NEWS LETTER OCTOBER 2016 demands related to DA Neutralisation for pre 2002 retirees, Revision in family pension & Pension updation and one more option of pension to resignees who were

WELCOME CHANGE

With Rs. 1.44 lakh crore in its kitty, the National Pension System, which the Centre is positioning as the default market-linked pension system for all Indian citizens, is growing in

both popularity and size. It is, therefore, good to see the Pension Fund Regulatory and Development Authority (PFRDA) focusing on improving the scheme’s architecture to render it more effective and investor-friendly. The PFRDA is now seeking to appoint ten pension fund managers to manage NPS assets in place of the present eight, and plans to change the

selection process to give greater weightage to technical skills and less to costs. These are welcome changes indeed.

To start with, expanding the number of pension fund managers (PFMs) available on the NPS menu will result in more choices to investors, and foster greater competition. NPS investors

currently have the flexibility to choose from a menu of eight PFMs; based on their portfolio disclosures and returns, they can also switch freely between them, thus keeping them on their toes. While the present crop of PFMs have delivered healthy returns, return differentials between them have been quite narrow and new managers may bring differentiated strategies

to the table. Two, it is also good to see the regulator abandon the obsession with low costs and lay greater store by capabilities in selecting its PFMs. In the new round of bidding, sponsors will have to meet basic eligibility criteria (such as a five-year track record in fund management and a Rs. 50 crore networth) and score over 70 per cent in technical

capabilities (investment experience, team and performance) before their commercial bids (on fees) will even be considered. On fees, instead of selecting the lowest bid and forcing all PFMs to match it, prospective bidders have been allowed to bid realistic fees subject to a ceiling of 0.10 per cent (of assets). While this represents a tenfold rise in charges for investors, it is

likely to pay off in the form of more skilled players entering the fray and hopefully delivering better results through more active portfolio management. A 10-basis points fee is certainly not steep when compared to the 225-300 basis points charged by the active mutual fund industry. The 1-basis point fee accepted in the last round kept away some serious players

and may prevent PFMs from deploying their best talent in managing NPS assets.

Though prospective bidders are clamouring for even higher fees, the PFRDA should look to sweeten the deal by appointing the eligible PFMs for a longer term (maybe even perpetuity), with a provision to replace laggards. Investors decide to invest in any market-linked product based on its track record over two market cycles (typically 10 years). But the NPS’ system of reshuffling its PFMs every five years is unsettling and effectively renders a PFM’s track record irrelevant. A longer tenure will also ensure that prospective bidders take this mandate seriously and invest long-term capital and talent in order to deliver a better experience to investors.

All India RRB Officers’ Federation “JGGP HOUSE”, Raja Rammohan Road, Hakimpara, Siliguri – 734001(West Bengal)

E-MAIL: [email protected]/[email protected] WEB SITE: http://www.airrbof.org

2| P a g e

EXCERPTS FROM AIRRBOF CIRCULARS

Circular # 62:2016 3rd September 2016

STRIKE OF 2ND SEPTEMBER 2016 DEFERRED NEXT DATE OF CONCILIATION PROCEEDING ON 17TH NOVEMBER 2016

“We reproduce hereunder the text of All India Bank Officers’ Confederation Circular No. 49 dated 2nd September, 2016.

All India Bank Officers’ Confederation (AIBOC) along with few other Trade Unions in Banking Sector took a decision to participate in the General Strike on 2nd September, 2016, call for which was given by Central Trade Unions except B.M.S. However, only AIBOC decided to include Bank specific issues in its strike notice to IBA dated 16th August 2016 which has been circulated to all affiliates earlier. This resulted into RLC (C) Mumbai calling us and IBA for conciliation meeting on 1st September 2016 at Mumbai.

Conciliation meeting was attended by Com. Y. Sudarshan, Com. Dilip Saha, Com. Sanjay Manjrekar, Com. Ram Kumar Sabapathy and Com. M.B. Tripathi on behalf of AIBOC. On our important demands related to DA Neutralisation for pre 2002 retirees, Revision in family pension & Pension updation and one more option of pension to resignees who were excluded when it was extended to VRS optees, IBA took an obstinate stand stating that they do not have mandate from individual banks to discuss these issue. This was vehemently countered by us with facts and convinced Regional Labour Commissioner (Central) into directing IBA to take further steps to resolve the above demands immediately and resolve other issues raised in the Notice before the commencement of the next Bipartite settlement. On the issue of delay in appointment of Officer Nominee Directors in the Boards of Banks, RLC directed IBA to advise all concerned banks to take steps for ensuring immediate appointment of Officer Directors on their Boards which has been pending for a long time.

While informing the assurances of the Minister of State (Independent Charge), Labour & Employment (conveyed vide his letter dated 30th August 2016, copy of which was specifically sent to AIBOC Central Office) during Conciliation Meeting of taking corrective steps on various labour related issues including starting tripartite discussion with all stake holders, the conciliation officer and RLC (C), Mumbai himself also assured that our concern and apprehension on the move of privatization of Public Sector Banks, Mergers of Public Sector Banks, Labour Law reforms and FDI in Financial Institutions shall be conveyed to the appropriate authority. On the basis of specific direction to IBA to resolve issues within specific time frame and on the appeal by RLC (C), with direction that the conciliation proceeding will continue on the next date i.e., 17th November 2016, the proposed strike of 2nd September 2016 was deferred.

Comrades, it is AIBOC alone which had included Bank specific demands for which only AIBOC & IBA was called for conciliation meeting. Through our successful militant participation on strike on 29th July 2016 and thereafter through the historic ‘March to Parliament’ rally on 9th August 2016, we have brought the focus back to the core issues concerning Public Sector Banks and shall continue to take all such stand in the future to protect the interest of the officers.



3| P a g e

We thank the membership of all affiliates for their militant and determined approach towards all agitation calls given by us and for remaining united in spite of provocations from various quarters. The scanned copy of the signed minutes of the proceedings is attached, herewith, this circular.”



