakhs of employees, should appear just, not only being just. Whatever be the financial burden, this being a welfare measure, banks could have borne it. The total burden covering such a large number of banks would not have been beyond their means; but, it would be beyond the means of the employees / retired employees / pensioners.

  3. Sri C.N Venugopalan"s points raised in his letter addressed to the Prime minister of India are unassailable facts and need immediate attention and eventual remedial correction.
    Kudus to sri C.N.V


  4. There is an urgent need to address similar letter(s) on the effective date of Gratuity increase in ceiling to Rs.10 lakhs from 1.1.2006 instead of 24.05.2010, in view of the continuous increase in the prices of petrol, essential commodities, education, health care,housing, and erosion in the value of earlier long term savings like contribution to P.F by employees.

  5. Respected General Secretary


    Now in all the banks new Pension optees deposited their share of 30% amount as funding of Gap, as decided by the unions, in the shape of 56% of CPF and 2.8 times of revised pay of November, 2007

    Kindly ask IBA whether the banks credited their share of 70% on account of Gap in Funding the Pension, to the Pension trusts in Banks. Kindly ask IBA to furnish the dates when they credited 70% share to their Bank's Pension Trusts.

    Friend it is needed to the unions to monitor the working of the Pension Trusts of the Banks. Please also have a constant vigil that now banks are crediting 10% of pay EVERY MONTH TO THE PENSION TRUSTS.

    Please arrest the banks in this respect otherwise they will further show a gap in pension funding and will ask the unions to share the gap by asking the penalties and tolls from the pensioners out of their monthly pension.

    I humbly submit before the learned GS to constitute a sub committee to look after the Pension affairs that banks are adhering the pension regulations meticulously.

    Please take an expert view that whether unions can file a complaint(s) against the banks who are not depositing 10% contributions to Pension every month as per Pension Regulations.

    Please also file complaints against the appropriate Authorities.

    Kindly keep in mind that when unions will demand updating of pension and100 percent DA neutralization on the negotiating table again IBA will demand heavy tolls in the name funding of Gap from the pensioners.

    Kindly ask IBA to guide banks that full pension shall be paid up to the date of payment /netting of commuted pension and pension can only be reduced from the date of payment/ netting of the commuted portion of pension.

    Being oldest union of bankers it is also the duty of AIBEA to approach IBA/Government accordingly. Bankers can only see towards unions in the event of distress. No one can approach the judiciary for all the misdeeds of the banks. Pensioners shall also be allowed to become members of the unions.
    Thanking you,

    With regards,
    Comradely yours

    ashok goel