S. Ramachandran Kunal Icon, Building no. A8,
Former General Manager Bank of Baroda. Flat no. 104, Pimple Saudagar,
Former Chairman & CEO - The
Sangli Bank Ltd. Aundh Camp, Pune 411027
(Now merged with ICICI Bank Ltd.) Tel: 020 27201012.
Co-op Bank Ltd (Ahmedabad)
Former Director General Maratha
Chamber of Commerce
Industries & Agriculture,
Pune.
By
Speed Post
To, 21stMay
2012
Shri .Pranab Mukherjee, MOST URGENT
Hon’ble Finance Minister,
Government of India, North Block,
Raisina Hills,3rd
floor,
New Delhi, 110001.
Respected
Sir,
BIG PENSION SCAM
Sub: Illegal Denial of 2nd
Pension option to VRS Optees under Officers
serviceRegulations’ 1979. Though
not denied by GOI AND RBI
In
continuation of my letter dated 29th March,2012,addressed to you on
the above subject I invite your kind attention to my letter dated 1st
April, 2012 and reminder letter dated 12th April, 2012 addressed to
Shri.K.Ramakrishnan, C.E.O of Indian Banks Association (copy enclosed annexure no
1&2 )on the above subject
copies of which have been sent to Shri M.D.Mallya Chairman IBO AND Shri
D.K.Mittal Chief Secretary, Ministry of Finance
and received by them and regret to inform you on the total silence on
the part of all the officials which is
not at all befitting the position they are holding..
However
this inaction and rock silence on the part of CEO and Chairman of IBA force me
to totally lose confidence in the functioning of IBA under their leadership
which calls for immediate action against these officials from the Government of
India as they are playing with public money as, all Public Sector Banks
subscribe lakhs of rupees as annual membership fees .
I
repeat below the blunders committed by them against the VRS optees in denial of
2nd Pension option who are
mostly senior citizens above 65 years or so .by overriding the instructions of
GOVT
1.Department of financial services has
conveyed to me vide letter F.NO.15/22/2012 dated 14th March 2012
that “IBA HAS CONFIRMED THAT THERE WAS NO COMMUNICATION FROM THE GOVERNMENT TO
IBA TO DENY SECOND OPTION OF PENSION TO OFFICERS’WHO VOLUNTARILY RETIRED UNDER
OFFICERS’SERVICE REGULATION,1979.
2
The Appellate Authority, Reserve Bank of India ,Central Office Mumbai ,vide his
letter DBOD;CO;RIA;13849/04;03;00/2011-12 Dated 15th March ,2012 has
conveyed as under to my question- “whether RBI has given any concurrence to
Public Sector Banks to deny one more option to the officers voluntarily retired
under the first scheme ? If so provide me photo copy of the same.
Answer:-
We have not issued any specific instruction in this regard. (copy enclosed
Annexure no 3)
3.Finance
Ministry has given sanction
to implement the terms of settlement /joint note dated 27-4-2010 between IBA
and Unions/Associations for the grant of option to the retirees and payment of pension to such retirees w.e.f.27th November 2009,as
sanctioned by your good selves , who opt for pension and comply with the
terms and conditions set out in the settlement /joint note for grant of pension
,pending necessary amendments in the Bank (Employees ) Pension Regulations
1995. The joint note does not admit any
specific exclusion based on mode of retiremen. Regulation 2(y) of the Pension
Regulations defines ‘Retirement’ in the following words
‘(y)
‘retirement ‘ means cessation from banks service- (a) on attaining the age of
superannuation specified in Service Regulations or Settlements (b)on voluntary retirement in accordance
with provisions contained in regulations 29 of these regulations (c);on
premature. Retirement by the bank before attaining the age of superannuation
specified in Service Regulations or Settlements.
In spite of the above clear cut instructions
from the Finance Ministry I am pained to inform that IBA in its circular NO
CIR/HR&IR/G2/665/90/2010-11/999 dated 10th August 2010 in
paragraph no13 in 3rd sentence has added the word “on superannuation” after retirement
which is not mentioned in the joint note
dated 27-4-2010 . The joint note on page no 3 under paragraph no (3) (a)
states that Officers who were in the service of the bank prior to 29th
September 1995 in the case of Nationalised Banks and retired after that date and prior to the date of this note. This addition of the words ON
SUPERANNUATION is unethical and misrepresentation of facts AND FRAUD COMMITTED
ON THE VRS OPTEES just to deny the 2nd pension option to VRS optees
under officers service regulations 1979
When
I asked Bank of Baroda whether the bank has made any reference to IBA asking
them under whose authority they issued the instructions to the bank vide their
letter dated 10-8-2010 DENYING 2ND PENSION OPTION TO VRS OPTEES
referred to above the bank replied “NO” vide banks letter no
BCC/RTI/PIO/104/418 DATED 11-5-2012.