4| P a g e



5| P a g e


4TH BIENNIAL CONFERENCE OF JHARKHAND GRAMIN BANK OFFICERS’ ASSOCIATION HELD SUCCESSFULLY AT RANCHI ON 27TH AUGUST, 2016

The capital city of Ranchi of the State of Jharkhand is also the birth place of AIRRBOF. The Foundation Conference of All India RRB Officers’ Federation took place in the historic city way back on 23rd August, 1987 in the august presence of Com. R.N. Gobole, General Secretary, AIBOC. In the same city and also in the month of August, 2016, the 4th Biennial Conference was held in a grand style at Digambar Jain Smriti Samity Hall at 11 AM.

The welcome address was rendered by Com. Ajit Kumar, Secretary of the Reception Committee. With the lighting of traditional lamp by the dignitaries, the open session got underway. Com. S.K. Pathak, General Secretary, AIBOC, Jharkhand State Committee addressed the gathering. You are aware that AIRRBOF is taking conscious efforts to get the Pension Scheme implemented in RRBs. With this end we have prepared details of the new working of Pension Scheme and submitted before Govt. of India, DFS and held series of discussion with Sr. Officials of DFS which were found to be highly effective and fruitful. A power point presentation of our approach was prepared by AIRRBOF under the auspices of Com. Srijan Pal, Vice-President, AIRRBOF. Com. Pal presented before the jam packed hall the presentation which was highly appreciated. The quarries of the members were clarified by Com. General Secretary, AIRRBOF.

Shri Brijlal, Chairman, Jharkhand Gramin Bank in his address shared with the audience the challenges before the officers, the tough task ahead and called on the officers to come out of the ignomity of loss suffered by the Bank.

Com. S.K. Bhattacharjee, GS, AIRRBOF in his brief but informative address brought out the entire details of AIRRBOF move for parity in other allowances and in respect of all other benefits. He specially placed emphasis on the development of the Bank and our Association so that we can take care of the development of the Bank and the welfare of the officers. He also urged upon members to increase the membership and consolidate our Association and Federation which is our biggest insurance against uncertain future.

The meeting was felicitated by Com. J.D. Jha, President and Com. Ashok Prasad Singh, General Secretary which remained highly spirited.

The open session came to an end with vote of thanks by Com. Dhananjoy Kumar Singh, Dy. General Secretary.

Post lunch, delegation session was held amongst much enthusiasm. The Report of the General Secretary and Statement of Accounts were presented, debited and approved. Later on, the elections to the Team for the next Biennial Period was elected through a process of election by Returning Officers led by State Secretary, AIBOC, Jharkhand State.

A team of principal office bearers led by Com. Bhola Dhani as President and Com. Dhananjoy Kumar Singh as General Secretary were elected after due process of voting. AIRRBOF wishes the new team all success and pledge full support and co-operation.



6| P a g e

Circular # 64:2016 12th September 2016

2ND TRIENNIAL CONFERENCE OF BANGIA GRAMIN BIKASH BANK RETIREES’ ASSOCIATION (BGBRA) HELD AT MAHAJATI SADAN, KOLKATA ON 11TH SEPT, 2016 – A GRAND SUCCESS

The Retired officers & employees of Bangia Gramin Bikash Gramin Bank got themselves organised way back in the year 2013 to ventilate their demands and strive to better the lot of retired officers & employees under the banner of BGBRA.

The 2nd Triennial Conference of the BGBRA was conducted amongst much enthusiasm at Mahajati Sadan. The conference was attended by retired officers & employees of the Bank from all parts of the area of operation of the Bank. The leaders of AIRRBOF, BGBRA, AIBPRC & AIRRBPF was called to the dias and offered flower bouquets.

The welcome address was rendered by Com. Swapan Sarkar, General Secretary of the Association. The Conference was inaugurated by the address of Com. S.K. Bhattacharjee, General Secretary, AIRRBOF who dovetailed in his address all the developments in regard to the efforts of AIRRBOF. He exuded confidence that the sustained efforts of the AIRRBOF would definitely ensure Pension Parity. Com. Aparesh Bhattcharya, Treasurer, AIBPRC, WB State Unit assured full support to the fighting comrades of RRBs. Com. Uday Adhurya, President, BGBRA in his spirited address enthused the membership.

A souvenir prepared for the occasion was officially published by Com. S.K. Bhattacharjee, GS, AIRRBOF and assisted by Com. Srijan Pal, Vice-President, AIRRBOF. Com. Srijan Pal addressed the Conference and shared the success achieved by Retired Employees Association of Paschim Banga Gramin Bank. Power Point presentation was made by Com. Pal, Vice-President, AIRRBOF on workability of the Pension Scheme.

Vote of thanks was rendered by Com. Nikhilesh Mishra.

In the delegate session the Report of the General Secretary and the Statement of Accounts were placed. After deliberation the same was approved unanimously. Team of the office bearers for the next Triennial Period was elected with Com. Uday Shankar Adhurya as President and Com. Swapan Sarkar as General Secretary. The Conference was concluded thereafter.

AIRRBOF wishes the new team all success and pledges full help & support.


FALSEHOOD & VITUPERATIVE ATTACK UNLEASHED BY COMPOSITE UNION

You are aware that in accordance with the provisions of the Regulation 32(a) of the Officers & Employees Service Regulations, 2013/2013 applicable in all RRBs no officer is entitled to become member of any Association having Workmen as member or having affiliated directly or indirectly to any Organisation at the Apex Level having workmen also as member. In accordance with the provision of the Service Regulation, All India RRB Officers’ Federation (AIRRBOF) is the only Association/ Federation of the officers in the RRBs as rest of the Apex Association/Union/Organisation are composite in nature having workmen as member in another compartment. Therefore, AIRRBOF is the sole representative of the officers working in 56 RRBs.



7| P a g e

The Interim Application (IA) submitted before the Hon’ble Supreme Court by AIRRBOF was made for the practical point of view of breaking the stalemate on the Pension Case and refutes the attempt of Union of India to allow Pension to a section of the officers & employees of RRBs and deny the same to the rest of the RRBs linking it with profit & CRAR.

We have established that the data relied upon by NABRD in arriving at the available fund for Pension Corpus is much below the fund available. The Pension Fund available at the RPFC level have not been taken into account by NABARD. AIRRBOF obtained the data on Pension Fund at the disposal of RPFC by RTI and we demonstrated before the Addl. Secretary (FS) during the meeting with us on 17th August, 2016 that the entire Pension Corpus needs to be reworked. AIRRBOF made power point presentation before DFS officials on workability of Pension Fund and scope for Pension Payment to all officers & employees of RRBs.

