Pension Provision in Banks

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/pension-liabilities-force-jp-morgan-to-cut-price-targets-of-psu-banks-by-10/articleshow/8687902.cms

http://articles.economictimes.indiatimes.com/2011-04-09/news/29400706_1_gratuity-liability-gratuity-act-bank-auditors

It has been reported several times to RBI, Banking Division, IBA, Finance Minister, Prime Minister in particular and Government of India in general that chief of public sector banks are not making adequate provisions for pension and gratuity payable to their retiring and retired employees .There are instances when management of some banks have not even contributed and deposited their contribution equivalent to PF contribution recovered from their employees , either PF optees or for Pension optees. Unfortunately government and all responsible authorities have thought it fit to turn blind their blind eyes and deaf ears towards all factual reporting made by expert and true bankers. Even bad assets are certified as good assets in collusion with team of Chartered Accountants and the RBI officials think it wise to remain silent spectator..



It is ironical that whenever poor health of any bank is exposed, misdeeds of top ranked officers are exposed , lack of monitoring and non fixing of staff accountability come to picture the stalwarts of banks put the onus of ill health of bank on global recession, inflation, or rise in interest rate. They never try to accept the real reason of malady rampant in banking industry. Culture of flattery and bribery, practice of pick and choose policy in promotion and posting are the root causes of growing sickness in public sector banks. Incompetent and inefficient judiciary add fuel to fire ,fail to protect the respect and dignity of good and devoted officers and ultimately fail to prevent corrupt officers getting elevation year after year even though they are the master of corruption.



This is why the accumulated burden of bad assets hidden below the face of balance sheet has ballooned to uncontrollable position and now getting punctured in gradual way. Due to vested interest of top ranked official and corrupt chief of various banks health of banks has suffered continuous erosion. It is worthwhile to mention here that when chief of SBI got retired in the recent past ,the misdeeds of that bank have came out to some extent through their annual result. If loans upto Rs.50.00 lacs are also classified as per RBI norms honestly and through CBS system there is no doubt that SBI will face sharp erosion in share value and face critical capital crisis .Similarly when chief of other banks who committed large scale fraud with the system are revealed only when they get retirement or they are transferred to other banks



In the same way bribe led lending done by corrupt top officials by giving verbal and telephonic advice to field functionaries is not declared bad assets even if the same is bad as long as the concerned top ranked officer of that bank is given a safe exit or some junior rank officers are made scapegoat or related the files are closed. Manipulation in Balance Sheet and concealment of cancerous disease in the banking system cannot protect banks from probable eruption of crisis in near future.