Citizens' Issues
Dhanlaxmi Bank Officers to resort to agitations again

Alleging harassment and seeking protection from RBI for whistle blowers, the officers from Dhanlaxmi Bank, supported by AIBOC decided to again resort to agitations against the unjustified termination of PV Mohanan, the general secretary of DBOO

 

After observing a strike for almost 33 days, the officers in Dhanlaxmi Bank Ltd said they will again resort to agitations against the unjustifiable termination of PV Mohanan, the General Secretary of Dhanlaxmi Bank Officers' Organisation (DBOO).
 
Service of Mohanan, who was working as Senior Manager in the Bank's Recovery Department at Thrissur, was terminated on 11 June 2015 citing 'loss of confidence'.
 
The National Executive Committee of All India Bank Officers Confederation (AIBOC), after taking a stock of the situation in a recent meeting, has decided to again commence agitation to reinstate Mohanan and restore trade union's rights in Dhanlaxmi Bank. The meeting was attended by DT Franco Rajendra Dev, senior vice president of AIBOC, V Chidambarakumar, president of All India Private Sector Officers Federation, Paul Mundadan, secretary of All India Private Sector Officers Federation and Abraham Shaji John, Secretary for Kerala of AIBOC.
 
"By dismissing the General Secretary, the Management wants to silence the whistle blowers in the Bank and also find an alibi for their mismanagement, as the DBOO is on an indefinite strike," the DBOO had said in a statement.
 
Our emails sent to the top management of Dhanlaxmi Bank remained unanswered till writing this article. We will incorporate their answers as and when we receive it.
 
According to the Officers' Organisation, it is on the path of agitation for the last 10 months as the Bank Management had chosen a victimization route against the association, for pursuing genuine trade union activities. "The difference of opinion started in early 2014 when DBOO alerted the Bank's management on a major fraud (through the Bank's whistle blower policy) that was being perpetrated through one of the Bank's Mumbai Branches," the Organisation said.
 
 
The scam, worth about Rs1,500 crore, involving several other banks is now being probed by the Economic Offence Wing (EOW) of Mumbai Police. "There are indications about the involvement of higher level executives of Dhanlaxmi Bank also in the fraud, but as of now one of our junior level officer, a member of DBOO, who just obeyed the instructions from the top management, has been arrested and is in jail for the last two months. One Director of the Bank tendered his resignation in view of the involvement in the fraud," DBOO had said.
 
In two letters sent to the Reserve Bank of India (RBI), the union had alleged that despite having clear evidence of the active involvement of top officials of the Bank in the high value fraud in Mumbai, perpetrated by Showman group, no action has been initiated against either the Managing Director or the Chief General Manager of the Bank. It said, "This is a mystery to all. Only one Director Sreekanth Reddy resigned. A Scale I officer, who passed the entry in the computer system has been booked and is in jail since past two months. We fear that with the passage of time, evidenced will be destroyed and facts will be distorted. This is our worry and the real culprits will go scot-free."
 
Moneylife was the first one to report the AIBOC allegations that the bank has manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call money borrowing. It has also accused the bank for ignoring social banking and financial inclusion. (Read: The stink coming from Dhanlaxmi Bank: AIBOC raises serious allegations)
 
According to DBOO the trend continues. For FY2014-15, Dhanlaxmi Bank reported a net loss of Rs241 crore compared with Rs251.9 crore same period a year ago. "This is in contrast to the first three quarters of profit that the Bank has been showing since 1 April 2014. The sudden plunging into a heavy loss itself is an indication of the accounting adjustments that the Bank has been practicing for long. The very purpose of publishing quarterly results is to ensure transparency of the Bank's working to the public at large. But by projecting a rosy picture for three quarters and then showing negative results only at the end of the year, the Bank is once again proving the accounting adjustments it has been doing to cheat depositors, employees and other stake holders," the Organisation said in its letter to the RBI.
 
Requesting intervention by the central bank, the DBOO said, "As the scheme of protected disclosure or whistle blowers scheme has the sanctity of Regulator's directive, we strongly feel that it is also the duty of the RBI to give protection to the whistle blowers. This, however, is not happening in Dhanlaxmi Bank. The officers are always at the receiving end whenever a whistle blowing is done. So we appeal to the RBI to kindly intervene and advise the management suitably".
 
Last year in August, the EOW unearthed a largescale banking fraud worth about Rs1,000 crore related with fixed deposits (FDs) in several banks. According to reports, banks involved in this large scale FD fraud include, Dena Bank, UCO Bank, Syndicate Bank, Bank of Baroda, Vijaya Bank, Dhanlaxmi Bank, Bank of India and Indian Overseas Bank among others. Among the institutions who were victims of the fraud are the Mumbai Metropolitan Regional Development Authority (MMRDA) and South Indian Education Society (SIES) Trust.