AIRRBOF leadership is much more concerned than so called champions of RRB employees in understanding that the cardinal principles established by NIT and the case before the Hon’ble Supreme Court having IA No. 1 in Transfer Petition (c) No. 403/1999 in the matter of All India Regional Rural Bank Officers’ Federation & Ors Vs Govt. of India & Ors, the judgement delivered by Hon’ble Supreme Court corum Justice G.B. Pattanaik, Justice S.N. Phukan & Justice S.N. Variava on 7th March , 2002. It is a matter of record that the efforts of AIRRBOF only ensured continued parity in salary & allowances.

Addl. Secretary (FS) during the Meeting on 17th August, 2016 agreed that after reworking the entire matter the real gap, if any, can be arrived at. We also pointed out that NABARD had relied on Profit figure upto 2013-14 and if profit for 31.03.2015 & 31.03.2016 is considered then there shall be no gap in Pension Corpus. Certain RRBs like Nagaland RRB, Manipur RRB, Ellaquai Dehati Bank (Kashmir) may have problem but that burden had to be borne by the Union of India as the economy of those States run on subsidy provided by Govt. of India.

The Union which had, in the past, already introduced Pension as Dewali, Dushehara, Id and Christmas gift do not have any right to question the IA submitted by AIRRBOF. Such Union (AIRRBEA) declared that Pension was released by then Finance Minister, Shri Pranab Mukherjee which is actually a Pension Scheme related to Profit/Loss of RRBs.

Now, realising that with the efforts of AIRRBOF at last RRB officers & employees are expected to get Pension benefit without any discrimination, they are hell bent to thwart the move for their vested interest. Such Trade Unions should be thrown out from the RRBs as they are similarly responsible like Govt. of India to deny Pension benefit to officers & employees of RRBs without discrimination.

All rank and file of RRBs should demand in one voice early resolution of Pension for all as per the Interim Application (IA) submitted by AIRRBOF.


PROVISION OF FUND FOR INFUSION OF CAPITAL TO RRBS TO MAINTAIN STATUTORY CRAR LEVEL

We have written the following letter to Ms. Anjuly Chib Duggal, Secretary, Dept. of Financial Services, Govt. of India on the captioned subject. We reproduce the letter for your information & necessary action.



8| P a g e “You would kindly appreciate that Govt. of India allocated Rs. 25000/- Cr. for infusion as capital in Public Sector Banks so that PSBs can maintain CRAR level at the stipulated rate. It appears from the news reports that in respect of several PSBs CRAR slipped due to increased GNPA and the Govt. of India infused capital to maintain CRAR level. In order to highlight our point we can take the example of IOB, United Bank of India, Central Bank of India and Corporation Bank where Govt. of India infused capital to the extent of Rs. 3101/-, Rs. 810/-, Rs. 1033/-, Rs. 1729/- & Rs. 677/- crores respectively.

In the contrary, in respect of RRBs no allocations have been made for capital infusion even though GNPA of RRBs is surging and the CRAR level is under threat. Govt. of India is major stake holder in RRBs and the step motherly attitude in respect of RRBs is really condemnable. We, therefore, request you to please take up with all appropriate authorities so that immediate funding is arranged for capital infusion to RRBs so that at least 9% CRAR can be maintained by all RRBs. In the same breath we would like to mention that if any State Govt. is reluctant to release fund for capital infusion to RRBs the holding of the State Govt. to the extent of 15% should be taken over by Govt. of India or Sponsor Bank forthwith. We trust that you shall take immediate action.” Circular # 67:2016 19th September 2016

AMENDMENT OF RRB OFFICERS’ EMPLOYERS SERVICE REGULATIONS – CHANGE IN THE LEAVE RULES

We have written the following letter to Shri N.P. Mahapatra, General Manager, National Bank for Agriculture & Rural Development, Institutional Development Department (IDD) on the captioned subject. We reproduce the letter for your information & necessary action. “We beg to draw your kind attention to Regulation 60(1) of RRB Officers & Employees Service Regulation where in an officer or employee is entitled to avail four days casual leave at a time with a proviso that holidays and Sundays may not be combined with such leave in such a manner as to increase the absence at any one time beyond six days. The Officers’ Service Regulation (OSR) applicable to the officers of Banking Industry prescribes that “casual leave cannot be availed for more than 4 days at a time irrespective of number of holidays intervening suffix or prefix”. There is no provision for putting ceiling on the days of absence at any one time. Such discrimination in the provision of Service Regulation in RRBs needs to be amended to put it at par with the provisions of ORS as applicable in the Banking Industry. We shall request to please suitably amend the RRB Officers & Employees Service Regulation to end the discrimination.”



9| P a g e


AIRRBEA & AIGBEA/AIGBOA CONSPIRED TO BREAK UNITED MOVEMENT OF OFFICERS & EMPLOYEES OF RRBS –

DECISION TO OBSERVE STRIKE IS ONLY BY TWO UNIONS AS A GIMMICK In the last Meeting of UFRRBU it was decided that next Meeting shall take place on 22nd September in New Delhi to take stock of the situation and decide course of action depending on the attitude of DFS. In the meantime, in accordance with the decision of the Central Committee of our Federation, we initiated move for negotiated settlement of Pension issue. AIRRBOF is the only Apex Trade Union in RRBs to try to break the stalemate on Pension issue. We submitted an interim application before the Hon’ble Supreme Court and it was recorded as IA No. 9/2016. The DFS shall have to file counter affidavit to the IA that shall form the basis for payment of Pension. The move of AIRRBOF shall logically settle the Pension issue before the Hon’ble Supreme Court. The move exposed the conspiracy of AIRRBEA who never wanted Pension issue to be settled and accordingly circulated false information. We have narrated in detail the background of our filing the IA No. 9/2016 and the true character of AIRRBEA in circular no. 65/2016. The General Secretaries of AIRRBEA & AIGBOA camped in New Delhi from 20th September, 2016. They tried to meet officials of DFS but were refused appointment. They could not gather any development on the issues concerning RRBs. Due to their failure to meet DFS officials they circulated the story that there was no progress on the issues involved in the earlier strike notice which was deferred at the insistence of so called Convenor of UFRRBU Com. D.N. Trivedi who failed to discharge his duties as Convenor as he was found to be partisan and always practiced forgery and deceit. The Meeting of UFRRBU held today afternoon in New Delhi was not attended by any representative of AIGBEC, AIGBOC & NCRRBE. General Secretary, AIRRBOF attended the Meeting. He insisted that as per decision at the time of formation of UFRRBU the position of convenorship is to be rotated every year and all the decisions taken in the Meeting must be recorded in black & white. However, Com. D.N. Trivedi did not follow any democratic norms and none of the decisions of UFRRBU are recorded. Com. General Secretary, AIRRBOF mentioned that as per original programme, he came to New Delhi today and he is not privy to the so called talks the General Secretaries of AIRRBEA & AIGBOA held with DFS. He insisted that let the leaders of UFRRBU visit DFS on 23rd instant and assess the situation and decide further course of action in the next Meeting as three constituents of UFRRBU are absent today. However, Com. D.N. Trivedi and Com. Sayeed Khan was adamant that despite of the forceful view point of General Secretary, AIRRBOF they have to give call for strike as they anticipated that as per IA No. 9/2016 filed by AIRRBOF the Pension issue shall be settled and they would loose their ground. Com. Sayeed Khan practically insulted Com. General Secretary, AIRRBOF in the Meeting and openly said that come what may they shall observe strike.



