Slightly trending up

Expect no significant move from the bourses on either side

The market was volatile today, after it factored in the eurozone aid program. The Sensex ended at 17,195, higher by 54 points (0.3%) while the Nifty settled at 5,156, up 20 points (0.4%). The bourses started with a gain, taking cues from Asian markets. However, they soon pared their gains and touched their intraday lows at the mid-morning session. There was a sharp recovery in afternoon trade, supported by realty and banking stocks.

Asian stocks were volatile after a firm start on concerns about the global economy's outlook despite the massive rescue package for the European debt crisis. Key benchmark indices in Japan, Taiwan and South Korea fell by 0.08% to 0.43%. On the other hand, indices in China, Indonesia, Hong Kong and Singapore rose by 0.31% to 1.13%.

US stocks were down on Tuesday on worries that the $1-trillion bailout for Europe won't solve the region's deep-seated problems. The Dow was down 37 points, (0.34%) to 10,748. The S&P 500 was down 4 points (0.34%) to 1,156 and the Nasdaq gained 0.64 points (0.03%) to 2,375.

There are concerns over the trillion dollar package to pull the eurozone out of the debt crisis. The emergency package announced on Monday offers loans and loan guarantees, if necessary, to help countries to service their debt. The European Central Bank’s (ECB) promise to buy government bonds will help support investor demand. However, the package is not directed to stimulate growth in the weak European economy.

Closer home, gold was trading at near record high levels on Wednesday afternoon tracking overseas gains. Traders were unwilling to buy at this high level. International gold was trading at $1,228.55/1,299.55 an ounce as against the previous close of $1,232.05/1,233.05, after hitting an all-time high of $1,233.65 in the last session.

Industrial output grew slower than expected at 13.5% in March from the year-ago period. The slow growth is because of the partial withdrawal of stimulus measures and increase in interest rates. The Planning Commission, however, believes that the slowdown in March industrial output will not affect the gross domestic product (GDP) of FY 2009-10.  

The Reserve Bank of India (RBI) said that the capital account will be opened up gradually and there is no plan of imposing a Tobin Tax to curb currency speculation. The Tobin Tax is a transaction tax on currency conversions intended to curb volatility and speculation. The capital account convertibility is integrally attached with the broader goal of economic growth. However, the RBI also expressed its preference for long-term equity flows over short-term debt flows.

The agriculture minister has said that the government must protect its farmers from cheap imports of wheat and sugar. India abolished a 60% import tax on the sweetener in April 2009. The country, the second-biggest producer of wheat, allowed tax-free imports of the grain in early 2007.

Finance minister Pranab Mukherjee said that although there is concern over high inflation, it seems to be easing now. Wholesale price inflation touched a 17-month high of 9.9% in March. 

Foreign Institutional Investors (FIIs) were net buyers yesterday of Rs20 crore. Domestic Institutional Investors (DIIs) also bought stocks worth Rs22 crore. The rupee was up, taking a cue from the strong equity market. 

L&T (up 1.2%) has received a project from the Qatari government for waste water treatment. Cadila Healthcare (up 2.5%) has entered into a licensing and supply agreement with Abbott Laboratories that will help Abbott quicken the pace of its growth in emerging markets. As per the agreement, Abbott will gain the rights to at least 24 Zydus products in 15 emerging markets where Abbott has a strong and growing presence. The agreement also has an option for additional 40 products to be included over the term of the collaboration.
 

User

Prithvi’s recent acquisition despite multiple scandals and losses raises a stink

Despite being under regulatory watch for apparent financial subterfuge, Prithvi Information Solutions appears to be unfazed. Its recent overseas acquisition should raise some eyebrows

IT solutions and engineering services company Prithvi Information Solutions (Prithvi) is shrouded in multiple cases of financial manoeuvrings. Over the past one year alone, the Hyderabad-based company has attracted one controversy after another, without drawing flak from the regulator. Now, it has announced a $3-million acquisition of US-based business intelligence firm, Percentix.
 
How is it that a company conspicuously involved in questionable practices continues to operate unfazed and unbridled, to the extent of making overseas acquisitions? Consider the facts: In the year 2009, three international audit firms walked away without signing the balance sheet. Ernst & Young resigned after signing a heavily qualified balance sheet in March 2009. It was followed by PriceWaterhouseCoopers (PwC), which resigned in panic in the wake of the Satyam scandal.

The firm that replaced PwC as an auditor made as fast an exit as PwC and resigned in less than four months without signing the accounts. In the subsequent Annual General Meeting (AGM) of Prithvi, the company appointed another firm, VK Asthana & Co, which did not show any hesitation and signed the accounts without raising any questions. The firm completed its audit within just 23 days and issued the report on the financial statements. Very convenient indeed!

Less than a month after the AGM on 30th January, there was a report in Tehelka magazine dated 27 February 2010 about another scandal where Prithvi was issued a summons by a city criminal court. The Rs200 crore alleged fraud involves unpaid dues to a leading Japanese corporation. Tehelka says that the company diverted money to be used for buying telecom equipment for State-owned Bharat Sanchar Nigam Ltd (BSNL) to itself, by shadily diverting payment terms and having the money credited to its own accounts, without informing Sojitz Corp of Japan.

A couple of days earlier, the company had planted a report in a couple of obscure journals that it was set to bag an order worth Rs200 crore—the exact amount diverted in the Sojitz case. It is also facing action from the Directorate of Revenue Intelligence (DRI), although the accuracy of these charges is not known.

Add to this, Deutsche Bank had filed a first information report (FIR) in June 2009 accusing Prithvi's promoters of a fraud of Rs40 crore, according to a CNBC report. Although Deutsche Bank has remained tight-lipped in public, it is reported that Prithvi had diverted bank funds to real estate and made false claims about significant global contracts.