Bank
of Baroda’s G.M ( H.R.) ALSO PLAYED THE SAME MISCHIEF BY MISREPRESENTING THE
ABOVE IN ITS BOARD NOTE DATED 30-8-2010 FOR GETTING THE 2ND PENSION
OPTION APPROVED AND TO DENY THE 2ND PENSION TO VRS OPTEES. (
Annexure no 4)
HE
ALSO CONCEALED THE MATERIAL INFORMATION FROM THE BOARD OF DIRECTORS IN THE SAME
BOARD NOTE OF NOT MAKING PRIOR STATUTORY CONSULTATION WITH RBI UNDER SECTION 19
(I)OF BANKING COMPANIES ( TRANSFER OF UNDERTAKINGS) ACT 1970 BEFORE SUBMISSION
TO THE BOARD OF DIRECTORS FOR IMPLEMENTING THE 2ND PENSION OPTION.
( Annexure no 4 )
Further when I asked the CPIF of ministry of finance under
point no 2 in my letter dated 8th Feb,2012 to provide copy of Govt
sanction of RS. 6380.50 crores being the cost of funding gap as estimated by
the actuaries for working as well as retired employees and as approved by IBA
as given in the joint note dated 27-4-2010 the CPIF has replied as under.
“IBA
HAS CONFIRMED THAT NO SUCH APPROVAL WAS SOLICITED FROM THE GOVERNMENT NOR
CONVEYED TO THE GOVERNMENT” This means IBA has not obtained any sanction for the financial burden on PSU banks
towards the second 2nd pension option which is very surprising
and serious. Further you are aware the
actual cost has gone up to Rs.24381 crores as against estimated cost of Rs
6380.50 crores as per joint note dated 27-4-2010 which was sent to Govt.
I also find from the reply given
by RBI in their letter referred to above that none of the PSU banks have
approached RBI for Statutory
Consultations/ permission under section 19 (1),2(f)of Banking companies
Act,1970 and 1980 for implementation of 2nd Pension Option as per
joint note dated 27-4-2010
( Annexure no 3_.
However I find when the total liability on
account of 2nd PENSION OPTION has gone up by nearly Rs.18000/-crores
as against estimated cost of Rs 6380.50 crores as stated in the
joint note dated 27-4-2010.
MR
M.V. NAIR.CHAIRMANN
IBA on realizing that mainly his bank i.e. Union Bank Of India
of which he was chairman and some of the PSU banks would go in loses and their
reserves would go down and capital adequacy ratio would go down . IBA
jointly with All Public sector Banks
without losing any time
approached RBI to amortise
the pension liability over a period of 5 years .The banks which would have gone
is losses are union bank of India, Punjab Sindh Bank, Central Bank of India
,Bank of Maharashtra.(Table given below)
When I asked RBI to provide me
the copies of letters sent by all the banks giving the reasons for such
amortization RBI Appellate authority turned down my request for the reason’ “The
information requested if disclosed, could in my opinion have a adverse impact
on the financial stability and economic interests of the country”. RBI
as reported after examining the issue
from a regulatory perspective with great reluctance permitted banks to
amortise the liability on account of serving employees only and regretted the
permission to amortise the liability on account of retired employees.
HERE
IT IS FELT THAT THE RBI COULD HAVE ASKED BANKS TO DEBIT THE ADDITIONAL PENSION
LIABILITY TO THEIR RESERVES IF THEY WERE
UNABLE TO ABSORB THE LIABILITY IN ONE GO TO THEIR PROFIT AND LOSS ACCOUNTS.
THIS COULD HAVE BEEN THE RIGHT APPROACH TO
THIS PROBLEM AS AMORTISION OVER A PERIOD OF FIVE YEARS CAUSED THE FOLLOWING
DISTORTIONS :
1
BANKS WERE/ARE ALLOWED TO SHOW MORE PROFITS AND IT CONTINUES TILL DATE.
2
BANKS SHARE PRICE IS UNNECESSARILY BEING ALLOWED TO QUOTE AT HIGHER PRICE IN
THE MARKET THAN ITS ACTUAL MARKET PRICE.
3
BANKS ARE REQUIRED TO PAY MORE INCOME TAX ON BLOTED PROFITS ( BANKS WHICH
WOULD HAVE GONE IS LOSSES HAVE ALSO PAID INCOME TAX. (SEE POINT NO 7 GIVEN BELOW)
4.CMD’s
/ED’s OF THE BANKS GOT THE PERFORMANCE INCENTIVE ON THE BLOTED PROFITS WHICH IS
NOT CORRECT.