10| P a g e

Friends, the leaders of AIRRBEA, AIGBEA & AIGBOA are only taking the decision of strike and other four Apex Trade Unions who were part of so called UFRRBU are not party to such decision. Hence, General Secretary, AIRRBOF had to quit the so called Meeting of UFRRBU due to such humiliation. General Secretary, AIRRBOF shall meet DFS officials on 23rd September, 2016 to elicit the present position. The entire situation shall be renewed by the Central Committee of AIRRBOF in its next Meeting and accordingly we shall decide further course of action.

AIRRBOF is confident that Pension issue shall be resolved by Hon’ble Supreme Court as per modalities set out in IA No. 9/2016 filed by AIRRBOF. The issues of other allowances etc. are in positive state but being delayed due to beaurocratic process. Friends, we cannot compromise the interest of officers to suit the leaders of some Trade Unions. AIRRBOF is confident to resolve the issues by negotiation within reasonable time.


4TH BIENNIAL CONFERENCE OF PRAGATHI KRISHNA GRAMEENA BANK ADHIKARIGALA SANGHATHANE

HELD AT CHITRADURGA ON 25TH SEPTEMBER, 2016

Pragathi Krishna Grameena Bank is 2nd best RRB in the country running neck to neck with Kerala Gramin Bank to reach the top position. The 4th Biennial Conference of our affiliate in the Bank, PKGBAS, was organised in a grand manner at Hotel Durgada Siri, Chitradurga (Karnataka) in a grand style on 25th September, 2016. The auditorium of the Hotel was tastefully decorated and packed to the capacity by the officers of the Bank from 11 districts of the State.

The dias of the Meeting was adorned by Senior Executives of Canara Bank, the Sponsor Bank, AIBOC & AIRRBOF leadership. Shri Dinabandhu Mohapatra, Executive Director, Canara Bank, Shri Ravindra Bhandary, General Manager, PC & FI, Canara Bank and Shri C.P. Giri, General Manager, HR, Canara Bank represented Canara Bank. The Chairman of the Bank, Shri R. Ravikumar was conspicuous by his presence. Com. G.V. Manimaran, General Secretary, Canara Bank Officers’ association & Sr. Vice-President, AIBOC & Com. J.S. Jagadeesh, Vice-President, CBOA represented AIBOC. Com. S.K. Bhattacharjee, General Secretary, AIRRBOF & Vice–President, AIBOC was also remained present in the General Body Meeting. Com. J.M. B. Raju, General Secretary, Saptagiri Grameena Bank Officers’ Organisation attended the invocation by Smt. V.P. Prafulla and welcome address by the General Secretary of PKGBAS, Com. Dharampal Kumar Shetty the Meeting got underway. Introductory remarks were made by Com. P.N. Madhusudan, President of the Unit. Shri R. Ravi Kumar, Chairman of the Bank addressed the officers and shared his perception. He also called upon the officers to extend all efforts to reach the position of the top RRB of the country.

Com. S.K. Bhattacharjee, GS, AIRRBOF spoke briefly in the open session to point out the role of the Federation in ensuring the benefit to officers of RRBs. He expressed his confidence that our affiliate in PKGB shall also grow both in number and organisational strength to provide required protection to the officers. The Meeting was felicitated by General Managers of Canara Bank, Shri C.P. Giri and Shri Ravindra Bhandary. Com. J.S. Jagadeesh, Vice-President, CBOA also felicitated. Com. G.V. Manimaran in his forceful address brought out the entire gamut of the issues before the Bank officers as well as problems faced by RRBs. He assured that he shall continue to pursue means to extend all benefits to RRB officers.



11| P a g e

Shri Dinabandhu Mohapatra, Executive Directors, Canara Bank in his Key Note address lauded the efforts of RRB officers and exuded confidence that PKGB shall excel in all parameters. He assured full cooperation to the Bank and its officers in the efforts to improve the position.

The open session came to an end with vote of thanks rendered by Com. Avinash Upadhaya.

Post lunch, delegate session took place. Com. S.K. Bhattacharjee spoke at length on the activities of AIRRBOF, its contribution to improving the service condition of RRB officers, the benefits of other allowances an also of terminal benefits. He put forward the details of the Interim Application No. 9/2016 filed by AIRRBOF before the Hon’ble Supreme Court and expressed his confidence that the Pension case shall be decided by Hon’ble Supreme Court as per our prayer. He came down heavily on AIRRBEA and other organisations who had criticised AIRRBOF. The participants were highly appreciative of the efforts of AIRRBOF. Thereafter, the retired officers were felicitated one by one.

In the delegate session General Secretary’s Report was placed along with Statement of A/cs. It was deliberated at length by members. The Report and the Statement of A/cs were approved. A new team of Office Bearers were elected for the next biennial period with Com. P.N. Madhusudan as President, Com. C. Anjanappa, Working President and Com. H. Dharmapal Kumar as General Secretary.

AIRRBOF wishes the new team all success and pledges full help & support.