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COMMENTS

TIHARwale

1 year ago

what is preventing AIBOC in making public the link related to dismissal in other Banks so that RBI is forced to protect the whistle blower and at the same time corrupt are dismissed

Will mergers and acquisitions improve Indian Banking?
Do we need global size banks or Indian banks that meet the growing needs of economy? Is M&A an answer for improving health of our financial system or will it make systemically important banks a greater strain for the regulator than now?
 
Banking Sector Reforms Committee in 1998 suggested consolidation of banks –the State Bank of India (SBI) and its Associates into a big state-owned bank and five or six such big banks through consolidation of other public sector banks (PSBs), mergers of private banks and even financial institutions (FIs) with non-banking financial companies (NBFCs). There were noises of consolidation in the United Progressive Alliance (UPA)-1 government too. And now, the Working Group on Mergers and Acquisitions set up by the Ministry of Finance again calls for a similar action. The major issues relating to capital, assets and human resources need to be looked at from the points of view of growth, financial stability and global experiences. Recently, Arundhati Bhattacharya, Chairman of SBI, strongly fielded the arguments for large scale consolidation. Is the Indian financial system ripe for the call?
 
Since 1969 till date, there has been as many as 34 mergers and amalgamations in banking and finance sector. There were at least 25 cases where private sector banks merged with the PSBs and some of them were induced mergers while several others were voluntary driven mostly by the weak financials of the banks that merged. Post-1999, however, even healthy banks were merged driven by the business and commercial considerations. Post reforms private sector has seen giant size banks taking shape in the private sector. 
 
Post recession global financial architecture required that the Reserve Bank of India (RBI) identify the systemically important banks – the SBI and ICICI Bank. However, emerging developments and the changes that occurred during the last two decades with digital banking making deep inroads, demand a different alchemy of structural transformation in Indian banking.
 
Capital is the Achilles heel. GoI would be hard put to provide the BASEL III capital requirement through measly budgetary releases. It would do well to restrict its shareholding to just around 51% and this would require strong argument on enhancing the efficiency of the PSBs, more autonomy and transparency in its ownership versus controlling roles.
 
The diversity of Indian Banking system – PSBs, private sector – old and new, regional rural banks (RRBs), local area banks (LABs), rural cooperative banks, urban cooperative banks (UCBs), Small Industries Development Bank of India (SIDBI), National Bank for Agriculture and Rural Development (NABARD) and Micro Units Development and Refinance Agency (MUDRA), the proposed Payment Banks, the small savings banks is a challenge for reforms. We have the outliers – the microfinance institutions (MFIs) and the NBFCs.  
 
Financial inclusion demands the proximity of the banking system to the vast semi and illiterate customers in rural areas. Several experiments like the business correspondents, business facilitators, primary agricultural cooperative societies, regional rural banks, local area banks have not made a big dent in the most deserving inclusive sphere. Even Jan Dhan has thrown up big numbers and not big services in this direction. The small private banks are still showing up their validated presence closer to many a customer that the big banks like the ICICI or SBI have distanced. 
 
The Financial Stability Report (FSR) of the RBI for June 2015 holds that the weakness in asset quality and profitability remains high compared to the period up to September 2014. “Stress tests on sectoral credit have revealed that the shocks to infrastructure sector, mainly the power and transport sub-sectors, would significantly impact the system,” it says. This stressed portfolio is handled by the large number of big and medium sized PSBs, now sought to be consolidated by the SBI chief.
 
Need exists but the move requires lot of cleansing the operating environment. Most Banks in India, save exceptions, still view risk management as a scrupulous compliance function rather than as a business tool. Boards of the banks do not devote enough attention on measuring the risks of new products introduced by the banks. 
 
Human resources pose much larger issues. In several PSBs, due to stoppage of recruitment for nearly 20 years and with least willingness for lateral infusion of talent at middle and higher levels, there are going to be several vacant chairs in senior and top management positions. Several banks continue to outsource the retired executives for recovery of NPAs, marketing new products and services and clientele advisory services. 
 
If the banks that would like to merge have the financial muscle, the human resources (HR) would not be on even keel. The distant experience of either new Bank of India merger with the Punjab National Bank (PNB) or the forced merger of Global Trust Bank Ltd with the Oriental Bank of Commerce (OBC) posed HR issues that took decade and odd to resolve. For instance, even the Associate banks of SBI like the State Bank of Hyderabad (SBH) and State Bank of Mysore (SBM), and State Bank of Travancore (SBT) would prefer to be outside the hegemony of the SBI. The staff associations in these Associate banks have made it clear over and over again that they would not agree for any merger with the SBI. As mentioned in the Hindu Business Line editorial of 25 April 2015, mergers in Indian banking have been bail out exercise for weak banks or in some cases failed banks. 
 