5.EMPLOYEES
PENSION TRUST FUND ACCOUNTS LOST THE OPPORTUNITY TO EARN LEGALLY ON RS
15800/-CRORES APPROX ( AMOUNT NOT CHARGED TO BANKS PROFIT AND LOSS ACCOUNT ON
31-3-2011AND CARRIED FORWARD TO BE CHARGED TO P&L IN REMAINING 4 YEARS FOR
ALL PSB’S PUT TOGETHER ) BY INVESTING
THE AMOUNT IN APPROVED SECURITIES.
6.ALL
BANKS BALANCESHEETS /PROFIT AND LOSS ACCOUNTS ARE NOT GIVING THE TRUE &
FAIR FINANCIAL POSITION INSPITE OF STATUTORY AUDIT.
7.BANKS
PAID DIVIDENDS THOUGH THEY HAD NOT MADE ACTUAL PROFITS AS PER DETAILS GIVEN
BELOW ON ACCOUNT OF AMORTISATION OF PENSION LIABILITY :
|
NAME
OF The BANKS
|
PROFIT
SHOWN FOR
Fin
Year 31.03.2011
( Amt rounded off in Crs)
Rs.
|
Balance of Amortised Pension
Amount c/fd to be charged to P&L in next 4 years
(Amt rounded off in Crs) Rs.
|
LOSS
(Amt
rounded off in Crs)
Rs.
|
|
UNION
Bank
Punjab
Sind Bank
Central
Bank of India
Bank of Maharashtra
|
635.00
526.00
1073.00
334.00
|
1352
649
1181
409
|
(717)
(123)
(108)
(75)
|
8.THIS
IS IN CONTRAVENTION OF THE TERMS OF JOINT NOTE AS EMPLOYEES CONTRIBUTION OF 30%
WAS RECOVERED IN ONE GO WHERE AS BANKS SHARE OF 70% HAVE BEEN ALLOWED TO
AMORTISE IN FIVE YEARS
9.THIS
HAS HELPED ALL BANKS TO SHOW MORE CAPITAL ADQUACY RATIO.
10.IT
IS FELT THAT IF ONLY FOUR BANKS STATED ABOVE WERE TO GO IN LOSSES THE
PERMISSION TO AMORTIZE THE PENSION LIABILITY SHOULD NOT HAVE BEEN GIVEN TO
OTHER 15 BANKS.
11.
ALL THE 15 BANKS TOOK THE ADVANTAGE
OF GENERAL PERMISSION GRANTED BY RBI TO AMORTIZE THE PENSION LIABILITY AND
SHOWN MORE PROFITS,PAID MORE INCOME TAX, PAID MORE DIVIDEND, SHOWN BLOTED
CAPITAL ADQUACY RATIO. THUS THEIR SHARE PRICES WERE QUOTED AT A HIGHER PRICE
THEN THEY DESERVE AND MISLEAD THE GENERAL PUBLIC IN TERMS OF VALUATION.THIS IS
CONTINUING EVEN TODAY.
THOUGH the Bank of Baroda
informed me vide their no BCC/RTI/PIO/104/168 DATED 6-2-2012 that they have not
approached RBI for amortization of pension liability, I find from the balance
sheets of the BANK OF BARODA FOR THE
FINANCIAL YEAR ENDED 31-3-2011 THEY HAVE NOT FULLY PROVIDED THE ADDITIONAL
PENSION LIABILITY AND TAKEN THE ADVANTAGE OF GENERAL PERMISSION GRANTED TO
AMORTISE THE LIABILITY OVER 5 YEARS AND THUS SHOWN MORE PROFIT FOR THE YEAR
ENDED 31-3-2011 BY Rs.1463.92CRORES (
the amount bank has carried forward to be charged to profit and loss account in
the remaining 4 years )AND SHOWED MORE
PROFIT FOR THE YEAR ENDED 31-3-2012 BY Rs.1097.94 CRORE( the amount will be
carried forward to be charged to profit and loss account in the next 3 years )
AND WILL CONTINUE TO SHOW MORE PROFIT FOR THE YEAR 31-3-2013 Rs.733.96 CRORE
(the amount to be carried to be charged to profit and loss account in the next
2 years) ON ACCOUNT OF WHICH BANK paid and WILL BE PAYING MORE INCOME TAX AND
WILL BE PAYING MORE DIVIDEND TO SHARE HOLDERS (Major beneficiary being Govt of
India)
BUT
ALL THIS AT THE COST and LOSS TO PENSION TRUST FUND ACCOUNT WHICH
BELONGS TO EMPLOYEES. IT IS MATTER OF SURPRISE NO BANK EMPLOYEES UNION OR
ASSOCIATION IS RAISING ANY QUESTION ON THIS LOSS TO EMPLOYEES PENSION TRUST
FUND.
