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C N Venugopalan (Former
Director, State Bank of Travancore and Ex-Manager, Union Bank of India)
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“Nandanam”, Kesari Junction, North Paravoor, Kerala -683 513 , e-mail:ceeyenvee@gmail.com,
Mob: 9447747994
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No.170618 18th June, 2016
His Excellency the President of India,
Rashtrapathi Bhavan
Rashtrapathi Bhavan
New Delhi –
110 004
Most Venerable President,
SAVE BANKERS,
SAVE INDIA, SAVE DEMOCRACY, SAVE THE CONSTITUTION
I chose to write to you as no one
else is to be appraised when the Constitution of India receives a jolt and is
in peril. In pre-independent India, the
British plundered the subjects of India as a whole. In democratic India, the British are
incarnate in the bureaucrats that run the government. The plundered are the
bankers who implemented the financial policies of the government. The sanctions of the legislature to them are deprived
in a heinous way, in derogations of the statute. The victims are senior citizens in the
evening of their lives, who deserve empathy of the government. Their wherewithal viz. pension given for making
both ends meet is looted by the “state” in derogation of “Directive Principles of State Policy” and of the
Regulations put in place by the Indian
Parliament, thus tormenting the very democratic fabric in a way tarnishing the
very image of the government. Indian Banks’ Association ( IBA) is perpetrating
this atrocity when pension and pension increase can be given with zero cost to
the banks and to the government.
The Banking intelligentsia comprising the heads of Indian banks appears
as having no grey matter in their skulls and have metamorphosed into criminals to loot the workforce their
wages and the former workers, their deferred wages and to detain it, thus snatching away their bread in a
meaningless way. The heinous crime is staged when there
is ample money in the Pension Funds of all banks, which is enough to pay three
to four times the present pension to all the pensioners. The retired bankers are the people who acted
as conduit for the overall progress of all neglected sectors and now they are
neglected by the MOF Headed by the Minister who took oath in the name of the
Constitution to treat all manner of people alike. Indian Banks’ Association is flying above the
Indian Parliament, overriding the
statutes it enacted by it at the behest of the Ministry of Finance, giving rise
to a catastrophe in democracy. The
entire matter assumes greater significance in the wake of the OROP for the defense
pensioners.
I write this for the sake of about
five lakhs plus bank employees and about one lakh retired bank employees who
lighted up the whole of India and yet denied their statutorily vested benefits
in a way axing the fundamentals of Indian democracy. The latter are pushed to the corridors of
various High Courts in the evening of their lives as their right to live viz.
pension is denied through derogation of the Pension Regulations, 1995. All of them are in cross roads, when their
own huge money is unlawfully detained by the Public Sector Banks which are
“state” within the meaning assigned to them under the Constitution of India.
Short Recital:
The
Bank Employees’ Pension Regulations, 1995 was put in place as a subordinate
legislation pursuant to Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970/1980. The Act gave a guarantee to the employees
of the banks which were nationalized in 1970 /1980 by way of protection of the
benefits they were enjoying previously. The Regulations were
statutory and carried the approval of the Legislature as it evolved pursuant to
section 19 of the Act. From the very
inception, they were breached and the beneficiaries are denied of the
statutorily vested benefits forever, thus resulting in a huge influx of writ
petitions across the country in various High Courts. The victims are
senior citizens who sacrificed their whole lives in the process of nation
building. They are pushed to the corridors of Courts in the evening of
their lives. This heinous crime is staged when pension and updation of
pension can be given to them with no cost to banks and to the government.
Payment of pension is from the Pension Fund created out of the statutorily
deferred wages of employees, which banks were to pay previously pursuant to EPF
and Misc. Provisions Act, 1952. The Pension Funds of all Public Sector Banks
have money enough to pay three to four times the present pension to all their
pensioners. Yet revision in pension is denied to them senselessly. The
Minister of Finance who has taken oath to act with commitment to the
Constitution and to extend equal treatment to all manner of people is also
paying no heed to the same while neglecting the cardinal issue with no empathy
and concern to the senior citizens of banks who gifted a resilient banking
system for the nation.
