WHY THE RETIREES ARE MADE TO AGITATE ?
Bank Employees wages are fixed by negotiation between the UNITED FORUM OF BANK EMPLOYEES UNION [UFBU] AND INDIAN BANK ASS...OCIATION [IBA] AND RECENTLY 10TH BIPARTITE SETTLEMENT HAS BEEN CONCLUDED ON 25/05/2015 and Bank Employees are getting 15% rise in their salary. The wage revision is effective from 01/11/2012.
For Central Government Employees salary revision takes place through Pay Commission & Pay Commission also hears the Retirees Representatives & pension benefits are revised upward along with revision of service employees.
The unique feature of settlement In Banking Industry is, issues of the retirees too are discussed with UFBU only & IBA signs the settlement with UFBU for demands of retirees too and that too without hearing retiree organizations and makes it binding on them though Retirees] they are not signatory to settlement & even though settlement is detrimental to the interest of the Retirees.
Click Here To Read More On Pain and Problems OF Pensioners
Pension in Banking
In Banking Industry, Pension scheme was introduced by settlement signed on 29/10/1993 and with few modifications, Bank Employees pension regulation 1995 was notified on 29/09/1995. This regulation is based on pension scheme of GOI /RBI.
The BEPR 1995 was made effective from 01/01/1986 and pension for those retired employees (between 01/01/1986 to 29/10/1993) was revised / updated as per appendix to Regulation 35.
In subsequent settlement in 1997, 2002, 2007 and last one in 2012 IBA DISNOT IMPLEMENT THE PROVISION OF REGULATION 35 OF BEPR 1995 & as a result since last 20 years there is no revision in pension in Banking Industry.
ISSUES / DEMANDS OF RETIREES
1) Updation of pension for all existing retirees and family pensioners.
2) Upgrading the basic pension of all the pensioners at common & uniform index of 4440 points.
3) Periodical updation in pension alongwith every wage revision.
4) Revision in family pension on the lines of GOI / RBI Scheme.
5) Extending 100% DA Relief to all pre November 2002 pensioner.
6) Hospitalization scheme for Retired bank employees.
7) Extending 2nd Pension option to Resignees / CRS employees completing qualifying service.
All the above issues / demands of the retirees were submitted to IBA in the charter of Demand by UFBU in October 2012 i.e. well before the commencement of negotiation.
Accepting the demands of Retirees will not have burden on Banking Industry as Pension Fund is adequate to care of.
On 27/04/2010, 9th bipartite settlement was signed and another pension option to retirees too was extended considering the continued relationship of the retirees with Bank.
On 25/05/2015, IBA signed settlement with UFBU for wage revision for in service employees and also a Record Note [unconstitutional one] on the demand of retirees DENYING TO CONCEDE ANY DEMAND of Retirees stating that“ Contractual Relationship does not exist between Bank and retirees”
The meeting is organized 13/06/2015 , Saturday at Kelkar Hall ( IMA HALL) tilak Road Pune, to discuss / understand the action plan of retiree’s organization to achieve their demands in view of the Record Note signed between IBA & UFBU on 25/05/2015.
10-June-2015 17:43 IST
Proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the proposal to promulgate the Negotiable Instruments (Amendment) Ordinance, 2015.
The proposed amendments to the Negotiable Instruments Act, 1881 (“The NI Act”) are focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the NI Act.
The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.
The clarity on jurisdictional issue for trying the cases of cheque bouncing would increase the credibility of the cheque as a financial instrument. This would help the trade and commerce in general and allow the lending institution, including banks, to continue to extend financing to the economy, without the apprehension of the loan default on account of bouncing of a cheque.
Background
The Section 138 of the NI Act deals with the offence pertaining to dishonour of cheque for insufficiency, etc., of funds in the drawer’s account on which the cheque is drawn for the discharge of any legally enforceable debt or other liability. The section 138 of the NI Act provides for penalties in case of dishonour of cheques due to insufficiency of funds in the account of the drawer of the cheque. The object of the NI Act is to encourage the usage of cheque and enhancing the credibility of the instrument so that the normal business transactions and settlement of liabilities could be ensured.
Various financial institutions and industry associations have expressed difficulties, arising out of the recent legal interpretation of the place of jurisdiction for filing cases under Section 138 to be the place of drawers’ bank by the Supreme Court. To address the difficulties faced by the payee or the lender of the money in filing the cases under Section 138 of the NI Act, because of which, large number of cases were stuck, the jurisdiction for offence under Section 138 has been proposed to be clearly defined. Accordingly, the Negotiable Instruments (Amendment) Bill, 2015 (“the Bill”) in Parliament was introduced in Lok Sabha on 6th May, 2015 and considered and passed by Lok Sabha on 13th May, 2015. However, since the Rajya Sabha was adjourned sine die on 13th May, 2015, the Bill could not be discussed and passed by that House and the Bill could not be enacted.
