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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 Phone: 0484
2447994 Mob: 9447747994
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No.160328 28th March, 2016
TO: ALL MEMBERS
OF RAJYA SABHA & LOK SABHA
Most Venerable Member
of Parliament,
INDIAN BANKS’ ASSOCIATION, A FORUM OF BANKERS, FLYING ABOVE
INDIAN PARLIAMENT
Indian Parliament has enacted
the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980
and sanctioned the Pension Regulations, 1995 pursuant to it as a subordinate
legislation for the Indian Public Sector Banks. They constitute beneficial legislation meant
for the employees as the target group.
When Pension Scheme was
launched in banks in 1995 with the nod of the Parliament, banks kept majority
of employees outside it through bad
implementation of Pension Regulations under the aegis of Indian Banks’
Association by infusing a clause for
forfeiture of past service for participation in strike in regulation 22 (4)
(b), contrary to the scheme originally approved.
The government vide F
No.4/8/95-IR dated 24.12.1997 directed the IBA to amend regulation 22 (4) (b)
which prevented the employees from joining the scheme and to give effect to
it. Thought the regulation was
amended, banks did not give effect to it by not extending the option to those
who could not opt when the regulation contained the forfeiture of service clause that would deprive the beneficiary of
the new benefit of pension as also the erstwhile benefit of CPF, if they opted
for pension by surrendering their CPF to the Pension Fund of banks. Banks thus clandestinely overruled the
direction of MOF without implementing it in letter and spirit.
Consequent on pressure from
various quarters, IBA signed a Settlement on Pension viz. Joint Note on 27.04.2010
extending fresh option to those who missed it earlier. But the Joint Note was in derogation of the
subordinate legislation viz. Pension Regulations, 1995 put in place by the Parliament and took away
the benefit of pension partially from the employees, thus embezzling the
pension of the retired employees and making the scheme irrational in the
following ways:
1. Regulation 52 (1) approved by the
Parliament sanctioned pension from the date of retirement of the employee. IBA, through the Joint Note, denied pension
till 27.11.2009 to employees who retired prior to that date in conflict with
the regulation. Some lost their pension
for one month to 12 years. Employees who
retired after 27.04.2010 lost nothing.
2. Regulations 5 (3) and 11 of Pension Regulations
fixed the Bank as sole contributor to the Pension Fund. Through the Joint Notes, IBA made banks
collect CPF paid on retirement with 56 percent of it from the retired and 2.8
times pay for November, 2007 from employees on rolls for giving them pension/coverage
of pension in derogation of these regulations.
The contribution from employees had the effect of the employees
themselves paying their pension, which is ironical and alters the very concept
of pension.
Section 19 (4) of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970/1980 stipulates that any
modification/amendment to the Regulation ought to be placed before both the
Houses of the Parliament for a period of 30 days as soon as it is made for
their nod and will have effect only in the way in which it is approved. The Joint Note dated 27.04.2010 has not been
placed in the Houses of the Parliament albeit lapse of six years, making it obliterated, null and void for
non-compliance with the due procedure in law stipulated under section 19 (4) of the Act. IBA, with the help of MOF implemented the
Joint Note without sanction of the Parliament, which was essential, thus
overruling the Indian Parliament. In
terms of section 19 (1) and (4), banks are prohibited from making a regulation
which prejudices what is done earlier under it.
Since the conclusions in the Joint Note are prejudicial to the relevant regulations, it cannot be
laid in the Parliament.
It is on the basis of this void and illegal document
that banks denied pension to the senior citizens who sacrificed their heydays
for making them what they are and raised an unlawful contribution from them.
Against the National Litigation Policy, the hapless bank retirees are pushed
into the netherworld by making them wander in the corridors of various
courts. The contribution raised in
derogation of regulation 5 (3) and 11 results in a fraudulent collection which
is quite unbecoming on the part of banks that have to act with integrity. Elements of integrity and trust of banks are
very much under threat and public money held by banks is in peril when banks
behave like this even to their own employees.
Similar manner of people are extremely discriminated
when some of them were paid pension without any contribution. Likewise, pension
for a period was denied to some while it was paid in full to others. The Joint Note was totally irrational and
opposed to the directive principles of state policy on account of
discrimination. It was implemented
without the requisite sanction of the Houses challenging the privilege and
dignity of the Parliament, thus bringing shame to the nation by tormenting its
democratic fabric creating a competing regime by IBA.