ANOTHER IMPORTANT POINT HERETO
NOTE IS THAT;-
According to the pension
regulation pension was introduced in the banking industry .w .e .f 1-11-1993 in
lieu of provident fund .The employees opting for pension have to contribute
10%of pay towards pension fund in lieu of provident fund
HOWEVER
During 7th bipartite
settlement IBA requested the unions to bear additional cost on pension on
account of increase in basic pay in 50:50 proportion over and above 10%of pay.
The additional cost on pension on account of increase in the basic pay was
estimated at 26.50%of the pay .excluding 10% of share of employees remaining 16.50%cost
was shared in the ratio of 8.25/8.25each by the union and management.
Similarly during 8th
bipartite settlement incremental cost on pension on account of change in basic
pay was estimated at 30.50% of pay excluding 10%share of employees remaining cost
was shared in the ratio of 11.25%and 9.25% by management and unions
respectively.
In the 9th bipartite
settlement incremental cost on account of salary revision is estimated at 36%of
the pay and excess of 10%contribution by the employees ,will be shared in 50/50
ratio at 13%each by the union and management .
Banks were not depositing their
10% statutory contribution and the incremental cost as agreed in the 7th,8th
and 9th bipartite since long and blotting their profits and were
playing a fraud on the banks employees pension trust fund for which CMD’S AND
ED’S OF THE PUBLIC SECTOR BANKS GOT PERFORMANCE
INCENTIVE .The Bank of Baroda in fact dipped in the pension fund during
2009-2010 and taken out Rs 57 crores to boost the profit which evident from the
annual report of March 2010 OF BOB .and AFIR OF RBI
The amount of shortfall in the
pension fund account as per unconfirmed reports is estimated to be around Rs 100000 crores all public sector banks put
together which needs to be thoroughly probed by appointing independent auditors
by the government to know the exact quantum and to bridge the gap.
Further as stated above the wage
revision settlement also provided for making compulsory deductions from the
wages of the pension optees as well the non pension optees and recovered huge
amount of money in the span of 13 years i.e .from 1-11-1997to27-10 2010 even
then the IBA illegally denied 2nd pension option to voluntarily
retired and resigned employees
AND NOT REFUNDED
THEIR CONTRINUTION WHICH WAS DEDUCTED COMPULSORILY FROM EMPLOYEES WAGES
.
Further .when pension scheme of
RBI is not contributory pension scheme the question of recovering additional
amount in excess of 10% is in violation of pension regulations no 7 & 11 as
it takes care of the provision of pension fund. HENCE this violation needs to
be rectified immediately by refunding the amount to employees.
Section 52 of the pension
regulations stipulates the effective date of payment of pension benefits is the
date following the date of retirement. Hence it is not understood why employees
organisation were bargaining for the cut of date etc in violation of above
stated section 52 of pension regulation and agreed to finance ministry decision
of effective date as 27-11-2009.This clearly shows that neither the employees
organisations ,nor the IBA and the Govt was aware of above regulations when the
cut of date was fixed and hence needs to be rectified immediately.
ON ACCOUNT OF ABOVE IRREGULARITY
I REALIABLY UNDERSTAND THE MEMBERS OF RESIGNED BANK EMPLOYEE’S WELFARE
ASSOCIATION HAVE SOUGHT PERMISSION FROM MINISTRY OF FINANCE FOR PROSECUTION OF
MR.M.V.NAIR THEN CHAIRMAN OF UNION BANK OF INDIA AND CHAIRMAN OF IBA AND MR
M.D. MALLYA CHAIRMAN OF BANK OF BARODA AND PRESENT CHAIRMAN OF IBA AND SOME
MORE OFFICIALS CONNECTED WITH THE ABOVE MATTERS UNDER SECTION 197 OF CODE OF
CRIMINAL PROCEDURE 1973. WHICH I FEEL IS CORRECT.
I am enclosing herewith the RBI
circular DBODNO.Bp;Bc;80/21.04.018/2010/11 dated 9th FEB,2011 ( Annexure no 5.) In respect of
permission granted to Public sector banks from the circular it will be observed
that though the permission is granted to amortise the liability over a period
of five years but actually from the paragraph no 3 (a) (b) it will the observed
that unamortized amount of the year 4 and 5 will be debited to RESERVES OF THE
BANKS on 1-4-2013 and reserves of the bank s will be reduced to the extent of
the unamortized amount carry forward expenditure.