PRESS CORNER:

NO CLOSURE OF BRANCHES POST-MERGER, STATE BANK CHIEF ASSURES STAKEHOLDERS

State Bank of India Chairman Arundhati Bhattacharya on Friday emphatically said that the amalgamation of associate banks with SBI will not lead to closure of branches but only relocation of some of them.

Observing that the amalgamation is going as per plan, Bhattacharya said her bank will not let branch licenses go waste by closing the branches. She termed reports about closure of branches as ‘disinformation’.

Citing the example of metros, wherein at some locations branches of SBI and its associate banks are ‘cheek by jowl’, the SBI chief emphasised that in such cases the branch – irrespective of whether it belongs to SBI or to an associate bank – that is doing more business, will be allowed to continue while others will be relocated.

SBI is India’s largest bank, with a network of over 17,000 branches and offices. The five associates – State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, and State Bank of Travancore – have a collective network

of over 6,000 branches.



12| P a g e

Bhattacharya observed that change always causes anxiety among stakeholders. However, there should be no reason to worry due to the amalgamation as SBI will neither close down branches nor retrench employees. Employees’ salary too, will be protected.

SBI expects to complete the amalgamation process by March-end 2017. Elaborating on the topic of consolidation, Bhattacharya, in an interview to BusinessLine last month, had said there are lot of inefficiencies right now on account of duplication.

She observed that, “If you have six corporate centres, six treasuries, six of everything, then if you bring it down to one of everything, there will obviously be some savings. It (savings) will come in the corporate centre (that is, in the administrative set-up), it will come in treasury, it will come in the large corporate and mid-corporate (verticals).

“We will get skilled staff. So, if treasury gives us some people, large corporate gives us some people who are well-trained, we can deploy them in the proper places so as to make our operations better. To that extent, I think overlaps will be taken out and inefficiencies will decrease.”

Source – The Hindu Business Line, 10th September 2016.

GST COUNCIL APPROVED

The Union Cabinet on Monday approved the setting up of the crucial Goods and Services Tax Council that will take all key decisions relating to the indirect tax levy including rates and exemptions as well as the subsequent Centre, State and Integrated-GST laws.

Finance Minister Arun Jaitley has also called the first meeting of the GST Council on September 22 and 23 in New Delhi, said an official release.

The GST Council will be led by the Union Finance Minister and include State Ministers as members.

“Today, I have personally written to State governments to nominate one Minister to the GST Council. We have set a time limit of two months so that by November 22, the Council can discuss and take a final decision on all aspects of the tax,” said Revenue Secretary Hasmukh Adhia.

Speaking to reporters, he also expressed confidence of meeting the April 1, 2017 deadline for GST. “As of now, we are ahead of the time schedule. The main priority is to call for as many meetings as possible of the GST Council now,” he said, adding that there is no formal demand from industry to extend its roll out date.

The Finance Ministry had on September 10 notified Section 12 of the Constitution Amendment Act for GST that brought the Council into effect from Monday.

“The Cabinet also decided to provide for adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government,” said the release, adding that the Secretariat of the GST Council will be in New Delhi.



13| P a g e

In addition, it has also appointed the Revenue Secretary as the ex-officio Secretary of the GST Council and approved including Chairperson, Central Board of Excise and Customs (CBEC), as a permanent non-voting invitee to all proceedings of the Council.

It has also approved creating one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).

The government has, however, not taken any decision on the fate of the Empowered Committee of State Finance Ministers.

“All discussions on GST will take place in the GST Council and discussions on whether the Empowered Committee will continue will be taken later,” Adhia said.

States are keen that the GST Council should be separate from the Empowered Committee, which can function as a platform for States to discuss their regional issues.


FINMIN TO SEEK CABINET NOD FOR SINGLE BUDGET

The Railway Budget of 2016-17 may have been the last independent one for the national transporter as the Finance Ministry moves to seek Cabinet approval for merging it with the General Budget.

But the new General Budget will not affect the financial autonomy of the Railways, which will continue to be responsible for its finances, including profits and the wages/pension bill. The combined document may highlight key proposals of the Railways for the ensuing fiscal and include a separate annexure of its expenditure.

Sources said concerns that the Railways’ liabilities and borrowings would affect the Centre’s accounts are unfounded as these get reflected in the balance sheets. “Whatever money the Railways borrows, it is already a part of the government borrowing,” said the official.

Officials from the ministries of Finance and Railways told BusinessLine that the Cabinet is expected to consider the proposal next week.

Simultaneously, the Finance Ministry will also seek Cabinet nod for advancing by four weeks the timeline of the Budget, which has usually been presented towards end February.

“Our goal is to advance the presentation of the Budget to late January or early February,” said a senior official familiar with the development. He added that the practice of Vote-on-Account will also be done away with and the entire Budgetary process completed by March. This, he said, would enable Ministries start spending from April 1, Day 1 of the new fiscal.

The move will help the Centre spend evenly through the financial year. Currently, until the Budget is passed by Parliament, which is usually around May end, Ministries are unable to spend more than a sixth of their annual allocation. As the monsoon sets in soon after, major capital spending gets pushed back to the second half of the fiscal, and often happens in a rush.



14| P a g e

The Finance Ministry is understood to be already putting systems in place to speed up the Budget preparation process.

Multiple sources told Business Line that the elections to various State Assemblies next year will not prove a deterrent to the budgetary exercise, so long as the Centre does not announce any projects specific to the States going to polls.


BANKS IN A BIND OVER RBI NORM

The Reserve Bank of India’s (RBI) new norms asking banks to cap their collective exposure to a single large corporate borrower at Rs. 10,000 crore, by April 1, 2019, has left the lenders between a rock and a hard place.Banks fear that stressed corporate borrowers may not be able to raise resources from the bond market — as the RBI has suggested — to repay their loans.

The lenders believe that the ratings on bonds issued by such corporates, especially in the steel, infrastructure, textile and construction sectors, may not inspire confidence among investors.

As such, the banking system may not be in a position to follow the central bank’s guidelines.

Hence, the bond market route could prove to be a tall order for corporates facing a downturn and looking to raise funds.

Take banks that have a loan exposure of Rs. 36,000 crore to Essar Steel, for instance. Bringing this debt pile down to Rs. 10,000 crore by FY20 may prove a Herculean task. Lenders now want promoters to bring in fresh capital into the company by inducting new investors.

