BOB retirees forum has won an appeal in the Madras High Court for implementation of 50% BP as pension from the date of retirement (instead of May 2005)

We reproduce below  the circular issued by All India Canara Bank Retirees' Federation on the above subject.

Ref. No:55:2011                                                     June 29, 2011

To: All Affiliated Units/Office Bearers/Central Committee Members    

Dear Sir,

DIVISION BENCH OF MADRAS HIGH COURT DELIVERS JUDGEMENT IN FAVOUR OF RETIREES IN RESPECT OF DEVIATION IN BASIC PENSION

Regulation 35 (2) of Pension Regulations states that ….” The amount of Basic Pension shall be calculated at 50% of the average emoluments”

In the VII Bipartite Settlement, a new definition of “Pay for the purpose of Pension” was introduced, in contravention of  Regulation 35 of Pension Regulations stating that  “Pay for the purpose of pension shall be aggregate of pay drawn by the member in terms of Joint Note/VI Bipartite Settlement dated 14-02-2005 and the Dearness Allowance thereon calculated upto Index Number 1616 points in the All India Average Consumer Price Index Numbers of Industrial Workers (Base 1960 = 100) This definition was applied to all the persons who have retired after 01-04-1998. This resulted in reducing the Basic Pension payable to the pensioners from 50% of basic pay to about 41% of Basic Pay.

This anomaly was rectified in the VIII Bipartite settlement/Joint Note which restored the definition of Pay and re-fixed Basic pension of retirees to 50% of the actual average emoluments drawn by the retirees covering all Post 01-04-98 retirees, but only with prospective effect from 01.05.2005.

As this is only a correction of an earlier distortion, retrospective effect has to be given from the date of retirement of the pensioner concerned and the difference in commutation of pension also has to be paid.  Urging these points, Bank of Baroda Retirees in Chennai filed Writ Petition in 2002. Against adverse judgement in this regard, they preferred writ appeal before the Division Bench of Madras High Court which delivered the judgement on 28.06.2011 in favour of retirees, ordering the BOB management to pay the arrears of pensionary benefits from the date of retirement. Full details of judgement are awaited.

Our Writ  Petition on the subject matter is still pending before the Madras High Court and we are actively pursuing the case through our Advocate at Chennai.

We heartily congratulate the Bank of Baroda retirees for their patience and sustained efforts in pursuing the case.

With Warm Greetings,

Yours sincerely,

(S V Sinivasan)

General Secretary 

--
Source -Shri Mohan.V.R.  Chennai

BANKING SECTOR REFORMS – Where the industry heading to?

Mr.Montek sing Ahluvalia, ,the  Planning Commission Deputy Chairman pitches for more financial sector reforms. He agreed with the view expressed in the OECD's latest Ind-ia economic survey that financial sector reforms should be continued.

'On the banking sector, the OECD's (Organisation for Economic Co- operation and Development)second India Economic Survey, which was released today, has recommended that the Government should reduce its stake in public sector banks to 33 per cent, as suggested by the Narasimham Committee report, to make them more dynamic. The report pointed out that the 2000 budget proposed such a measure but in the face of strong opposition from the unions it was not implemented.

“It is high time to push it through now and to go further by
completely selling smaller public sector banks in line with the Rajan Committee (2009) recommendations,” the OECD survey said. The recent performance of these banks suggests that in addition the Government should become passive shareholders and let private shareholders run these banks, the survey said. Reduction in the Government share should also apply to the State Bank of India, it added.

Public sector banks, with reduced Government holding, should no longer be governed by social objectives. The employees of the nationalised banks should have the same employment status as those in private banks.

Reducing the Government shareholding to one-third would be
insufficient. The corporate governance norms too have to be improved so that directors and chief executives are appointed by shareholders and not the Government. Also, restrictions on the voting rights of large shareholders need to be removed, so that ownership can equate with control, the Survey has said.
On the asset management industry, the OECD survey has suggested that the maximum expenses allowed for unit-linked policies should be aligned with those of the mutual fund sector.' 
Source - Business Line - 15th June 2011
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Bankpensioner page on FACEBOOK

Facebook is a powerful social networking platform on the WEB and has become very popular now a days.  
Facebook page for bank pensioners has been launched. Click on the following link to view bankpensioner page on Facebook
 Click on the "Like" box provided on the facebook page.