From
the above it is felt that RBI SHOULD HAVE ASKED BANKS TO AMORTISE THE AMOUNT IN
3 YEARS INSTEAD OF 5 YEARS WHICH HAS
FURTHER HELPED BANKS TO BOOST THEIR PROFITS. TO EXPLAIN THIS POINT I WOULD SAY
THE BANK OF BARODA COULD SHOW MORE PROFITS
(as shown in table below)
HAD
THE PENSION LIABILITY WOULD HAVE DIVIDED IN THREE YEARS AS AGAINST FIVE
YEARS.
|
Actual Pension
Liability Amortised as per RBI Guidelines as on 31.03.2011 (Rs in Crores)
|
Amount Charged to
Profit & Loss Account for Existing employees as on 31.03.2011 (Rs in Crores)
|
Balanced Carried
forward to be charged to P&L in remaining 4 years (Rs in Crores)
|
Actual amount to
be charged to p&l account incase it was amortized over 3 years (Rs in
Crores)
|
|
1829.90
|
365.98
|
1463.92
|
609.66
|
|
|
|
|
|
-THE
G.M.(H.R) HAS FILED THE UNDERNOTED WRONG AND CONCOCTED AFFIDAVIT IN HIGH COURT
OF GUJRAT, AHMEDABAD IN DEFENCE OF DENIAL OF 2ND PENSION OPTION TO
VRS OPTEES IS RESPONSE TO THE WRIT/ CASE FILED BY THE BANK OF BARODA RETIRED OFFICERS ASSOCIATION AT THE
INSTANCE OF IBA,AND PROBABLY WITH THE CONSENT OF CMD/ED OF BOB AS IT IS EVIDENT
FROM THEIR TOTAL SILENCE WHEN I BROUGHT CONTENTS OF AFFIDAVIT TO THE ATTENTION
OF ED AND CMD VIDE MY LETTER DATED 16-11-2011. THE AFFIDAVIT READS AS UNDER:-
“THE IBA WHILE ARRIVING AT THE
FRESH OPTION OF PENSION TO CLASSES OF EMPLOYEES INTERALIA CONSIDERED THE
FINANCIAL BURDEN THAT WAS LIKELY TO ARISE,THE FINANCIALPOSITION OF THE BANKS
,THE QUANTUM OF NON PERFORMING ASSETS LIKE OVER DUE LOANSAND TREMENDOUS
OUTSTANDINGS IN THIS BEHALF AND OVERALL BENEFIT WHICH WERE BEING GIVEN TO DIFFERENT
EMPLOYEES AND CAPACITY OF THE BANKS TO PAY IN DIFFICULT TIMES,THE TOTAL OUT
FLOW BY WAY OF PAYMENT OF ARREARS AND FUTURE PAYMENTS AND PAYING CAPACITY OF
THE BANKS AT PRESENT AND MAY BE IN FUTURE”
IN FACT IF YOULOOK AT THE NET
PROFIT ,% OF THE GROSS AND NET NPA
,PROVISION COVERING RATIO OF BANK OF BARODA IT PROVES MY POINT THAT THIS
AFFIDAVIT IS TOTALLY WRONG AND DAMAGING THE REPUTATION Of BANK OF BARODA WHICH
IS OWNED BY THE GOVERNMENT OF INDIA.
FURTHER YOU HAVE ALWAYS BEEN
TELLING THAT “INDIAN BANKING SYSTEM IS STRONGLY REGULATED. “ EVEN THE CMD OF
BOB RECENTLY WHILE ANNOUNCING THE
FINANCIAL RESULTS OF THE BANK FOR FINANCIAL YEAR ENDING 31-3-2012 SAID ON THE
ELECTROINIC MEDIA AND IN THE FINANCIAL ANALYSIS MEET THAT ASSET QUALITY OF BANK
IS ROBOUST.
WHEREAS
SURPRISINGLY ABOVE STATED
AFFIDAVIT HAS BEEN REMOVED WHILE FILING BAKS REPLY TO WRIT FILED BY RETIRED
OFFICERS OF BANK OF BARODA IN THE HIGH COURT OF MUMBAI FOR DENIAL OF 2ND
PENSION OPTION TO VRS OPTEES
ALL THIS CLEARLY INDICATES THAT
BANK OF BARODA AND ITS MANAGEMENT CLEARLY PLAYING THE DOUBLE GAME/DOUBLE
STANDARD AND TRYING TO FOOL THE HIGH COURT JUST TO PROTECT THEIR WRONG AND
ILLEGAL DENIAL OF 2ND PENSION OPTION TO VRS OPTEES WHICH DOES NOT
SPEAK GOOD OF THE BANK MANAGEMENT WHEN IT CALLS ITSELF INDIA’S INTERNATIONAL
BANK .
