I am reproducing the letter addressed by Sri. C N Venugopal to Sri. Piyush Goyal, MOF, On the issues of Pensioners which is self explanatory. It is our duty to extend him moral & economical support with all encouragement in his endeavour of relentlessly taking up the Pensioners issues.
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C N VENUGOPALAN, . Former Director (GOI Nominee),. State Bank of Travancore & Ex Manager, Union Bank of India, “Nandanam” Kesari Jn. N Paravur, Kerala -683 513 Mob: 9447747994 ceeyenvee@gmail.com
28th January, 2019, To:. S/Shri. Piyush Goyal,. Hon’ble Minister for Finance, Govt. of India, New Delhi – 100 001
Most Venerable Minister,
Decline and fall of state run banks
I write to you in the context of ET news bringing to focus capital infusion to the tune of Rs.2,11,000 Crores into the state run banks in the next two years by government to tame NPAs for ensuring further credit delivery from banks in preferred areas and I request that I may be permitted to submit that such capitalization can be no panacea for a solution of the issues confronting the public sector banks.
You might be knowing that consortium of banks headed by Union Bank of India granted Rs.650 Crores to Shirdi Industries and wrote off 65 percent of the balance. Though banks have autonomy of operation with independent Board of Directors and also Reserve Bank of India to regulate things, Ministry of Finance is incessantly intervening and to make them act as it wishes. The Mudra Loans are turning to be a major avenue of NPAs and there are umpteen “yojanas” with new nomenclatures which promote NPAs. The “Rupee One Crore loan in 59 minutes” can also do nothing else where Capita World, a private agency of Ahmedabad is levying Rs.1,180/- upfront from each applicant. What is necessary for banks appears to be autonomy of operation with quality personnel at field level. The purpose of the new regulator viz. Banks Board Bureau where RBI is there as the regulator is also enigmatic.
The death knells of state run banks is ringing at high tone through talent drain in the industry consequent on low compensation for work leading to officials abandoning jobs and committing suicides also on account of mounting pressure of work and job risks with the announcement of each new program to be implemented. The national daily “Matrubhumi’ was bringing the grave issue to limelight through its editorial on November 6, 2017.
Government has conveniently ignored that nationalized banks are “state” as defined under Article 12 of the Constitution and the employees of banks are government employees who are to be covered under Pay Commission. Ownership of banks by government is also making bank employees, the employees of the government. Work-wise, they are the people who translate all the financial policies of the government into reality. Bank employees are the people who saved the face of the government from the crises created by demonitisation by providing solace to the masses, day and night and on holidays. Banks are arms of the government as listed under Department of Financial Services in the RTI portal. The pension of employees who joined banks after 31.03.2010 is managed by PFRDA. The Pension Regulations of Banks are exactly on the premise of Central Civil Pension as is explicit from regulation 56 and definite provision exists for updating pension under regulation 35 (1). But the Bank employees who had a better pay than government pay now gets less than two thirds of what is paid to Central Civil Servants and the pension of employees is never updated. The government that pays salary and pension profusely to its employees and to employees in private sector like colleges is frugal only in paying due wages in the key industry to its employees. When regular updating in pension is allowed to retired civil servants out of the exchequer on pay revisions, bank retirees are denied updating of pension out of their own deferred wages held by banks when such payment incurs no cost either to banks or to government. The Government, strangely, pays nothing to the bank employees as salary and pension which are met out of the profits they make in banks in utter disregard to them.
Shri. P Chidambaram was declaring that profits of banks are not for paying salary to employees and that it has other purposes. He demonstrated that it was for mounting his family wealth on items like changing the logos of three banks viz. Canara Bank, Bank of Baroda and Union Bank of India simultaneously and awarding the contract to Boston Consultants, a firm in which his son Karthi had interest. Shri. Chidambaram, the legal luminary was pretending to be not knowing that section 10 (7) of the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970/1980 permits banks to declare a dividend and to retain surplus profit as accumulated reserves in their books only after paying the establishment expenses like wages and superannuation funds.