The RBI last month prescribed a timeline for the banking system to cap its aggregate fund-based credit limits (sanctioned or outstanding) to large corporates. The collective exposure limits have been fixed as follows: Rs. 25,000 crore in FY18, Rs. 15,000 crore in FY19 and Rs. 10,000 crore from April 1, 2019.

If the banks do not meet the cap on aggregate exposure, they will have to bear the brunt of additional provisioning and higher risk weights on their excess exposure to a corporate. This could impact their bottom lines.

“As far as fresh lending is concerned, we see no problem. The reason is that banks can ensure that when they take fresh exposure, they will be within the limit that the RBI has prescribed,” said a senior official at a public sector bank.

“But how do banks deal with a situation where they have more exposure to companies that are stressed right now? Will they be able to find alternative means of finance? Will they be able to raise part of their requirement from the capital market,” he wondered.

Only if such large corporates are able to raise resources from the bond market and repay loans can the banks comply with the exposure caps. But if a corporate has borrowed Rs. 50,000 crore from banks, it is unlikely that it will be able to drastically reduce its borrowing to Rs. 10,000 crore in three years’ time by raising funds from alternative sources.




15| P a g e

INDIA'S SALARY ROSE JUST 0.2% IN 8 YEARS; GDP GREW 63.8%

India has seen a salary growth of just 0.2 per cent since the great recession eight years back, while China recorded the largest real salary growth – 10.6 per cent – during the period under review, says a report.

According to a new analysis by the Hay Group division of Korn Ferry, India's salary growth stood at 0.2 per cent in real terms, with a GDP gain of 63.8 per cent over the same period.

China, Indonesia and Mexico had the largest real salary growth at 10.6 per cent, 9.3 per cent and 8.9 per cent, respectively. Meanwhile, some other emerging markets including Turkey, Argentina, Russia and Brazil had the worst real salary growth at (-) 34.4 per cent, (-) 18.6 per cent, (-) 17.1 per cent and (-) 15.3 per cent, respectively.

"Most emerging G20 markets+ stood at either one end of the scale or the other either amongst the highest for wage growth, or amongst the lowest. However, India stood right in the middle, with all the mature markets," the report said. The report further noted that Indian wage growth is the most unequal.

"Of the countries we looked at, Indian wage growth was by far the most unequal - people at the bottom are 30 per cent worse off in real terms since the start of the recession; whilst people at the top are 30 per cent better off," Benjamin Frost, Korn Ferry Hay Group Global Product Manager - Pay said. Strong wage growth for senior jobs is mostly because of skill shortages for key professional and managerial roles; and the increasing connection to a more globalised pay market at the senior levels - a market where India still pays less than most countries, but is catching up fast, Frost said.

On the poorer wage growth at the bottom, the report noted that it is more because of an oversupply of people.

"India has made less progress than some other countries in bringing high value jobs to the country. This has led to poor job growth, therefore an oversupply of un/semi-skilled people, and poor wage growth," Frost said.

Globally, the United States suffered one of the worst salary recoveries among developed nations. Adjusted for inflation, salaries in the United States decreased 3.1 per cent on average since September 2008 - despite a Gross Domestic Product (GDP) growth of 10.2 per cent. Canada's salary recovery is the best among developed nations, with a 7.2 per cent salary growth on average, with a GDP gain of 11.2 per cent. Other developed nations experienced flat to modest salary growth, with Australia at 5.9 per cent, France at 5.2 per cent, Germany at 5 per cent and Italy at 2.4 per cent.

"While overall, global economists point to this recovery as one of the worst in history, there are political, economic and social reasons for the disparate salary fluctuations in different countries," Frost said.

Source – The Hindu Business Line, 16th September 2016



16| P a g e

SINGUR REDUX — AND WHY NOT?

Chief Minister Mamata Banerjee once again scored a major political point over the CPM when she began distributing land documents and compensation to Singur farmers on September 14, calling the day ‘Singur Dibas’, to be observed each year. She has said that 997 acres of land will be returned to over 9,000 farmers and brought under the plough, in compliance with the August 31 Supreme Court ruling. A memorial will be built in memory of those ‘martyred’ in the 2006 resistance against handing over land for the Tatas’ car plant.

It is tempting to dismiss ‘Singur Dibas’ as a Trinamool Congress gimmick.

But it has the potential to become a rallying point for those sceptical of the current model of industrialisation. It could reopen old, pertinent questions, embarrassing not just the CPI(M), but also the Modi government, which sought to dilute the Land Acquisition (Resettlement and Rehabilitation) Act — a consequence of the Singur-Nandigram agitations — soon after it assumed office. The CPI(M) has still not clarified why its government forcibly took over fertile farmland for a car project by invoking “public purpose”. The Supreme Court has now struck down the acquisition, basically for not obtaining informed consent. While the LARR law focuses on generous compensation, the crucial question of what constitutes “public purpose” remains unaddressed — both in law and the political imagination.

As EF Schumacher says in Small is Beautiful, economics has not learnt how to value natural resources. Therefore, the benefits of setting up an industrial project can be overestimated, unless it is, say, a clearcut case of setting up a railways factory on barren land. Making acquisition easier can have adverse effects. Six lakh hectares of farmland have been lost in a decade in Karnataka alone. Such industrialisation can have adverse socio-economic and ecological consequences.


JAITLEY ORDERS PROBE INTO ‘GILDED’ JAN DHAN ACCOUNTS

The Finance Ministry has directed four banks to investigate charges that bank officials are artificially deflating the number of zero-balance accounts under the Pradhan Mantri Jan Dhan Yojana as a window-dressing measure. “Four banks are investigating from their branches whether account-holders have put in money or business correspondents have done it,” Finance Minister Arun Jaitley told reporters after the first-quarter performance review of public sector banks here on Friday.

He was responding to a question on media reports that officials in some branches of Punjab and Sind Bank, Punjab National Bank, Bank of Baroda and Bank of India have themselves deposited a token amount of Rs. 1 in Jan Dhan accounts to reduce the number of zero-balance accounts.

Jaitley noted that there are 24 crore Jan Dhan accounts with total deposits of Rs. 42,000 crore.