Though the pension liability of all banks put together has gone up by nearly Rs 18000 crores ( Rs 24381 crores minus Rs6380.50 crores )as
estimated by actuaries and approved by IBA,
NO BANK HAS QUESTIONED THE IBA FOR SUCH A
STEEP RISE IN THE PENSION LIABILITY
AS BANKS HAD GIVEN A BLANKET MANDATE
WITHOUT FIXING ANY UPPER LIMIT ON THE TOTAL LIABILITY . ( copy of BANK OF
BARODA BOARD RESOLUTION IS ENCLOSED ANNEXURE NO 6 )
4.In this connection I invite your
kind attention to AIBOC circular no 40
enclosing UFBU letter no1367/7/12 dated 8th April addressed to
Chairman, IBA (copy enclosed
Annexure no7) wherein
they have pointed out in their letter that “ denial of the legitimate benefit
to all the categories of retires CPF optees viz VRS,COMPULSORY RETIRES amounts
to violation of the understanding reached between the UFBU and IBA on
27-4-2010.The UFBU also felt that IBA
should have consulted unions/Associations before deciding to deny the offer to
retirees of certain categories as these deviation do not conform to the
understandings reached on 27-4-2010 which has resulted in filing various writ
petitions in various courts by the affected employees.
All the above clearly indicates that it was the UNILATERAL AND PERVERSE
INTERPRETATION OF IBA officials alone
and not supported either by RBI or Ministry of Finance and UFBU which is
very serious and cannot be condoned..
I find from the reply of joint
secretary ,government of India ,ministry of finance , department of financial
services ,New Delhi to IBA letter dated
29-4-2010 regarding pension to serving
and retired employees dated
10-8-2010 according government sanction
to implement the terms of settlement /joint note dated 27-4-2010 and he
has not denied 2nd pension option to any of the retirees except
those who join the services of the banks on or after 1st April,2010.
In
spite of above clear cut direction/sanction by the government still IBA WITHOUT
losing any time i.e. on the same day i. e 10-8-2010 issued instructions to
member banks debarring the VRS OPTEES
UNDER OFFICERS SERVICE REGULATIONS 1979 for 2nd pension option
ILLEGALLY WITHOUT ANY SANCTION FROM GOVT ,RBI to deny 2nd pension
option to VRS optees AND APPROVAL FROM UFBU the signatory to the joint note
dated 27-4-2010 the main document /contract deciding the pension settlement AND
DONE GREAT DAMAGE AND INJUSTICE TO VRS OPTEES BY DENYING THE 2ND
PENSION OPTION, WHO ARE INFACT LEGALLY AND RIGHTFULLY ELIGIBLE FOR 2ND
PENSION OPTION FOR WHICH YOUR OFFICE SHOULD CALL FOR THEIR EXPLANATION AND
TAKE NECESSARY ACTION AGAINST IBA OFFICIALS as IBA has no powers to change any
directions given by the Finance Ministry, RBI AND OTHER THAN WHAT IS AGREED IN
THE JOINT NOTE 27-4-2010.
All that IBA can do is
“ UNDERTAKE
THE NEGOTIATIONS ON BEHALF OF BANKS AND NOT ON BEHALF OF GOVERNMENT AND
RESERVE BANK
THE MANDATE GIVEN BY THE BANKS TO IBA IS NOT
TO MISREPRESENT THE FACTS TO MEMBER BANKS WHICH IBA HAS DONE AND IT IS
SURPRISING THAT ALL THE MEMBER BANKS ARE
KEEPING QUIET ON THE WRONG AND ILLEGAL ADVICE OF IBA IN MISREPRESENTING THE
FACTS TOTHEM.
Hence
it is very clear from the above IBA officials have clearly exceeded the
brief given to them and advised member banks to follow illegal and wrong advice
and it is a matter of regret that all
PSU Banks followed this illegal ,arbitrary advice without referring to their
legal department for the reasons best known to them.
However when the affected VRS optees knocked the doors of High courts
for justice all the banks are spending good money by way huge amount of
legal fees to defend their wrong action which is a sad commentary. This is
happening because nobody questions banks for such avoidable expenditure though
it is public money.
5. FURTHER THOUGH neither in the finance ministry communication dated 10-8-2010
referred to above nor in the joint note 27-4-2012 there was any specific
mention of INCLUSION of
officers “Deemed to have retired under clause no 2( x )of Bank ( Employees) Pension Regulations,1995 and any
specific mention of EXCLUSION of officers who took VRS under 2(y) of
Pension Regulations and officers service regulations 1979. As the joint note says another option for joining the existing
pension scheme shall be extended to those who were in service of the bank prior
to 29th September,1995 in the case of nationalised banks and ‘RETIRED’ after that date and prior to the date
of this joint note.
In spite of above the Banks
allowed 2nd Pension option without any reference to Government or RBI
Etc. to officers deemed to have retired who are CMD’S AND ED’S OF PSU
banks/retired CMD/ED THOSE WHO HAD NOT OPTED FOR PENSION EARLIER.
