Negotiate, don’t agitate: IBA to unions -Hindu Business Line 24.12.2014 ( My Comment given below)
MUMBAI, DECEMBER 24:
In the ongoing tug-of-war between unions and bank managements on the issue of wage revision, the Indian Banks’ Association has weighed in saying that the previous bipartite wage settlement was an exception as compared to earlier settlements and cannot be quoted as precedent.
Wage issues
This observation by IBA, which is the representative body of banks, comes in the backdrop of the 10th bipartite wage settlement in the banking sector being delayed for more than two years and unions, representing the interests of about 10 lakh employees, deciding to intensify their agitation for a wage hike.
According to the unions’ game plan, bank employees will not report to work for five days — January 7, and January 21 to 24 — next month to press their demand for a wage hike. If bank managements do not settle the issue of wage revision in January-February then the unions have threatened to go on an indefinite strike from mid-March.
While bank managements are willing to offer 11 per cent wage hike, the expectation of the unions is for a 25 per cent (negotiable to 23 per cent) wage hike.
In the previous (9th) bipartite wage settlement, covering 2007-2012, an average wage hike of around 17.5 per cent was given.
Abberation
Pointing out that in the past seventh and eighth bipartite settlements, the wage increase was between 10 per cent and 13 per cent, the IBA, in a statement quoting its Chief Executive MV Tanksale, said, “The ninth bipartite settlement was an exceptional
“In the current wage settlement, a hike of 11 per cent on salary and allowances has been offered, based on the paying capacity of all the banks, lower profitability, higher requirements for provisions and further capital requirement under Basel-III, translating into 12.5 per cent on the balance sheet cost. This too is unaffordable to some of the banks.”
Back to the table
The Association said the issues regarding wage negotiation deliberated in the Negotiating Committee of the IBA were further discussed in a larger forum — Managing Committee of IBA — and the Chairmen of all the banks felt the demand for 23 per cent increase made by the Unions/Associations is unaffordable, illogical, exorbitant and irrational.
While IBA has appealed to the Unions/Associations to give up the agitation and return to negotiations to resolve the wage revision issue, unions don’t seem to be in a mood to relent.
Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, said bank managements are stonewalling employees’ demands for a wage hike by citing profitability constraints, the need to shore up capital for meeting the new Basel regulatory standard, and the provisioning burden.
“Bank employees are not responsible for the bad loans that have accumulated in the banking system.
In fact, they have helped banks grow their business and profitability. So, there is no reason why bank managements should deny our demands,” he said.
My Opinion On above news is as follows-Danendra Jain
I draw the attention of members of Indian Banks Association and specially of the Chairman of IBA who are denying respectable wage hike to bank staff even after lapse of two years and frequent strike undertaken by bank staff on the ground of load of bad debts and fall in profits in public sector banks . They plead that paying capacity of bank is not enough to meet the load of wage hike as demanded by bank unions. They say that load of Non Performing assets have increased in banks and hence profit of banks have sharply come down and due to this banks cannot afford such wage hike.
I ask them simple following questions whose answers may help in proving that the reason quoted by IBA in denying demanded wage hike is irrational, whimsical, unjustified, improper and illogical.
Are Bank staff responsible for rise in bad loans ?
Why IBA members who are CMDs of various banks (including past members of IBA who retired ) do not own their responsibility and openly accept that it is their failure and in managing banks properly and honestly and it is their fraudulent or corrupt act which has now resulted in sickness of these banks? Why not they tell the truth of each bad accounts and come forward with white papers in public domain so that people of India may also assess, ascertain and understand who are real culprits behind stressed assets. They should say whether thy have fixed accountability in any of high value bad accounts.
There is no doubt to any bank staff and any unbiased regulating agency that it is they ( member of IBA, present or past ) who caused rise in NPA and fall in profits. Bank staff cannot sanction loan to the tune of crores of rupees to any borrower.
None of officers even upto scale III can sanction loan of Rs. one crore and above. And the bitter truth is that 90 percent of total of NPA of Public sector bank is constituted by big borrowers who have availed loan of Rs.one crore and above. Majority of bank loan which are now in the category of NPA or stressed assets and not recoverable have been sanctioned by either ED or CMD or Managing Committee or Credit approval Committee or Board of Directors of these banks.
As such there is no justification for IBA to deny wage hike to bank staff on ground of high NPA or Low profit. As soon as reality is known to all, it will become crystal clear that reason quoted by IBA for denying wage hike is illogical, irrational, untrue, false and fabricated.
If at all it is accepted that banks' profit has come down due to load of bad assets , it is first they who should be punished and their pay scale to be curtailed. Not only this incentive which they (present and retired CMD and ED ) received due to inflated profit should be recovered. It is they who wilfully and strategically concealed bad assets to show higher profit and to gain incentive bonus from GOI. It is top officials of PS banks who did not declare bad accounts during their tenure and failed to take timely action against defaulters.