When Pension Regulations were implemented in banks, more than 50 percent of work force were forcefully kept outside the scheme through a clause under regulation 22 (4) (b) providing for forfeiture of past service for participation in strike. When the clause was later deleted in terms of letter F No.4/8/4/95-IR dated 24.12.1997 of MOF for the sole purpose of granting an option afresh, the option that were mandatory were not allowed by banks at the behest of IBA, duping about 6,00,000 employees while amending the regulation through Bank (Employees’) Pension (Amendment) Regulations, 1998.
While ‘Bharat Ratna’ laureate Shri. P K Mukherjee was Minister for Finance, a Joint Note dated 27.04.2010 on unlawful conditions of serving employees paying 2.8 times revised pay for November, 2007, retired employees paying 56 percent of CPF to the Pension Fund of the Bank and the latter losing pension from the date of retirement to 27.11.2009 for granting options for pension afresh got implemented. The contributions were in defiance of regulation 5 (3) and regulation 11 of the Pension Regulations and the denial of pension from the date of retirement to 27.11.2009, in defiance of regulation 52 (1) which were impermissible under sections 19.1 and 19.4 of the Act. Options were granted to 6,00,000 employees on unlawful conditions when an option was due to them under the Bank (Employees’) Pension (Amendment) Regulations, 1998. Pension Regulations of banks, Act 5 of 1970 and Constitutional provisions were flagrantly flouted during the tenure of Shri. P K Mukherjee as Finance Minister.
The Joint Note was a culmination of my solo battle against all odds for a decade after exit from Union Bank of India through VRS on 20.04.2001. It bought about a renaissance in the industry giving solace to 6,00,000 employees, serving and retired, who got their shattered dream of getting pension revived, saving them from destitution in old age. Again, when the key men of banks were competing with one another for taking over the big loan accounts from counterparts, using the lethal weapon of interest rate for projecting a rosy picture of their performance by reducing the interest by 2 to 3 percent on big loans during 2002-2006 and the life blood of banks was oozing out in big proportions, it was my vehement criticism that put an end to the take-over mania resulting in incremental profits of Rs.1,00,000 Crores to Rs.1,25,000 Crores during 2005 to 2010 for all banks taken together. All these, I was doing remaining outside the system for no compensation and without even pension. This was my significant contribution to the Financial Sector of a unique nature. This was why, after taking exit from Union Bank from MMGS-II level a decade back, I was placed as GOI Nominee Director on Board of State Bank of Travancore by government from 11.01.2011 to 10.01.2014. But the Bank for which I sacrificed my entire life denied me pension for 8 years, 7 months and 6 days from 21.04.2001 to 27.11.2009 in defiance of the Regulations as a quid pro quo.
The Bank and the Government notified on 06.11.2017 in the Gazette of India amendments to Pension Regulations to ratify the unlawful acts by way of patching a hole with darkness. Clause 4 of the notification amending regulation 28 ‘on Superannuation Pension’ lays down that employees who ceased to be in service on account of Voluntary Retirement after 29.09.1995 complying with the conditions laid down in the Scheme approved by the government shall be entitled to join Pension Fund. This makes such employees entitled to the consequential benefit of superannuation pension from the date of retirement. A fortiori, clause 8 (a) of the notification lays down that “Except in the case of an employee to whom provisions of regulation 34 or 46 apply, a pension other than family pension shall become payable from the date following the date on which an employee retires”. In spite of amending these regulations, the notified benefits are not paid to me though I retired through VRS and the regulations 34 and 46 are inapplicable to me. On taking up with the Bank, I was informed that it is eagerly waiting for the further directions from Ministry of Finance / Indian Banks’ Association to redress my grievance. The notification was made jointly by the government and the Bank which makes it explicit that no further sanction is necessary from the Government for paying the benefits and Indian Banks’ Association is not an authority either under the Pension Regulations or under Act 5 of 1970 / 1980 in pension matter, making its direction unnecessary in the matter. Apparently, Ministry of Finance is creating a stumbling block in the proper implementation of the Regulations, when the Bank has autonomy of operations and definite Pension Regulations, which are statutory. On elucidating clarifications on the notification MOF sanctioned, the officials of MOF who approved them and published in the gazette are pretending as senseless by indifferently forwarding such letters to Union Bank of India or to IBA asking them to give clarify on the folly MOF contemplated.