To quote a few Names:
1. MR M.D. MALLYA CMD OF BOB AND PRESENT
CHAIRMAN OF IBA
2.
Mr.K.Ramakrishnan C.E.O OF IBO and MR
Alok Kumar Misra vice chairman of IBA and is
CMD OF Bank OF India..
Mr.Mallya
has been sanctioned 2nd pension
option by CORPORATION BANK where he was working as general manager and
subsequently appointed as ED/CMD of PSB and MR Ramakrishanan C.E.O IBA and
Shri Alok Kumar Misra is sanctioned 2nd PENSION OPTION BY Bank
of India where they were working as general manager and there after appointed
as ED/CMD OF PSB. This information of
opting 2nd pension option is given to me as per letters I have received
from the respective banks under RTI Act 2005 which are in my possession..(
ANNEXURE NO 8 & 9 ENCLOSED )
Mr Mallya CMD
of BANK OF BARODA DENIED 2ND PENSION OPTION TO VRS OPTEES OF
BANK OF BARODA IN CONTRAVENTION OF SANCTION OF BANKS BOARD OF DIRECTORS AND
SANCTION BY THE JOINT SECRETARY OF THE MINISTRY OF FINANCE WHICH CALLS FOR HIS EXPLANATION AND CLEARLY
PROVES THAT HE JOINED HANDS WITH IBA OFFICIALS IN DENYING THE 2ND PENSION OPTION TO
VRS OPTEES WHICH IS ILLEGAL ALSO.
Another
point to note here is all these above stated officials are the direct beneficiaries of 2nd
PENSION OPTION and as such can be said to have had the vested interest in
getting 2nd Pension option
sanctioned by the government as there were interested in opting 2nd
pension option and in such a situation from a Corporate Governance
perspective, these officials should not have been party to pension
negotiation committee / signatories to the joint note.
It is therefore felt that this
is the reason why they have kept the net
financial gap on account of 2nd pension option for working and
retired officers at just Rs 6380.50 crores a very nominal amount as
mentioned in the joint note dated 27-4-2010( as against Rs 26000crores as
estimated by earlier actuaries and that is the reason why previous CEO MR
SINOR OF IBA TURNED DOWN THE 2ND PENSION OPTION ON 1-12-2007)
which was submitted to government though
the final figure has touched the figure of Rs 24381 crores ON
IMPLEMENTATION which is very close to the figure estimated by earlier actuaries
and which has gone up by 382% which is unheard in any wage/pension settlement.
Thus
it will be observed from the above,
OFFICIALS
REPRESENTING THE MANAGEMENT OF PUBLIC SECTOR BANKS TOOK CARE OF THEMSELVES BY MISUSING THEIR OFFICIAL POSITION
TOTALLY IGNORGING THE INTEREST OF
BANK /GOVERNMENT WHO APPOINTED THEM AS CMDS
AND
DENIED THE 2nd PENSION OPTION ILLEGALLY TO VRS OPTEES WHO ARE MOSTLY SENIOR CITIZENS IN
THE AGE GROUP OF 65 AND ABOVE AND ARE
STRUGGLING TO MAINTAIN THEIR FAMILY BUDGET and created
discrimination among two classes of RETIREES which is illegal and arbitrary
FURTHER
I DO NOT KNOW AT WHOSE REQUEST THE GOVT HAS INCREASED THE PENSION AMOUNT OF
WHOLE TIME DIRECTORS OF PUBLIC SECTOR BANKS FROM 1-4-2012 PAYABLE ON SALARY
DRAWN AS CMD /ED INSTEAD OF ON THE SALARY DRAWN AS GM AS PER GOVT NOTIFICATION FNO
13/5/2009/BO.1 DATED 3-4-2012
BUT
THE TOP OFFICIALS OF FINANCE MINISTRY
ARE NOT FINDING TIME TO OFFER 2ND PENSION OPTION TO VRS OPTEES
INSPITE OF SEVERAL REPRESENTATION SENT TO HON’BLE FINANCE MINISTER, HON’BLE
PRIMEMINISTER ,GOVERNOR RBI ETC
In
view of what is stated above,
Can not the above action be called as a
systematically and well planned financial fraud committed by the members of IBO
WHO REPRESENTS PUBLIC SECTOR BANKS, the CMDS OF PSU BANKS on the PSU banks /GOVT for their
personal financial gain???
Also,
do these Executives /Officials have any Moral Right to continue in PSU Banks
/IBA as Role Models needs to be viewed urgently and seriously by the Govt and
RBI.