Tracing History:
During
the 1970s, Bank Officers had an initial pay of Rs.500/- when the government
officer was getting Rs.450/- only. The
higher pay was a consideration for extended working hours and job risks of a
financial nature. This, however, created an ethnic prejudice in the minds of
government officers who were overseeing banks after nationalisation as they are
the masters when banks came under government ownership. This paved way to
implementation of Pillai Committee Recommendations in banks to peg down bank
pay on par with government pay. Though parity of reasoning required keeping
bank pay at least at the level of government pay, it is now lesser by
Rs.30,000/- to Rs.40,000/- a month than the other. Bank employees work
for six days in a hectic mode and are less paid while the government officers
worked for five days leisurely and are highly paid. With nationalisation,
bank employees are quasi-government employees whose pay bills are to be foot by
the government. However, since bank pay is met out of the profits of
banks, the bank employee meets his own salary bill without causing a burden to
the exchequer. The government implements all its financial policies
through banks. In spite of everything, the bank employees are given a
step motherly treatment. Bank pensioners are worst hit as
their pension is linked to the pay of employees on rolls and the same is not
periodically revised with each Bipartite Settlement unlike in the case of
government pension which is revised with implementation of each Pay Commission,
though bank pension was agreed to be on the same pattern of Central Civil
Pension.
Irony in the matters:
01. Pension and increase in pension
are denied in derogation of Pension Regulations when the Pension Fund of all
banks have resources enough to pay three to four times the present pension to
all the pensioners in the industry.
02. Payment of Pension does not
have any impact on the profits of banks as pension is paid out of specific
Pension Fund created for the purpose. The government also does not have
to make a budgetary allocation for it. Yet due pension and increase from time
to time to beat inflation is denied in a meaningless manner.
03. Pension Fund is created out of
the statutory contribution to EPF which was payable by banks pursuant to EPF
and Miscellaneous Provisions Act, 1952, prior to notification of Pension
Regulations on 29 09 1995. It is thus the deferred wages of the employees
and not the money of banks.
04. To cite a simple example, Union
Bank of India had a growth in Pension Fund to the tune of Rs.6,574.01 Crores
during five years ending 31.03.2015. It raised unlawful contribution to
the tune of Rs.134.43 Crores into its Pension Fund from beneficiaries of
Pension Fund on the basis of the Joint Note on Pension. This is in
derogation of regulation 5 (3) and 11 of Pension Regulations, which make the
bank the sole contributor to Pension Fund. The Bank can refund the
amount with compound interest within an outlay of Rs.300.00 Crores. Compound
interest is payable since the money was earning such income by way of interest
on Pension Fund investments to the bank / Pension Fund. After paying this
also there is a residue of Rs.6,204.01 Crores which can foot payment of arrears
to all the 3,106 retired employees at Rs.2.02 Crores per capita. The actual
arrears payable per capita would be in the range of Rs.15.00 to Rs.35.00 lakhs
only. Even after that the Pension Fund of the Bank will be resilient.
Similar is the case with other banks also.
05. The annual growth in Pension
Fund of the Bank is four times the amount now being paid as pension to all the
pensioners. The pay out of benefits was a mere 23.25 percent of the
annual growth for 2014-15 and will be lesser in the following year. (Details
being collected as it is not available in the Annual Report)
06. The Pension Fund has the sole
purpose of paying pension/family pension and it cannot be utilized for any
other purpose by operation of regulation 5 (2). The Pension Fund need not
service employees recruited after 31.03.2010 who are covered by the
PFRDA Scheme. Mortality of pensioners is reducing the pension
liability.
07. The case with all other public
sector banks is also similar. All of them can foot two to three times the
present pension to all their pensioners. It is stupendous stupidity of an
astounding nature that public sector banks are flouting Pension Regulations and
looting the retired senior citizens, their legitimate statutory entitlements,
bringing shame to the democratic fabric of the nation, pushing the hapless bank
pensioners into the netherworld.
08. Non-payment of the statutorily
vested benefit is a serious crime and when government is also indulging in it,
one fails to know what the independence of the nation and democracy means.
When the makers of law who are to administer them and have to be
compliant with them are acting in derogation of them, it creates a
catastrophe. It is an insult to the Constitution by the Executive as they
are not respecting the Legislature, which is the apex institution in a
democracy. When an employee who has served the bank for 15 to 30
years is deprived of his pension to the tune of Rs.15.00 lakhs to Rs.30.00
lakhs by the employer, what else needed to establish practice of bonded labour?