The Bill provides for filing of cases only by a court within whose local jurisdiction the bank branch of the payee, where the payee delivers the cheque for payment is situated. Further, where a complaint has been filed against the drawer of a cheque in the court having jurisdiction under the new scheme of jurisdiction, all subsequent complaints arising out of section 138 against the same drawer shall be filed before the same court, irrespective of whether those cheques were presented for payment within the territorial jurisdiction of that court.
Further, it has been provided that if more than one prosecution is filed against the same drawer of cheques before different courts, upon the said fact having been brought to the notice of the court, the court shall transfer the case to the court having jurisdiction as per the new scheme of jurisdiction.
In view of the urgency to create a suitable legal framework for determination of the place of jurisdiction for trying cases of dishonour of cheques under section 138 of the NI Act, the Government has decided to amend the law through the Negotiable instruments (Amendment) Ordinance, 2015.
The objective is to ensure that a fair trial is conducted keeping in view the interests of the complainant by clarifying the territorial jurisdiction for trying the cases for dishonour of cheques. The Ordinance is similar to the Bill in the sense that the substantive principle for determination of the jurisdiction of the cases under section 138 of the NI Act remains the same, except that that two distinct situations of payment of cheque (i) by submitting the same for collection through an account or (ii) payment of a cheque otherwise through an account, that is, when cheques are presented across the counter of any branch of drawee bank for payment, are covered under the Ordinance.
Centre okays ₹6,000-cr loan package to help sugar mills clear farmer dues-Hindu Business Line-11.06.2015
The beleaguered sugar industry got a respite from the Centre with a ₹6,000-crore interest-free loan package ostensibly to help mills clear dues owed to sugarcane farmers that currently stands at ₹21,000 crore.
Sugar stocks rallied on the BSE (see box).The BJP-led government appears to have followed the UPA regime’s package of extending interest-free loans up to ₹6,600 crore given last February.
The decision, taken by the Cabinet Committee on Economic Affairs (CCEA) here on Wednesday, is likely to cost the government ₹600 crore, which will be borne by the Sugar Development Fund.
“There has been excess sugar production in the country which has put pressure on domestic prices. The government has sanctioned this loan for farmers. Mills will prepare a list of beneficiaries and the amount will be transferred directly by banks into farmers’ Jan Dhan accounts,” said Nitin Gadkari, Union Transport Minister. “The CCEA has provided a one-year moratorium on the loan and will bear the interest subvention,” he said, adding that the loans will be provided only to mills which had cleared at least 50 per cent of the outstanding arrears before June 30.
Industry not satisfied
According to an official from the Indian Sugar Mills Association (ISMA), the move does little to address the basic issues of depressed prices and surplus sugar. The decision to bear the loan interest for just one year compared to five earlier meant expecting the industry to make profits of ₹6,000 crore in a year’s time which, according to Abinash Verma, Director-General, ISMA, seemed unlikely.
With a 10 million tonne surplus likely at the end of this season, ex-mill prices are ₹10 below the production cost of ₹32-33/kg. “The debt burden of the industry has tripled to ₹36,601 crore in 2012-13 fiscal from ₹11,443 crore in 2007-08. With the increase, 20-25 per cent of the sugar mills may not be able to start crushing operations in the 2015-16 marketing year,” said Verma.
Mills in UP owe the bulk of the arrears, at ₹6,700 crore. “Who will be able to pay back the loan at the end of the year? The conditions, particularly the 50 per cent arrears payment clause, is something very few mills will be able to match,” said an industry source.
Move sweetens sugar stocks
Sugar stocks gained across the board on the bourses on Wednesday after the Cabinet Committee on Economic Affairs (CCEA) cleared a proposal to provide soft loans worth ₹6,000 crore to the industry.
Major gainers include Bajaj Hindusthan (10.05 per cent), Renuka Sugars (7.61 per cent), Balrampur Chini (2.69 per cent and Dhampur Sugar (4.5 per cent).
Other notable gainers include EID Parry (5.88 per cent), Sakthi Sugars (12.66 per cent) and ThiruArooran Sugars (9.67 per cent).
Raghuram Rajan Takes the Fight to Loan Defaulters: 10 Facts-NDTV
Reserve Bank of India chief Raghuram Rajan has given more teeth to banks in their fight against loan defaulters. The central bank on Monday announced new guidelines for recovery of bad loans.
Here is a 10-Point Cheat-Sheet
1) The Reserve Bank of India (RBI) has allowed banks to take control of a defaulting company if a debt restructuring fails and change the management of the company.
2) Under the new rules, banks can convert their debt into equity in case of failure of restructuring plan.
3) Banks under joint lenders forum can become majority owner in the defaulting company by holding 51 per cent or more stake.
4) "As a policy direction, it is a good move. It instills a sense of fear of compliance in the borrowers and the stake for him to perform responsibly increases," says Diwakar Gupta, former MD and CFO of State Bank of India.
5) For the new norms to be applicable, banks need to insert a clause mentioning whether the loan can be converted into equity in favour of the lenders, if the borrower fails to achieve certain targets.