6.Though
I had brought clearly most of the above irregularities as early as in June
2011vide my letter dated 4-6-2011on the above subject addressed to our Hon’ble
Prime Minister in which I had clearly asked to carry out through investigation
by an independent agency like C.B.I in view of fraud committed by the IBA
management team no action seems to have been taken though the letter was
forwarded to your department FOR NECESSARY ACTION which is evident from the
fact that my letter was forwarded by
MR.Sant Ram section officer of your ministry to Bank of Baroda in JANUARY 2012
after a gap of six months with instructions to send a suitable reply to me
instead of investigating the matter as requested by me in my letter.
To
this Bank of Baroda replied to me vide their letter BCC/HRM/HR/A/P/26/629 dated
16-1-2012 as under ‘On perusal of your said representation dated 4-6-2011, we
observe that the issue/grievance raised by you is related to IBA and we are not
in a position to comment on the same’ (copy of BoB letter is enclosed Annexure
no 10) To this reply I immediately wrote a letter to Mr. Sant on 2nd
FEB,2012 which was received by his office on 6-2-2012 as the same was sent by
speed post and thereafter followed by my various e. mail reminders dated
5/3/2012,24/3/2012.3/4/2012 for which so far I have not yet received any
replies which is very strange. Total silence in the matter needs investigation
by you.
7.
I may also inform you that on 29th March, 2012 I had sent my
detailed appeal MENTIONING MOST OF ALL
THE ABOVE IRREGULATITIES to the board of directors of the Bank of Baroda
including to MR. ALOK Nigam, joint secretary of your ministry who is on the
board of Bank of Baroda AND MR
SEN,REGIONAL DIRECTOR RESERVE BANK OF INDIA ,WHO IS ON THE BOARD OF BANK BARODA
which WERE received by THEIR offices on 2-4-2012 with a request to discuss the
appeal in the board meeting I understand
my appeal was taken up by one of the directors in the board meeting held on
13-4-2012 at Bangalore BUT I REALIABLY UNDERSTAND the deliberations and the
reply given by the chairman is not recorded in the minutes which is against
corporate governance .and no reply has been sent to me by the bank in spite
of my several telephonic and e. mail reminders sent to secretary of the board.
A copy of this appeal was also sent to Your office which was received by your
office as per acknowledgement sent by your office vide D.NO 64102 DATED 17TH
April,2012. HERE I MUST APPRECIATE THAT YOUR OFFICE COULD FIND TIME TO SEND
ACKNOWLEDGEMENT BUT THE CMD OF THE BANK HAD NO COURTSY EVEN TO ACKNOWLEDGE
RECEIPT OF MY APPEAL.
In view of the above ;
1. I
urge you to sanction 2nd pension option to all the VRS optees immediately AS PER
SECTION 52 OF PENSION REGULATIONS 1995 which is their
right as a social security and as decided by the constitutional bench of
Supreme Court of India in 1982 that
pension is employees right and not deferred wages nor a favour or concession
shown by the employer and
2. Initiate
immediate investigation in the matter and
take /arrange to take appropriate action against officials who were on
the personal committee of IBA REPRESENTING the PSU BANKS/members of IBA AND WHO
HAVE NOW TAKEN 2ND PENSION OPTION.
3. IN
THE END FROM THE ABOVE GIVEN FACTS IT IS CLEAR THAT THECMD’S OF PUBLIC SECTOR
BANKS WHO WERE PARTY TO PENSION SETTLEMENT AS CHIRMAN /VICE CHAIRMAN/PERSONNEL
COMMITTEE MEMBER OF IBA HAVE COMMITTED A
FRAUD ON THE GOVT MISUSING THEIR OFFICIAL POSITION FOR THEIR OWN BENEFIT .WHICH
HAS RESULTED IN ADDITIONAL EXPENSES OF RS18000/-CRORES TO ALL THE PUBLIC SECTOR
BANKS PUT TOGETHER FOR WHICHACTION AGAINST THEM IS WARRENTED.
HENCE
FROM ALL THE ABOVE GIVEN FACTS IT CAN BE SAFELY CONCLUDED THAT A LARGE SCALE
FINANCIAL FRAUD IS COMMITTED BY IBA BY JOINING HANDS WITH CMDS OF PUBLIC SECTOR
BANKS ON THE EMPLOYEES TRUST FUND ACCOUNT/ON VRS OPTEES/ON CRS &
RESIGNEES BY ILLEGALLY DENYING THE 2ND
PENSION OPTION, ON THE BANKS AND THE GOVERNMENT WHICH IS NO WAY LESS THAN “FAMOUS FRAUD COMMITTED BY SATYAM LTD”
Thanking
you,
Yours
faithfully,
S.Ramachandran
Former GM BOB &
VRS OPTEE AGE 74
SENIOR CITIZEN.
Encls: as above.