Pension liabilities force JP Morgan to cut price targets of PSU banks by 10%

MUMBAI: JP Morgan cut price targets for state-run banks by as much as 10% as their pension liabilities may be many times what the market has currently factored in. It downgraded Bank of India to underweight from neutral.
"Optimistic wage inflation and mortality assumptions raise the risk of future provisions, and enhanced funding of plans threaten NIMs," analysts including Seshadri Sen at JPMorgan wrote in a report. "Pensions are putting pressure on PSU banks' poor cost-efficiencies and hampering competitiveness. Cheap valuations discount this only partially - prospects of negative surprises.''
 

Many analysts and investors are turning negative on banks mainly due to rising interest rates that could lead to higher bad loans. For state-run banks, the pension liabilities could be bigger. State Bank of India shocked the market with a 99% drop in earnings in the fourth quarter of last fiscal, partly due to such provisions. The BSE Bankex has fallen nearly 7% since January while the benchmark Sensex fell 10% during the same period.

"We think the current assumptions ignore the impact of the bi-decadal wage increases from collective bargaining, probably because it's not a certainty" said Sen. The agreement with the unions expires in Sep 2012, and another lumpy provision is likely in FY14. PSU banks and unions renegotiate wages every five years - wages expanded by 18% during the previous settlement for 2007-12. The report also says, with non-pension benefits (post-retiral medical, for one) adding to the pressures, the recent pension changes have blunted the cost efficiencies. "We estimate pension liabilities to expand at 20% against the discount unwind of 8%, with the risk of periodic capital shocks."

The provisions will be uneven, and we estimate that obligations will have to rise by 20% per annum for the next five years to adjust to realistic assumptions. Also, the provisions for state-owned lenders have risen consistently for the past seven quarters as they are migrating to a more stringent computer-based system of identifying bad loans and have set aside more money for restructured loans. PSU banks are more at risk because of their comparatively high exposure to small agriculture loans below 50 lakh which can register as NPAs if not repaid for more than 90 days.

Source - Economic Times dtd 2nd Jun 2011

AIBOC letter to IBA regarding pension to officers retired under VRS scheme of bank or retired under exit option scheme by subsidiary banks

We reproduce below the letter by Shri G. D. Nadaf, General Secretary AIBOC

Quote

No.1452/229/11                                                   30.05.2011

To, 
Shri M.D.Mallya, 

Chairman,
The Indian Banks’ Association,
World Trade Centre Complex,
Centre 1, 6^th Floor, Cuffe Parade, 
MUMBAI – 400 005.

Dear Sir,

PENSION TO OFFICERS WHO “RETIRED UNDER THE VOLUNTARY RETIREMENT SCHEME OF THE BANK” OR “RETIRED UNDER EXIT OPTION SCHEME” INTRODUCED IN SUBSIDIARY BANKS

         We draw your kind attention to our letter No. 1452/156/11 dated 09.03.2011 wherein we have made out a case for granting another option to join the Pension Scheme to those officers who sought Voluntary Retirement from service of the Bank as provided in OSR 19(1) to 19(7) and who did not opt for pension earlier due to various reasons. As you have not responded positively to our earlier letters i.e., Letter No. 1452/302/10 dated 28.08.2010 & Letter No.1452/482/10 dated 29.12.2010, we were compelled to invoke the provisions under clause No.14 of the Joint Note signed by IBA and AIBOC and other officers’ organisations on 27.04.2010. But to our chagrin neither you have furnished us your points of view on the issue as to how and why the above category of officers have been denied the opportunity to join the Pension Scheme nor have arranged for a Meeting to resolve the issue in an amicable manner to the satisfaction of all concerned.