“You don’t get Rs. 42,000 crore by just collecting Rs. 1 deposits. Of course, there are some accounts with zero balances. Banks are verifying details of those accounts where such small deposits of Rs. 1 were made,” he said.



17| P a g e

After the controversy erupted, the Ministry emphasised that the absence of balances in Jan Dhan accounts does not diminish the benefits associated with them. There is no requirement of a minimum balance in such accounts, which the government sees as vehicles to effect direct benefit transfers to economically weaker sections.

Jaitley said he hoped that the RBI and the to-be-formed Monetary Policy Committee will “collectively” factor in the recent inflation trends and take a pragmatic decision at the next monetary policy review meeting in October.

Banks continue to face challenges in respect of high non-performing assets, Jaitley acknowledged. Friday’s meeting had discussed the matter in detail, he said, and added that banks had been empowered to take effective steps to tackle the NPA situation. The silver lining, he added, was that the steel and infrastructure sectors, which accounted for much of the NPAs, would soon see a revival of their fortunes.


ALL KYC DATA MUST BE COMPLIANT WITH NEW FORMAT BY MARCH NEXT: RBI

The RBI has said that all data related to KYC (know your customer) be made compliant as per CERSAI’s Common KYC (CKYC) format by March 31, 2017, according to sources. A meeting was held at North Block in the Capital to assess the implementation of CKYC, sources said.

The government in November 2015 had mandated CERSAI (Central Registry of Securitisation Asset Reconstruction and Security Interest of India) to be the sole repository of KYC information related to financial sector regulators. Uploading of KYC data in CKYC format for accounts opened after October 15, 2016, will be a requirement. Existing KYC registration agencies regulated by SEBI have to provide a new structure in their existing modules and make it CKYC compliant by December 31. Then the data has to be exported to CKYC.


AS BANK DEPOSIT RATES FALL, SAVERS ARE DIVERSIFYING THEIR INVESTMENTS

Lower returns on bank deposits in the last two-three years has nudged yield-hungry savers to diversify into other financial assets, including shares, debentures and deposits with non-banking companies.

According to RBI data, the percentage of bank deposits in overall savings/investments made by the household sector in financial assets declined from 54 per cent to 41 per cent between financial years 2013-14 and 2015-16. While median deposit rates inched up from 7.42 per cent in March 2013 to 7.78 per cent in September 2013, they started trending lower gradually thereafter.

Deposit rate cuts gathered momentum from June 2014 onwards, declining 1.11 percentage points from 7.74 per cent to 6.63 per cent in June 2016. In FY2015-16, investments in financial assets — including bank deposits, non-banking deposits, life insurance funds, provident and pension funds, currency, shares and debentures — in the economy grew by Rs. 14,89,853 crore. Financial assets in FY15 and FY14 were up by Rs. 12,72,240 crore and Rs. 11,99,278 crore, respectively.



18| P a g e In its annual report for 2015-16, the RBI said the increase in gross financial assets was driven primarily by a turnaround in small savings and increases in investment in equities and mutual funds, tax-free bonds by public sector units and currency holdings even as the growth in bank deposits held by households moderated.

“Time deposits were muted by the moderation in deposit rates…Large issuances of long-term tax-free bonds by various public sector units contributed to the deceleration in deposits, besides the higher returns on small savings which are not subject to tax deduction at source,” the RBI said.

For example, in December 2013, NTPC had issued 10-year tax-free bonds at a coupon rate of 8.66 per cent when the median term deposit rate was 7.75 per cent. However, bankers are not unduly worried by the slack deposit growth due to savers’ preference for high-yielding investments.

“If the credit appetite in the economy is muted, we are better off modulating the deposit growth through deposit rate cuts. If credit growth picks up, we have the flexibility to up the deposit rates to attract resources,” said a senior official at a public sector bank.

The household sector’s investment in shares and debentures was up from 3.54 per cent of overall financial assets in FY14 to 6.15 per cent in FY16. During the reporting period, the equity benchmark BSE Sensex rose from 18,865 points to 25,342 points. With non-banking company deposits fetching almost 0.75 to one percentage point more interest, savers, faced with bank deposit rate cuts, were attracted to these deposits. On currency with the household sector increasing from 8 per cent of overall financial assets in FY14 to 13 per cent in FY16, the RBI observed that anecdotal evidence suggests several forces at work.

According to the central bank, the increase in currency is due to simultaneous conduct of elections in various States; a possible response to increases in the rate of service tax; and the jewellers’ strike protesting excise duty increases in the Union Budget, which effectively impeded the return flow of currency. Rising disposable income coupled with increased risk-taking ability in order to earn higher returns is probably prompting investors to diversify their investments, summed up a banker.


NOTHING WRONG IN RECRUITING OUTSIDERS AS PUBLIC SECTOR BANK CHIEFS: APEX COURT

Press Trust of IndiaThe Supreme Court on Friday dismissed a PIL (public interest litigation) challenging the Centre’s policy of allowing private bank officials to be appointed Managing Directors or CEOs of public sector banks. A Bench comprising Chief Justice TS Thakur and Justices AM Khanwilkar and DY Chandrachud rejected the petition filed by the Bank Officers’ Confederation challenging the policy pertaining to such appointments and held that there was nothing wrong with it. The court had on May 5 sought responses from the government and Reserve Bank of India on the PIL, which had also challenged reduction of cut-off age for being considered for the top post from 58 years to 55.



19| P a g e The plea had contended that the cut-off age for eligibility was “unjustly, irrationally and unilaterally” reduced against the advice and views of the Appointments Committee of Cabinet.

The PIL, filed by former president of All-India Bank Officers Confederation KD Kheda, had challenged the February 26 advertisement for appointment of CEOs and MDs of Bank of India, Bank of Baroda, Canara Bank, Punjab National Bank and IDBI Bank. Quoting provisions of the Banking Companies Acquisition and Transfer of Undertakings Act 1980, the plea had contended that only whole-time directors of public sector banks, whose names are cleared by the Central Vigilance Commission, can be appointed to head public sector banks.

It had alleged that eligibility criteria for the posts of CEO and MD of the five banks have been set “with a sole objective of making all existing executives directors of public sector banks ineligible.” “Executive Directors of PSBs, who were the only persons eligible under the old policy, will automatically become ineligible solely on account of the cut-off age of 55 years with three years board experience, which is purposely and qualifiedly reduced in the case of appointment of MD and CMD only for these five large PSBs,” the petition said.