6) The central bank, under governor Raghuram Rajan, has taken many steps to empower lenders recover money from defaulters. Dr Rajan described wilful defaulters as "freeloaders" who needed to be chastised for not honouring their debt commitments.
7) The RBI said that the lenders should divest their holdings in the equity of the company as soon as possible. And the 'new promoter' should not be a person/entity from the existing promoter/promoter group.
8) The new promoters should acquire at least 51 per cent of the paid up equity capital of the borrower company. If the new promoter is a non-resident, and in sectors where the ceiling on foreign investment is less than 51 per cent, the new promoter should own at least 26 per cent of the paid up equity capital or up to applicable foreign investment limit, whichever is higher, the RBI said.
9) Lenders who acquire shares of a listed company under a restructuring will be exempted from making an open offer, the RBI said.
10) Indian banks are struggling under high levels of bad assets. The gross non-performing assets (NPA) is expected to rise to Rs 4 lakh crore in this current fiscal, credit rating firm Crisil recently said.
Nearly 40% of recast loans could slip into NPAs: Icra-Financial Express 09.06.2015
Close to 35-40% of restructured loans could slip into the non-performing asset (NPA) category, rating agency Icra said on Monday.
Close to 35-40% of restructured loans could slip into the non-performing asset (NPA) category, rating agency Icra said on Monday. “We think that the slippages from the restructured advances could be 35-40%,” said Vibha Batra, senior vice-president, Icra.
Batra added that gross NPAs in the system may jump up to 5.9% this fiscal from 4.4% despite economic growth because of lagged recognition of bad assets, which is resulting in slippage of more restructured accounts into dud loans.
“Reported gross NPAs will increase in FY16 with withdrawal of regulatory forbearance for restructured advances from FY16 to 5.3-5.9% by March 2016 against 4.4% as in March 2015,” the agency said in a note. On slippages, Batra said data published by the CDR Cell reveals that 25-30% of loans that were restructured during FY10-12 failed and exited from CDR Cell. “This percentage is lower for restructuring done over last two years, because the accounts may still be under moratorium,” she said.
CDR data showed that, since inception, the cell has approved cases worth Rs 4 lakh crore, out of which recast packages of Rs 56,995 crore have failed and exited the cell. She explained that the accretion to restructured advances has been more than Rs 1.5 lakh crore every year over the last three years; so, these are the accounts that are not reflected in the gross NPAs. “So, if we were to look at the FY15 data, 25% of the slippages came from the restructured book,” she added.
For instance, private sector lender ICICI Bank added NPAs of Rs 3,260 crore in Q4FY15, but out of that, the slippages from the restructured book were worth Rs 2,246 crore.
“Most of the addition that has happened to the NPA during the quarter was mainly on account of the slippages from restructured assets and not really new problem assets,” ICICI Bank MD & CEO Chanda Kochhar had said.
Batra said to see how the pool of restructured advances are going to behave, one should look at the fresh restructuring through the CDR cell, which is a third of the total restructured advances of the banking system. She said fresh NPA generation of the banking system would depend on how issues are addressed in infrastructure, construction and steel sectors.
Banks’ bad loans may increase to 5.9% in 2015-16: ICRA-Hindu Business Line
ICRA Ratings has voiced concern over capital-constrained public sector banks and their capacity to absorb losses amid a rise in bad loans.
“What we are experiencing is a lag in recognition of asset quality stress. Around 25-30 per cent of restructured assets have already slipped into NPAs; now we are increasing our estimate of such slippage to 35-40 per cent from the earlier 30-35 per cent,” Vibha Batra, Senior V-P and Co-Head - Financial Sector Ratings, ICRA, said.
Based on data from 26 PSBs and 15 private banks, ICRA, an associate of Moody’s Investors Service, said it expected the lenders’ gross non-performing loans as a percentage of total loans to be between 5.3 per cent and 5.9 per cent in the fiscal year 2015-16, compared with 4.4 per cent as of March 2015.
In absolute numbers, gross bad loans could rise to ₹4.2-4.7 lakh crore by March 2016 from about ₹3.1 lakh crore a year earlier, ICRA said.
The resolution of structural issues in infrastructure, construction and iron and steel will have significant bearing on slippages. If structural issues in the infrastructure sector are not addressed, slippages from restructured advances could be higher at 40-45 per cent, the agency noted. New rules effective from April this year require banks to make 15 per cent provision for restructuring loans, treating those at par with bad loans. Earlier they were providing 5 per cent for restructured loans.
Stressed loans, including bad and restructured loans, could remain flat at ₹7.4 lakh crore or increase at a slower pace to about ₹8 lakh crore (as much as 10.5 per cent of total loans) in 2015-16, the rating agency said.
Total capital requirement for Indian banks in FY16 is at about ₹80,000 crore to ₹1 lakh crore. Public sector banks account for 80 per cent of the total capital requirement