To,

The Hon. Chief Justice of India
The Hon. Finance Minister of India
The Hon. Prime Minister of India

Pension Revision for Bank employees 

Injustice meted out  to Retired Senior citizens of the Banking sector.

Bank employees are the soldiers providing services and protection to the National financial sector.  Their role in managing the financial resources and implementing government schemes and policies for the public in general and the poor and underprivileged in particular, is very important.  This part is duly acknowledged by the Prime minister and the Finance Minister on multiple occasions.

Unfortunately the life of such soldiers, post retirement, is very pathetic and ill treated by the Managements and Unions of Banks and the governments have also turned a blind eye to their miseries. The retirement benefits such as Provident Fund, Gratuity as available to State/Central Government /PSU/ Defence employees, were also provided to Bank employees, but Pension benefits were not provided to them.  After a very long struggle PENSION as a third benefit was made available to bank employees in 1995 but at the cost of sacrificing contributory provident fund. Pension Funds were created at each bank by transferring bank’s contribution to provident fund as initial deposit  for effecting payment of pension only and it is said that the total funds accumulated at the beginning was said to be around  Rs 2.40 lakh Crores with an annual interest income of around Rs.18,000 crores and an annual  outgo of Rs.15,000 crores towards annual pension payments and banks were also to contribute 10% of pay (paid to employees) towards this fund every month.  

NON-REVISION/UPDATION OF PENSION             

          Since 1995 the salaries of the bank employees have been revised 6 times but the pension of retirees remained stagnant without any revision.  While the Central/ State government pension rules (which is the basis for forming Bank employees pension rules) provided simultaneous revision of pension along with salary revision, No such revision of pension was considered by the Bank Managements at each subsequent salary revisions till date.  The unions also joined hands with the management in blocking the pension revision with a view to achieving better benefits to the serving employees at the cost of benefits to retired staff. For Example, During 10th salary revision effective from 1st November 2012, IBA created a new salary head of account titled “Special allowance”. carved out of revised “Basic pay” which attracted DA, HRA, CCA etc., but DELIBERATELY kept it out of the purview for calculation of Pension and duly accepted by unions. Earlier “Special allowance” was paid to specified staff for performing certain “specified” duties only.  But this new special allowance introduced in November 2012 was paid to all staff without any specific/special duty to be performed.  The only intention of creating this new allowance was to reduce the amount  of pension payable on superannuation. The main problem is that Retirees associations/unions/forums are not allowed to participate in the salary/pension revision activities and both UFBU and IBA are taking care of existing employees only and retirees are treated as third grade citizens. Both IBA and UFBU have ignored the fact that Pension is not any Gratis paid at the free will of Management of the Bank but it is Deferred wage/Salary paid for the yeoman services rendered by retired staff. The retirees' hard work deserved better recognition for their special role during the hard phases of manual banking, transition from manual banking to computerised banking.

Many organisations and individuals have approached courts for legal redressal. Nothing has come out except tariq pe tariq, tariq pe tariq.   Many have lost their lives in anticipation of justice.  A ray of hope was found when the Chief Justice of India opined that “Courts should not wait for senior citizens to die for their case to be decided”, and Smt. Nirmala Sitaraman, the Finance minister, had also advised IBA for speedy settlement of retirees' demand for pension revision (and IBA conveniently ignored it!).  Hence this petition to CJI and Finance Minister with a request to expedite disposal of all pending cases relating to Bank retirees and instruct IBA  for prompt action of speedy revision of pension on the lines of Reserve Bank’s formula for Revision of Pension in RBI.  

1) REVISION/UPDATION OF PENSION : Indian banks association, representative body of bank management has been avoiding the revision/updating of pension on one or the other pretext and the latest being that there is no mention of any clause for revision/ updating of pension in Bank pension rules, which is totally incorrect.  There is a mention in regulation 35 of the Pension Act.  There is also a specific mention in pension rules that in case of doubt “the rules applicable to central government employees” shall be applicable to Bank employees also.  It may please be noted that there was no mention of periodicity for revision of Dearness allowances payable to Bank retirees in pension regulations, the IBA, under the said clause specified and effected DA revision at “half yearly” interval, similar to central government employees, while regular employees’  DA is revised on a quarterly basis.     Further HCs/SC have opined that  'such doubtful clauses should be interpreted in favour of employees’ but not accepted by the IBA.  The unions which were negotiating this issue with IBA always kept ‘pension’ as the last matter on their agenda and always found a permanent place in unresolved “Residual issues” which were carried over from settlement after settlement after settlement till date. IBA and UFBU always treated pension as a gratis/Bounty payable at the sweet will of Banks and retirees had only one option of “pick it or leave it”  Apart from causing monetary hardship  due to high inflation,  non updation of pension  also created huge anomalies such as 'persons in sub-staff~clerical cadres getting more pension than a person in General manager cadre due to the date of  superannuation in different settlements periods'.  