CENTRE SACKS BANK OF MAHARASHTRA CMD

In an unprecedented move, the Centre on Monday removed Sushil Muhnot from the post of Chairman and Managing Director of Bank of Maharashtra with immediate effect.

This action comes four days before Muhnot was to superannuate.The move has been taken under legal powers vested with the Centre under the Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1970/1980, official sources said.

While there is no official word on the reasons for such an unprecedented action, sources said that political pressure may have prompted the Finance Ministry to remove Muhnot. It is not clear whether the RBI was consulted for such an action, they added. Muhnot is understood to have come under the lens of the Finance Ministry for misuse of powers, although several people in banking circles feel that the alleged violations were mostly over frivolous issues. In the past, the Centre had initially suspended persons holding Chairman and Managing Director posts for any misconduct (including diversion of funds/ appropriation etc) if the CBI had registered a case against them.

Meanwhile, Ravindra Marathe, who was Executive Director at Bank of India, on Monday assumed charge as MD and CEO of Bank of Maharashtra. He was to assume charge on October 1. Marathe takes charge of Bank of Maharashtra at a challenging time. The public sector bank reported a net loss of Rs. 397 crore in the April-June quarter. In the first quarter of this fiscal, the bank saw a 93 per cent rise in non-performing assets.




20| P a g e

RBI DELIVERS THE CUT THAT CHEERS Noting that the easing of inflation pressures had opened up the space for policy action, the Reserve Bank of India on Tuesday cut the repo rate by 25 basis points, or one quarter of 1 per cent, raising hopes of a revival of bank credit. All six members of the newly appointed Monetary Policy Committee (MPC) voted in favour of the rate cut from 6.5 per cent to 6.25 per cent, which comes at the start of the October-March busy season. The policy rate, or the rate at which banks borrow from the RBI, had been on hold for nearly six months. The previous cut came in early April, from 6.75 per cent to 6.50 per cent. The panel, headed by RBI Governor Urjit Patel, cited the downward shift in the momentum of food inflation and the government’s measures to cool food inflation pressures as contributory factors. The RBI’s fourth bi-monthly monetary policy review was Patel’s first as Governor. The Centre had constituted the MPC late last month with the mandate to maintain price stability, while keeping the growth objective in mind. The MPC’s maiden meeting was spread over two days (October 3 and 4). The MPC felt that the accommodative stance of monetary policy and comfortable liquidity conditions should support a revival of credit to the productive sectors. The repo rate cut and the downward adjustment in small savings rates are expected to spur banks to cut deposit and lending rates. ICICI Bank responded first with a rate cut of 5 basis points. The MPC resolution said the government’s efforts should help moderate the momentum of food inflation. “The easy liquidity conditions engendered by the Reserve Bank’s operations should also enable the smooth transmission of the policy action through various market segments. Furthermore, banks should find added impetus for better transmission by the recent downward adjustment in small savings rates,” the statement said. Patel observed that the government had introduced structural policies and reforms to ease supply-side constraints. “Proactive food management has played a crucial role in the past two years and will continue to do so,” he noted. “The improvement in pulses supply has been the main contributor (to falling inflation). And there has been a sharp improvement in the competitiveness ranking.”



21| P a g e The MPC took note of potential cost-push pressures that may emerge, including the 7th Pay Commission award, the increase in minimum wages, and the higher minimum support prices. It would need vigilance to prevent a generalised cost spiral from taking root, it added.

SBI Chairman Arundhati Bhattacharya said, “The committee decision was on expected lines. With benign inflation trajectory going forward, the RBI’s policy stance is expected to remain accommodative. Banks will continue to transmit rates based on evolving liquidity scenario.”

Source – The Hindu Business Line, 5th October 2016.

‘DEALING WITH STRESSED ASSETS WILL REQUIRE SKILL AND CREATIVITY’

The RBI has decided to treat ‘that’ portion of debt which is found to be sustainable, as a standard asset (subject to conditions), while dealing with loans. It plans to issue detailed guidelines on the issue by end-October.

The move is aimed at providing an avenue for reworking the financial structure of entities facing genuine difficulties and requiring coordinated deep financial restructuring. The Scheme for Sustainable Structuring of Stressed Assets (also called S4A) provides flexibility in restructuring, which may involve material write-down of debt and/or making large provisions under a credible framework.

RBI Governor Urjit Patel said: “The NPA situation is an important issue for the RBI in India. We will deal with the situation with firmness but also with pragmatism so that the economy does not feel any lack of credit to support growth in the economy. But we must remember that this situation has not occurred overnight and therefore will require skill and thoughtful endeavour to resolve.

“There are four stages — the identification, recording and reporting of this subject has been done satisfactorily. But resolution, which is the fourth leg, is something that we need to work more (on). In fact, back in 2007 and 2008, the banking sector lent their balance sheets to support the investments in infrastructure. Just five sectors contribute 61 per cent of the stressed assets of the banking sector — infra, steel, textiles, power and telecom.

“The sectors are each individually important and dealing with stressed assets will require skill and creativity. We will move at various levels to address the situation and we have indeed done so. We are working with the banks and the government on the subject. As you know, we have been at the forefront of improving creditor rights in India — the Bankruptcy Bill is an example of this, but like all legislations, (this too) will take some time to settle. The RBI and the government will work together to deal with some of the issues that emerge.” The RBI said that banks which have taken up cases for resolution under the S4A have represented that the asset classification norms under the S4A may be reviewed to make the scheme more effective.

Source – The Hindu Business Line, 5th October 2016.



22| P a g e

AIRRBOF NEWS LETTER Registered with RNI, New Delhi,

Regn. No. 4L/RV/TO/93

EDITORIAL BOARD

Chairman – Shri R.G. Makhija Editor in Chief – Shri S.K. Bhattacharjee Associate Editor – Shri C.S. Pal Members – Shri C. Jayakumar

Shri Rajesh Kori Shri S.K. Pal Shri K.M. Shukla

Edited & Published by Shri S.K. Bhattacharjee on behalf of AIRRBOF



Documents

NEWS LETTER OCTOBER 2016 demands related to DA Neutralisation for pre 2002 retirees, Revision in family pension & Pension updation and one more option of pension to resignees who were