The
derogations of the Pension Regulations and its bad implementations are as below:
A. While
Pension Scheme was implemented, options for pension were taken on the basis of
draft Pension Regulations which did not contain the clause for forfeiture of
past service for participation in strike. There were only 28 Pension
regulations in the draft regulations circulated.
B. The
Pension Regulations notified on 29.09.1995 contained 56 regulations, including
a clause for forfeiture of entire past service for participation in strike
under regulation 22 (4) (b). The clause was rigorous as it would deprive the
employee opting for pension after surrendering his EPF contributions to the Pension
Fund, Pension as also EPF if his past service is forfeited. It was discriminatory
also as it would not affect the terminal benefit of one who remains in
CPF and take away the terminal benefit of one who opts for pension.
C. The
extraneous clause infused in the Regulations prompted employees who opted for
pension to take exit and those who had not acted on the basis of the draft, not
to join the Pension Scheme. It kept about 6 lakhs of employees (nearly 70
percent) outside the purview of the Social Security Benefit of Pension.
D.
After
infusing the rigorous clause for forfeiture of past service, Union Bank of India, issued a circular letter 0n 29.12.1995 on a
mere advice from Indian Banks’ Association permitting employees to revoke the
option exercised prior to 29.09.1995, the date of notification of the
regulations, if they wanted to do so for
any reason. But in terms of the draft regulation 4 (2) as also of the adopted
regulation 4 (2), an option for pension, once exercised, was final and
regulation 3 (9) of the Pension Regulations had deemed the earlier option to be
an option for the purpose of the Regulations.
The Staff Circular through which the Regulations were published among
employees on 26.10.1995 had also stated that those who had opted earlier need
not opt again and that the option, once exercised was final and irrevocable.
Having said this on 26.10.1995, all options had the effect of having been
exercised on that date and no option for pension was revocable. Yet the bank revoked the earlier options of
many employees in derogation of regulation 4 (2), which was ultra vires
since regulation was statutory and it remained intact.
E.
When
the government later directed Indian Banks’ Associations vide communication F
No.4/8/4/95-IR dated 24.12.1997 to delete the clause for forfeiture of past
service from regulation 22 (4) (b) and to give effect to it, though banks
amended the regulation, they did not carry out the government directive to give
effect to it by extending the mandatory option for pension which was to be
given in the wake of the radical change in offer terms of option.
F.
As
an illustration of the non-compliance with the direction, it can be seen that
Union Bank of India made the following on 2nd January, 1999 and published in the
gazette dated 27.02.1999 as infra.
(1) These
regulations may be called Union Bank of India (Employees') Pension
(Amendment) Regulations, 1998.
(2) They
shall come into force on the date of their publication in the official Gazette
2.
In the Union Bank of India (Employees') Pension Regulations, 1995, for clause
(b) of sub regulation 4 of regulation 22, the following clause be substituted,
namely:-
"(b)
Nothing in clause (a) shall apply to interruption
caused by resignation, dismissal or removal from service".
G.
The
above amendment was invariably to be carried out with retrospective effect
since the intention of the government directive was to extend a fresh option to
those who could not opt earlier when the deleted clause was there in the
regulations. It was to have retrospective effect to serve the real
purpose. Since the same was carried out with
prospective effect from the date of notification in gazette, it served no
purpose at all and got confined to mere amendment of the regulation with no
benefit to anyone.
H.
If
the above amendment was given effect to, it would have resolved more than 90 percent
of the problems in the implementation of the Regulations. If the Union
Bank had done it that time, it would have resulted in a huge Pension Fund at
least to the tune of Rs.24,000 Crores in the place of the present Rs.7,732.57
Crores (Rs. 1,158.56 Crores plus growth of Rs.6,574.01 Crores in
five years up to 31.03.2015). By not
giving effect to the direction of the government, the bank spoiled about
Rs.15,000.00 Crores to the detriment of the economy and the employees.
The amendment had no purpose and the entire work and time consumed at
Parliament level for the process was a sheer waste.
I.