The government could start the process of amalgamation of State Bank with the remaining subsidiaries to increase the size of the balance sheet by holding a constructive dialogue with the unions and officers’ associations. 
 
However, the eternal question remains: do we need global size banks or Indian banks that meet the growing needs of the Indian economy? Can they provide depositors their due place? Will mergers be an answer for improving the health of the financial system or will give rise to more systemically important banks proving greater strain for the regulator than now? These questions beg answers from the RBI and GoI more than others.
 
(Dr Yerram Raju Behara is a former senior executive of SBI and an economist and risk management specialist. The views expressed in the article are his personal.)

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COMMENTS

Aseem

8 months ago

Useful read sir. My sense is while consolidation could alleaviate the capital challenge, but unless other measures are taken simultaneously (improving corporate governance for PSU entities, creating a better employee selection and performance-reward systems) and setting stringent operating efficiency and profitability targets), we would be only resolving the symptom and not the root cause.

Aseem

8 months ago

Useful read sir. My sense is while consolidation could alleaviate the capital challenge, but unless other measures are taken simultaneously (improving corporate governance for PSU entities, creating a better employee selection and performance-reward systems) and setting stringent operating efficiency and profitability targets), we would be only resolving the symptom and not the root cause.

Suketu Shah

1 year ago

NOthing wl help unless you have the right leader at the top in the finance Ministry--and fast.

Parimal Shah

1 year ago

Let us not have 'too big to fail' kind of institutions - avoid the mistakes made by uncle Sam and others that followed him.

Sehwag announces retirement from all forms, IPL
 Putting an end to all speculations about him, star Indian cricketer Virender Sehwag on Tuesday announced his retirement from all forms of the game with immediate effect.
 
"Thanks everyone for all your wishes and love. I hereby retire from all forms of international cricket and from the Indian Premier League (IPL)," Sehwag announced on Twitter.
 
One of India's greatest opening batsmen, Sehwag on Monday had clearly indicated that he will "soon" retire. That "soon" came just a day later when the dashing opening batsman turned 37.
 
"To paraphrase Mark Twain, the report of my retirement yesterday was exaggerated. However, I have always done what I felt was right and not what conformists thought to be right," the right-handed batsman said in a statement.
 
"God has been kind and I have done what I wanted to do, on the field and in my life, and I had decided sometime back that I will retire on my 37th birthday. So today, as I spend my day with my family, I hereby announce my retirement from all forms of international cricket and from IPL."
 
The Delhi-born will, however, play in the Masters Champions League (MCL), which he launched in Dubai on Monday with other stars like Brian Lara, Graeme Smith, Michael Vaughan -- a tournament to be held early next year for retired cricketers.
 
"Cricket has been my life and continues to be so. Playing for India was a memorable journey and I tried to make it more memorable for the Indian teammates and the Indian cricket fans. I believe I was reasonably successful in doing so," he said.
 
The 'Nawab of Najafgarh' last represented India in the Test series against Australia in March 2013 and his spot was subsequently filled by the likes of Shikhar Dhawan and Murali Vijay following a string of low scores.
 
"I wish to thank my teammates over the years, some of the greatest players of the game. I would like to thank all my captains, who believed me and backed me to the hilt. I also thank our greatest partner, the Indian cricket fans, for all the love and support and memories. I have also played against top players in the world and it was an absolute pleasure and honour to do so," said the right-handed batsman.
 
A few says back, Sehwag switched his allegiance from Delhi to Haryana in the Ranji Trophy. The swashbuckling batsman represented Delhi for 18 seasons since 1997 but after several poor seasons, that saw him getting dropped from the national team, he decided to make the switch.
 
"I would like to thank Board of Control for Cricket in India (BCCI) for their support over the years. I would like to thank Indian Premier League (IPL) side Delhi Daredevils and Kings XI Punjab, I represented," the Delhi-born said.
 
In a career spanning over 15 years in international cricket, Sehwag featured in 104 Tests and scored 8,586 runs at a staggering average of 49.34. In 251 One-Day Internationals (ODI), he amassed 8,273 runs at an average of 35.05. He also scored 38 international hundreds.
 
"I miss my father today, he was there when the journey started, and I wish he was here today. I would like to thank my coach A.N. Sharma sir who was the only coach who groomed me to be the player I became today," added Sehwag.
 
It was in Tests that Sehwag went on to establish himself as one of the very best in the game. He is still the only Indian willower to have a triple century in his name, having done so twice against Pakistan (309 in Multan) and South Africa (319 in Chennai).
 
This made him the only batsman along with Don Bradman, Chris Gayle and Brian Lara to have scored a triple century twice in Test matches.
 
His batting was also instrumental in helping India win the 2011 World Cup at home.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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