Letter to Shri O P Bhat Chairman IBA

C N Venugopalan
Ex-Manager, Union Bank of India
Nandanam
Kesari Junction,
N Parvoor,
Kerala – 683 513
Phone. 0484 2447994 Mob: 9447747994 E-Mail: ceeyenvee@gmail.com
No.20100619 19th June, 2010

Shri. O P Bhat,
Chairman,
Indian Banks Association,
Mumbai.

Respected Sir,

Good Morning

I introduce myself as an Ex-Manager of Union Bank who went out through VRS in 2001. We have met once at Guruvayoor when SBT offered the "Ekadasi Vilakku" to the Lord.

I am immensely glad IBA has elected you as its Chairman. Hearty congratulations to you on being enthroned in the office. The installation of the great banker of the country in the pinnacle position gives hopes for a thorough revamping of the policies of IBA which had been bad and unfair. It is my wish that banks in India may set the house in order before venturing out to make the entire nation better. I thought of addressing to you since I am sure that your deft hands will fine tune the functioning of IBA with good amount of dexterity to make legality and righteousness rule in the banking scenario for the good of the industry and to the people who toil all along for it and ultimately take banks in India to glory. Let your tenure get inscribed in history in letters of gold for washing away the past sins of IBA in perpetrating inequality among the work force in the key industry.

Past experience had been that banks that evolved and function entirely on the premises of the law of the land were found to be flouting fundamental laws with utter disregard to them, especially in the matter of compensation for labor. There was a time when talents from Universities, Colleges and Civil Service took up careers in banks for better compensation. Pillai Committee Recommendations were implemented in banks in 1979 to stagger the compensation by keeping it on a level not exceeding that of the Class I Officers. During the past three decades, employment in banks lost sheen entirely as pay packets in banks shrinked in relation to Government offices. Besides, anomalies of a glaring nature continued in the compensation paid in different banks. Some instances are cited below for your immediate attention and rectification:

1. SBI and Allahabad Bank pay to its employees three retirement benefits whereas rest of the public sector banks pay only two benefits. In other PSBs, apart from gratuity, only Pension or PF was so far given. This challenges the directives of state policy enshrined in the Constitution of India that guaranteed "Equality" treatment of people of all manners alike and also challenge the accepted dictum "Equal Pay for Equal work".
2. Though the recently concluded ninth Bipartite Settlement provided for a fresh option for Pension to all those whom banks deprived the benefit, a number or irrational conditions have been included for extension of the benefit. While addressing one anomaly, IBA fielded a multiplicity of fresh anomalies opening a large field for litigation.
3. Raising a levy for granting pension is like making the employee himself pay his pension. Pension is a legitimate establishment expense of the employer which has to be borne by the employer and not by raising 2.8 times pay of the working employees and 56 percent of CPF from the retired. It is a shame to the banking industry. The Apex Court has acknowledged Pension as a right akin to Fundamental Right of the citizen guaranteed by Constitution.
4. The formula for taking back CPF with 56 percent of it uniformly from all retirees without reckoning the date of retirement makes the entire process irrational. The precedence has been that all those who retired from 01 01 1986 onwards were given coverage of the Pension Scheme commissioned in 1995 by taking back the CPF together with 6 percent simple interest. A person who has retired in 2000 and enjoyed the benefit of the money as also a person who retired any time before November, 2009 will have to pay a uniform 56 percent which does not apply to reasoning. The latter will be put to great penalty on account of the whimsical decision as the CPF amount is more in their case and the benefit of retention of money is lesser or nil.
5. Commutation of Pension has to be invariably reckoned on the basis of age on the date of retirement and not on the basis of the age at the time of option. Whereas the benefit has been given to identical people who retired earlier from Pension segment, denying it to the counterpart poses a challenge to law.
6. As per the absurd settlement, Pension from the date of retirement to the arbitrarily fixed date of 27th November, 2009 will not be payable to those retired up to October, 2009. This is totally illegal. In fact they are eligible to get monthly Pension together with interest on each payment. Since the pension payable has been denied and detained by banks and utilized for lending activity, banks have made substantial undue and illegitimate income out of the amounts. Now that more than 10 years have elapsed after pension amounts accrued to them, reckoning the interest factor, banks have gained more than the gross arrears payable to the retired employees by this time.
7. Resigned employees are not recognized for Pension in the Agreement. Minimum qualifying service ought to be the sole criterion for paying Pension and mode of exit (unless it be on disciplinary grounds) should be irrelevant. "Resignation" is real Voluntary Retirement in the strictest meaning of the term in sharp contrast with the Special Voluntary Retirement Scheme which was an induced one through incentives offered. It is strange that even as VRS people who got the special package are considered for Pension, resignees are left out. Their inclusion is a must for removing the controversy and for avoiding time and expense on unnecessary litigation. This category comprises people to whom banks denied VRS citing exigency of service and hence were compelled to take exit through resignation for personal reasons. They have not committed any sin. Forgetting their contribution to the industry is improper and they should be encompassed under Pension Scheme in all fairness. They should not be penalized for the defective drafting and implementation of the Pension Regulations. It anyone deserves punishment, it is the mentally retarded experts who lacked essential faculties of mind while drafting the Magna Carta of Pension. They just copied down things from some other pension regulations without applying their minds and reasoning.

8. Not but the least, there had been enormous delay in implementing fresh option, though primary matters were sorted out as late as on November 2009. Extension of option is prolonging even after six months from then resulting in a hue and cry among the victims. Though an earlier MOU was reached on 28th February, 2008 between IBA and Unions to clear the item within three months from then, it got breached. More than and two years passed by quietly without anything happening. The sufferings of those who are stranded in life amidst spiraling costs continue indefinitely as they are devoid of Pension, the pittance payable to them for subsistence on cessation of employment and regular income.

Banks in India appeared to be all set to secure the award for the "worst employer in India", should there be one, by exploiting the workforce through bonded labour and lower compensation. The banking equations now formulated for Pension Scheme are queer and proclaim lack intelligence and reasoning altogether on the part of those who evolved them. The modalities prescribed go to challenge the Constitution and Law of the land. It is my sincere wish that IBA, under your able guidance function in tandem with the provisions of the Constitution and law of the country and rectify all past mistakes in a scientific way for commanding the respect of the entire communities in India and especially of the banking community. This is my expectation from the great seasoned banker of the nation.

I expect a line in reply acknowledging this communication and pointing out the areas, if any, where I am wrong. May God bless you to redeem the sanctity of the Indian Banking System by establishing perfect righteousness in all spheres.

Thanks and Regards,

Yours sincerely,



C N Venugopalan