Since Banks have huge balance of nearly 2 lakh crores rupees in their Pension Funds, there will not be any  burden on Bank’s profit and loss accounts and therefore can be implemented immediately on RBI pension updation model.

2} CREATION OF SPECIAL ALLOWANCE carved out of Revised Basic pay in salary revision effective from 01-11-2012 has caused a huge dent in the amount of pension of subsequent retirees.  Earlier,  The concept of paying “Special Allowance” was introduced in the Banking sector with a view to compensating for performing some specific duties by designated staff like, head peon, jamadar, daftari, Arm guards, cashier, head cashier, telex operator, special assistant etc., much earlier to the bipartite settlements.  But in contravention to the laid down principles, IBA and UFBU created a "New Special Allowance” to all banking staff without performing any “specified” duties with effect from 01-11-2012. This new allowance was neither demanded by the Unions in their charter of demands submitted to IBA, nor a condition offered by IBA to unions before commencement of negotiations.  This was introduced with a view to balancing the allocation of funds to the advantage of existing staff, sacrificing  pension benefits.  6 to 8 % of basic pay was carved out of the revised basic pay and treated separately under the nomenclature “Special Allowance”.  This is same as Basic pay and made eligible for payment of Dearness Allowance, HRA,CCA etc., but was kept out of purview for calculation of retiral benefits like Pension. This is robbing Roberts (retirees) to pay Paul (existing employees).  Further this portion was progressively increased in each subsequent salary revisions, now reaching 24/26/28% of basic pay. If this progression is maintained the special allowance will reach 100% within a couple of more salary revisions.

This is totally against the established system that the “payment of pension is dependent only on Basic Pay” and efforts to reduce the amount of basic pay by separating a portion of Basic Pay under a different nomenclature and keeping it out of the purview for pension calculation is a severe blow to the retiring staff due to reduction of pension benefits by over 25%. The Supreme court has also observed that “there cannot be two separate calculations, one for calculation of Salary and the other for calculation of Pension”.  IBA and UFBU have blatantly violated this observation and introduced two calculations separately for salary and pension.  We request you to set right this illegal anomaly and merge the special allowance back with basic pay and refix pension.

3}  EX-GRATIA:  In the latest wage revision, the IBA and UFBU have decided to pay a nominal amount of “EX Gratia” to the pensioners in lieu of pension revision.  This payment of ex-gratia to pensioners was neither a demand by UFBU/ retirees forums nor an offer by IBA at the start of the negotiations but suddenly introduced at the last moment with a view to stalling the legal actions presumed under various litigations pending in different courts.  This is in spite of the fact that there is no provision for payment of Ex-Gratia for pension. Even the amount of Ex-gratia announced is very meagre, ranging from Rs 800 to maximum of 2200 to retired GMs.( a minimum of 0.02 to 0.17 based on salary revision dates).

4)  HIGH PREMIUM ON GROUP MEDICAL INSURANCE;

IBA has introduced a group medical insurance scheme for both existing employees and retired staff. While the Banks pay the premium for existing staff, retirees have to bear the entire premium on their own.

The premium has increased manifold from Rs.15000 to over l lakh for the same coverage now and it consumes the entire 2 / 3  month’s pension. 18% GST on this premium is deadly.  Hence the cost of premium is exorbitant and unaffordable.   The banks should treat the retired staff on par with existing staff as this is a medical risk uniform to all,  irrespective of whether ‘in service or otherwise’.  FM should consider waiving of GST on premium of medical insurance of Senior and Super senior citizens.

In view of above submission, we request you to please take appropriate action to redress the induced hardship by IBA and UFBU on Senior/Super Senior citizens of Banking Industry and provide the relief to the citizens who are on the fag end of their life.

V  Raghunatha Sharma

Mysore
14-03-2024