Not
only that the amendment was not given effect to at the appropriate time, but it
was clandestinely kept in camera and was advised to the beneficiaries after a dubious
and disastrous delay of 43 months on 8th October, 2002 only, that too without
extending the option intended thereby. Similar exercise was done at the
behest of IBA in other banks too which also deceptively did not extend the
option for pension to the employees.
J.
The
option intended through the government direction was later given after a decade
through a Joint Note dated 27.04.2010 only; on conditions that derogate the
Pension Regulations which cannot have legal sanctity for reasons infra:-
a)
The
Joint Note envisaged payment of 56 percent of EPF paid at the time of the
retirement in the case of retired employees on its date and at 2.8 times pay
for November, 2007 to Pension Fund of banks, in the case of employees who
exercise option through it. This contribution prejudice regulation 5 (3)
and 11 which make the bank the sole contributor to the Pension Fund.
b) The
Joint Note prescribes payment of pension to the retired employees from
27.11.2009 which prejudices regulation 52 (1) that stipulates payment of
pension from the date following the date of retirement to the employees.
c) No
one can be granted an option after 26.01.1996, since regulation 3 mandates
exercising of option within 120 days
from the notified date of 29.09.1995 and regulation 3 is remaining
intact. Pension paid out of Pension Fund to the beneficiaries of the Joint
Note is misappropriation of Pension Fund Trust unless regulation 3 is amended
with retrospective effect.
d) The
Joint Note is in the form of amending the Pension Regulations to which they
relate, viz. regulation 5 (3), 11 and 52 (1). The due procedure for
amending the Pension Regulations through compliance with section 19 (4) of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980 is
stipulated as clause 10 of the Joint Note. IBA was to forward a copy of
the Joint Note together with a copy of the Pension Scheme to the
Government for its approval and further action for compliance with the due
procedure in law. In terms of section 19 (4) of the Act, it had to
be done as soon as the amendment was framed on 27.04.2010. But the due
procedure is not yet done, albeit lapse of six years, making the Joint Note
void and obliterated.
Clause
10 of Joint Note:
“The
conclusions arrived and recorded in the above Clauses together with a copy of
the Scheme of Pension will be forwarded to the Government by the IBA for their
approval and further action in terms of Section 19 of The Banking Companies
(Acquisition and Transfer of Undertakings) Act, 1970/1980 by complying with the
procedure for amendment of the relevant Pension Regulations”
Sec.19
(4) of the Act, referred supra in covenant 10 of the Joint Note :
“Every
regulation shall, as soon as may be after it is made under
this Act by the Board of Directors of a corresponding new bank, be forwarded
to the Central Government and that Government shall cause a copy of the
same to be laid before each House of the Parliament, while it is in session,
for a period of thirty days which may be comprised in one session or in two or more
successive sessions, and if, before the expiry of the session immediately
following the session or successive sessions aforesaid, both Houses agree in
making any modification in the regulation or both Houses agree that the
regulation should not be made, the
regulation shall thereafter have effect only in such modified form or be of no
effect, as the case may be; so however, that any such modification or
annulment shall be without
prejudice to the validity of anything previously done under that regulation.”
The
Joint Note disqualifies itself from being laid in Parliament on account of the
prejudicial covenants and cannot be laid “as soon as may be after it is made”
forever now on account of the long span of time elapsed so far after its
formation.
It is on the basis of the void
Joint Note that the public sector banks denied pension to the retired employees
for varying periods, say from one month to 10 years from the date or retirement
to the arbitrary date of 27.11.2009, which was again irrational and
discriminatory and levied an unlawful contribution to their Pension Funds.
Public sector banks thus looted the retirement benefits of the employees who
worked for them and for the nation.
K.
Pension
in banks was agreed to be exactly on the pattern of the Central Civil Pension. The stipulation in regulation 56 on the
caption Residuary Provisions is as infra:
“in case of doubt in the matter
of application of these regulations, regard may be had to the corresponding
provisions of Central Civil Service Rules, 1972 or Central Civil Services (Commutation
of Pension) Rules, 1981 applicable to Central Government
employees with such exemptions and modifications as the bank, with the previous
sanction of central government, may from time to time, determine”.