I further make an appeal to CBI, RBI or CAG to make forensic audit of top ten banks who have contributed maximum of NPA and investigate the volume of wealth of all EDs and CMDs of all such banks who ruled these banks during last years. They should investigate officials of RBI and Ministry of finance of last ten years who were part of Credit approval committee and who aware part of boards of these banks. It is those top officials . They should look into wealth profile of all those ministers and politicians who were directly or indirectly instrumental in sanction of loans to those borrowers who are not NPA in books of account of top banks.
It is desirable to carry out forensic audit of all bad accounts involving Rs. one crore and above and fix responsibility on all top officials who are fund negligent and whose intention behind sanctioning of loan is proved bad. It is top officials who merely by phone build pressure on juniors for sanction of even smaller loans as per their whims and fancies and it is thy promote who indulge in bribery and flattery.
Further Government of India and Reserve Bank of India should disclose audit reports of all such PS banks which have shown maximum volume of NPA including that of Central Bank , Indian Bank, SBI, PNB, Indian Overseas Bank, Allahabad Bank, United Bank, Uco Bank etc. I further request them to at least publish reports of Forensic audit recently carried out in three or four banks and name of those EDs and CMDs who were heading these banks during last ten years.
If this is honestly scrutinised, I am fully confident all present or retired members of IBA will be exposed . Because it they who caused and who have been predominantly instrumental in rise in NPA in these banks and it is they who safely retired after indulging in bribe based lending . It is they who are now shedding crocodile tears on NPA and who is denying wage hike and it is they who are presenting false picture to GOI and MOF to win the heart of ministers and government officials and to get further rise in their career and to ensure further speedy growth in wealth.
It is politicians and past governments which damaged fundamentals of public sector banks by prescribing head of PS banks to carry out loan melas to increase credit portfolio of these banks so that vote bank of politicians will become thicker. It is they , politicians who adversely affected the repayment culture by frequently announcement of loan waiver scheme and by building pressure for compromise settlement with bad borrowers. It is they who siphoned off huge amount in writing off of bad loans in nexus with banks and big corporate houses who wilfully did not pay the dues of banks. It is government of India which failed to ensure disposal of cases filed against defaulters and which are even pending in various courts and DRT for years together.
Second point is that banks cannot afford wage hike as demanded by bank staff unions. I am submitting here the reports on key loss making units of the country and want to ask members of IBA and that of GOI and RBI how employees of these loss making units are being paid salary at par with profit making units or you may say uniformly in tune with Central Pay Commission report. Not to speak of teachers and professors of various government run schools and colleges and various state government departments where performance is far below the expected level and where salary is much higher than bank staff , there are several central government departments who have become useless and not functional in the era of reformation or due to inefficiency of government which ruled last six decades but they are paid much higher salary than bank staff .
The fate of some Public Sector Undertakings (PSUs) in India hangs in balance as government .
officials discuss proposals to shut down some loss-making state-owned companies.
With the total net loss recorded at ₹245 billion ($4 billion) in 2012, which has only worsened, cabinet secretary Ajit Seth on Tuesday called a meeting of top officials to discuss the fate of 10 firms which have been making biggest losses.
Some of these PSUs, including Air India, BSNL, ONGC, SAIL, Hindustan Photofilms, Hindustan Fertilisers Corporation and HMT have been consistently bleeding cash and have survived only on budgetary allocations.
The Central government runs around 260 PSUs besides thousands of state-government owned firms which manufacture various types of consumer goods.
HMT: Last week, the government ordered to shut down HMT Watches and HMT Chinar Watches due to their continued losses since 2000. The company posted a loss of ₹242 crore in 2012-13. At the end of March 2012, the company was deep in debt worth ₹694.52 crore.
ONGC: In May, ONGC accused Reliance of 'stealing gases' and claimed a loss of ₹30,000 crore within less than a year of signing a memorandum with Reliance Industries. Following the loss ONGC took Mukesh Ambani's Reliance to court over gas theft, reported TOI. ONGC worried that Reliance drew gas secretly from its Krishna Godavari-D6 block.
BSNL: State-run telecom company incurred a loss of ₹14,979 crore in landline services during 2013-14, where as its overall loss was recorded at ₹7,085 crore.
Air India: This airline has been incurring losses and is trying to refuel its pockets via heavy discounts on fare prices. The state-run carrier halved its operating loss in the financial year. It suffered a loss of ₹2,120 crore in 2013-14, down from ₹3,800 crore in 2012.
Hindustan Photofilms: Incorporated in 1960, the company was well-known for making film rolls with Kodak as one of its brands. It was recommended for shut down in 2003 as it could not compete with other private players. The company approached the courts which gave a stay order on its closure. Its overall losses are around ₹82.33 billion rupees which is about 40 times its paid-up capital.
"There is no future for this company in the current environment. It is a fit case for winding down," an official from the Department of Public Enterprises told Reuters on conditions of anonymity
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