It is also pertinent to say that though Pension Scheme
in banks was agreed to be on the lines of Central Government Pension as
indicated by regulation 56 and ought to
be updated with each pay revision as in
the case of pension revision to Central Government employees with implementation of each Pay Commission Reports. But bank pension has never been updated since
its inception in 1995, thus defeating the very purpose of pension in conflict
with the sanction of the Parliament.
The actions can be termed as nothing other than
stupidities as payment of pension being
out of the Pension Funds has no
impact on the profits of banks and the government does not have to make any
budgetary allocation for it, more so because Pension Funds of all banks are
abounding in resources and can foot three to four times the present pension
paid by banks. Pension Fund is built
up of contributions which banks were to make to CPF under the Employees’
Provident Fund and Miscellaneous Provisions Act, 1952 and is hence deferred
statutory wages of the bank employees and not the money of the banks. The sole purpose of Pension Fund is paying pension / family pension and employees
recruited after 01.04.2010 are not to be serviced out of Pension Funds as they
are covered b y PFRDA Scheme. Non-payment of due pension and revision from time
to time is denial of wages and embezzlement of money of the work force with no
purpose.
Bank officers were having pay of Rs.500/- in 1976 while
government officers were drawing Rs.450/- per month. Service Regulations were brought in 1979 to
bring about equality in pay and pay in banks were staggered at Rs.700.00 p.m.
through implementation of Pillai Committee Recommendations w.e.f.
01.07.1979. Though parity reasoning requires
keeping the bank pay at least on par with that of the government officers, it
is now lesser by Rs.30,000/- to Rs.40,000/- per month than government pay. They are unnecessarily discriminated.
Bank employees are quasi government employees by reason
of nationalization and government ownership of banks. Their salary bills are thus to be paid out of
the exchequer. But bank pay is foot by
the profits which the employees themselves make. They are thus deceived through inadequate
compensation for work when the dividends are declared without providing for /
paying due wages / pension with timely revision and surplus profits are
retained as reserves which is in apparent breach of section 10 (7) of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 / 1980
enacted by the Parliament.
The primary question is whether Indian Banks’
Association can operate a parallel regime creating a black territory and
establish a slave dynasty in independent India by overruling the sanctions of
the Parliament in a way bringing shame to the nation and tormenting its
democratic fabric or the wings of IBA shall be clipped by making banks
compliant with the laws of the nation to protect the dignity and privilege of
the Parliament.
I request you to kindly ensure that the subjects of the
Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980 and
Pension Regulations, 1995 are not denied the sanctions of the Legislature to
restore righteousness.
Thanking You,
Yours faithfully,
C N VENUGOPALAN
Appendix
Banking
Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980
Section
10 (7)
After making provision for bad
and doubtful debts, depreciation in assets, contributions to staff and
superannuation funds and all other matters for which provision is necessary
under any law, or which are usually provided for by banking companies, a
corresponding new bank may, out of its net profits, declare a dividend and
retain the surplus, if any.
Section
19 (1)
The Board of Directors of a
corresponding new bank may, after consultation with the Reserve Bank and with
the previous sanction of the Central Government, 1[by notification in the
Official Gazette], make regulations, not inconsistent with the provisions of
this Act or any scheme made thereunder, to provide for all matters for which
provision is expedient for the purpose of giving effect to the provisions of
this Act.
Section 19 (4)
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 Parliament, while it is in session, for a total 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 the
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.
Bank
(Employees’) Pension Regulations,1995
Regulation
5 (2)
The
Fund shall have for its sole purpose the provision of the payment of pension or
family pension in accordance with these Regulations to the employee or his
family.
Regulation
5 (3)
The Bank shall be a contributor to the Fund and shall
ensure that sufficient sums are placed in it to enable the trustee to make due
payments to beneficiaries under these Regulations
Regulation
11.
Regulation 52 (1)
Except in the case of an employee to whom the provisions of regulation 43 and regulation 46 apply, a pension other than family pension shall become payable from the date following the date on which the employee retires. (2) Family Pension
Regulation 56
Residuary provisions - 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.
Actuarial investigation of the Fund – The bank shall cause
an investigation to be made by an Actuary into the financial conditi
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