IBA, the representative body
/ banks have not so far sought and obtained permission for any exemptions
and modifications, it is
limpidly in derogation of regulation 56 that updation of pension is denied so
far to the bank pensioners for about 20 years of the inception of the Pension
Scheme.
L.
Section
10 (7) of the Banking Companies (Acquisition and Transfer of Under-takings)
Act, 1970/1980 permits the Board of a corresponding new bank (nationalized
bank) to declare a dividend and to retain surplus profits as reserves in its
books only after making due provision/payment to superannuation funds, inter alia, all establishment
expenses. Given that all public sector banks had been declaring and
paying dividends to the government which is applied to part finance the payment
of higher salaries and pension to the government employees, the process was
akin to robbing Peter to pay to Paul which is against the Directive Principles
of State Policy enshrined in the Constitution.
M.
Shri.
P Chidambaram, Former Finance Minister who was mostly in control of MOF was
reportedly announcing that the profits of banks are not paying wages to the
employees which meant that it had other purposes like changing the logos of
banks like Union Bank of India, Bank of Baroda, Canara Bank etc. in a stroke
and awarding the work to a single firm viz. Boston Consultants in which his son
Mr. Karthi Chidambaram had specific interest without knowing the legal position
that salary and superannuation funds have a prior charge over the profits of
banks. When the present incumbent Shri. Arun Jaitley and his
Government that have given assurance to the electorate to remedy the evils done
to the subjects by the predecessors are following suit while reasonable salary,
pension and pension revision can be granted with no impact on the profits of
banks and burden to the government, one has to make a loud cry “Save
Bankers, Save India, Save Democracy, Save the Constitution”.
N.
The
Public Sector Banks that allows the King Fisher in the Rajya Sabha to swoop
into the banking pool and carry the treasures on its beak so easily remaining
frugal in paying adequate compensation to the work force in the industry and
creating a slave dynasty there is ironical. The one time alluring
industry that implements all financial policies of the government is now facing
a talent drain as it is now the last choice of jobseekers.
O.
The
utter lawlessness in governance and implementation of Pension Regulations can
only bring shame to the great democratic nation and to its magnificent
Constitution. It tarnishes the very
image of the government as there is huge influx of writ petitions from the
victims which results in wastage of the precious time of the judiciary.
I feel that it will be a big
step for restoration of fundamentals of democracy and of the magnificent
Constitution of India if the statutorily vested benefits unlawfully detained by
Public Sector Banks in the Country are caused to be released to the hapless
bank retirees, mostly of whom are senior citizens in the age group of 60 to
80. I therefore earnestly request to you
kindly direct MOF, GOI to ensure compliance with the following Pension
Regulations in letter and spirit so that the derogations are done away with:
I.
Regulation 4 (2) - Options for pension, once
exercised shall be “final”.
II.
Regulation 5 (3) & 11- The Bank shall
ensure that sufficient sums are placed in Pension Fund to enable the Trustees
to pay the benefits under the Regulations. This will facilitate repayment of the
unlawful contributions and interest to the beneficiaries.
III.
Regulation 52 (1) – A pension other than
family pension shall commence from the date following the date on which an
employee retires.
IV.
Regulation 56 - In case of doubt, in the
matter of application of these Regulations, regard may be had to the
corresponding provisions of Central Civil Service Rules, 1972 or Central Civil
Services (Commutation of Pension) Rules, 1981 applicable for Central Government
employees with such exceptions and modifications as the Bank, with the previous
sanction of the Central Government, may from time to time determine.
(So
far, no exceptions and modifications have been permitted by Government from the
above . This makes it limpid that in terms of regulation 56, bank pension
scheme ought to be on the same lines as of government pension scheme and revision in Basic Pension with each
Bipartite Settlement as in the case of Central Government Pension which is
revised with implementation of each Pay Commission has to be there for bank
pension. If not, it is apparent breach
of the regulation)
It was far away from my
intentions to invoke the names of individuals, but the same had to be done for
the purpose of proper statement of facts. The purpose is only to present
facts in their real perspective. A mere compliance with the
regulations above will resolve all issues in a stroke and relieve judiciary
also substantially as a number of writ petitions will lose raison-d’etre.
With respectful
regards,
Yours sincerely,
C N
VENUGOPALAN
9447747994
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