Shri. Aun Jaitley, Finance Minister is seen annoyed when Mrs. Chanda Kochar, MD of ICICI Bank was booked by CBI for a scam. He was silent when six lakhs people in his financial army were denied the statutorily vested pension benefit, in gross derogation of regulations, out of their own money. He was justifying the PNB Scam of Pension Fund brought to light by Live Mint. Shri. Santhoshkumar Gangwar, MoS for Finance was, to the unstarred question No.2444 of Prof. Rajiv Gowda, answering on 08.08.2017 in the Rajya Sabha that government is not considering OROP as in the case of defense sector or improvement in pension in banks as it will directly affect the profits of banks. The reply was in reliance of the fallacious information fed by MOF and IBA when pension, being payable out of Pension Funds, in fact, has zero impact on the profits of banks and the Funds are galloping with robust annual growth that can foot three to four times the present pension without touching the corpus and there is no cost either to banks or to government to update pension. What is apparent is that the Ministers are also kept in the dark by the bureaucrats, making them mere puppets playing as per the strings they pull. A total catastrophe is on cards in the key industry at the behest of the bureaucrats who are venturing a total destruction of state run banks.
In case the real aim is to build up a resilient banking system that can assure overall progress of all segments in the long run, the need of the hour is to attract talents in the key industry by restructuring the pay scales in banks, bringing it at least on par with the government pay or by including bank employees under the Pay Commission than infusing more capital. Without this, any capital infused can get eroded easily through fresh NPAs. The arrears of pension and the unlawful contributions levied to pension funds in defiance of the regulations in force are to be paid off, which involves not cost to banks or budgetary allocation for the government to unravel the wrongs done to escape the curses of the employees who built up banks who are denied their right to live, in the December of their lives, which needs no new sanction as they are the already sanctioned benefits under the Regulations.
The notifications viz. Pension (Amendment) Regulations, 2017 make it explicit that there were no provisions for the contributions or for denial of pension so far and the amendments cannot evolve as law as they are impermissible under sections 19.1 and 19.4 of Act 5 of 1970. They constitute fraudulent documents created for making a wrongful gain to banks out of the sweat of the brow of employees and a wrongful loss to them which can attract the wrath of law under sections 405 and 409. They prove that the banks were guilty of having raised the contributions and denied the pension from the date of retirement to 27.11.2009 on the basis of the Joint Note. The Ruling dated 13.02.2018 in Civil Appeal 5525 of 2012 viz. Bank of Baroda & Anr. Vs. G Palani & Ors. by the Hon’ble Supreme Court is also making it clear that Joint Note has no statutory basis and the regulations are binding. It is hence in contempt of the Supreme Court that the amounts are held by PSBs pushing the beneficiaries of Pension Regulations to the corridors of Courts.
I trust, as a Minister with vision, who has taken oath of office in the name of the Constitution to act without fear and favour and to render justice to all manner of people, you will kindly direct the banks to release superannuation pension to employees who retired on account of Voluntary Retirement and pension from the date of retirement to employees to whom regulations 34 or 46 are inapplicable, which are notified as payable vide clause 4 and 8 (a) of the notification dated 06.11.2017 of Union Bank of India and on subsequent dates by other banks to redeem the dignity of the Gazette of India, of the Legislature of India and of the magnificent Constitution of India, which involves no cost either to the banks or to government.
Thanking You,
Yours faithfully,
C N VENUGOPALAN