For a while, the Securities and Exchange Board of India (SEBI) had surprisingly chosen to remain a mute spectator to the company’s brazen actions. After Moneylife exposed the company’s practices a couple of months ago, SEBI stood up and took notice, and claims to have been investigating the company since.

Amitava Lahiri, senior VP and head of IT services at Prithvi had told the Financial Chronicle a few days ago that this acquisition is part of an overall strategy to make Prithvi a $1 billion firm by revenues. This seems ambitious considering the state of the company’s financials, which are worsening every year. For the March 2010 quarter, the company has recorded a net loss of Rs49.58 crore as against a net loss of Rs6.87 crore for the previous corresponding quarter. Its year-on-year performance has also witnessed a substantial drop. For the year ended 31 March 2010, the company registered a net profit of Rs4.92 crore compared to Rs44.46 crore for the year ended 31 March 2009.

Yet, the company appears quite optimistic about its future. Prithvi expects to bag several new deals this year and has even firmed up plans to increase its headcount in view of the same. Reports state that the company is looking to recruit about 1,000 more people to cater to its ‘expanding’ business.

Considering the extent of Prithvi’s financial machinations, one would think either the regulator or the stock exchanges would have taken the company to task long ago. Their deafening silence till recently was really surprising. Now that SEBI has supposedly decided to take a closer look at the company, some concrete action should be expected soon.

It should be a worrying fact for SEBI that the company remains unabashed despite the regulator’s presence.

 

User

COMMENTS

Jackie Johnson

1 month ago

Madhavi Vuppalapati is a con artist that should be in prison. She has an outstanding federal arrest warrant in the USA.

Rahul Ekbote

6 years ago

Dear all,
One major share broker has ownership of prithvi's major share hodings,so due to his contacts SEBI not taking action on management,name of Mumbai broker is S.B.

Rick

7 years ago

You are doing great service to Indian investors by showing courage to cover these companies. These businesses are shell for illegal activities and most of what they do is built on lies and fraud.

This company should be targeted for some investigative journalism. You will be surprised how easily they can come down...try this...

madhukar

7 years ago

You must write management's reply to your news/allegations to make your article, even.

ramesh b

7 years ago

your articles on companies....StandChrt,Nitesh,Prithvi....very interesting...thanks...pl.keept it up!

Retired bank employees get a raw deal in new wage agreement

Retired bank employees who want to join a pension scheme will have to refund the entire amount paid by the bank to their provident fund account and the interest accrued thereon, along with their share in the contribution

Retired bank employees, who had opted for provident fund (PF) and gratuity at the time of retirement instead of a pension, are feeling left out from the benefits of the new wage settlement signed between the Indian Banks Association (IBA) and the United Forum of Bank Unions (UFBU), a body comprising nine bank unions.

According to the new wage agreement signed on 27 April 2010, about 8 lakh employees from 26 public sector banks (PSBs), 12 private sector and 8 foreign banks will get a salary hike of about 17.5%. The revision will cost banks Rs4,816 crore, including arrears payment from November 2007, which will be given in a lump sum, K Unnikrishnan, deputy chief executive, IBA said.

A total of 2.7 lakh employees and 60,000 pensioners will be benefited by the second pension option in the agreement. For employees who had not joined the pension scheme in 1995, the new agreement gives them another opportunity to join the scheme. However, there is a catch. They will have to refund the entire amount of the bank's contribution to their PF and interest accrued thereon received on retirement with the employee’s share in the contribution.

"On an individual basis, this payment over and above the bank's contribution to PF and interest thereon has been worked out at 56% of the said amount of the bank's contribution to the PF and interest thereon received by the employee on retirement," the agreement, a copy of which is with Moneylife, says.

According to a comment posted by ‘Bhas’ on forestlaneshul.com, new pension optees will have to pay 2.8 times of their November 2007 revised salary from the earlier agreed 1.6 times. "All unions kept mum on this, which came to light only after signing and yet they say this is historic. All plans were accepted as per IBA modifications, and for this it has taken almost two and a half years," the comment reads.

CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA) and convener for the UFBU, said, "People had made the mistake of not joining the pension scheme earlier and some of them are still not ready to accept it. What they are not willing to understand is with the pension scheme, they can receive a regular income more than the interest they may earn. Plus this pension has a provision for dearness allowance to be revised every six months."

Refunding the entire amount of the bank's contribution to their PF and interest accrued thereon received by the employee on retirement with the share in contribution has not gone down well with some retired bank employees. Whether the employee retired in 1997 or in 2007, there is no differentiation and both have to refund the entire amount of bank’s contribution along with interest. For example, an employee who retired in 1997 might have received Rs6 lakh as terminal dues. If he invests the same amount at an average interest rate of 8%, then he would receive about Rs48,000 per year just as interest. From 1997 to 2010, he most probably would have received more amount as interest than his investment. 

"This second pension offer is nothing but a cruel joke on retired bank employees. Retired bank employees, especially those above the age of 66, are finding this offer unviable and unfair since they have to pay a heavy sum and chances of recovering the principal amount are less," said Jagdip H Vaishnav, a retired bank employee.

When asked to explain the contribution and pension per month, Mr Venkatachalam said that if for example, an employee had received Rs10 lakh as PF and gratuity on retirement, then he will have to refund this Rs10 lakh plus around Rs5.5 lakh as his own contribution. However, the bank will also contribute around the same amount and the actual amount an employee has to refund comes to Rs10 lakh. To add to this, he will receive pension arrears of eight months at a rate of about Rs15,000 per month. If he can use this money for the refund amount, then his actual contribution to the new pension scheme comes to just about Rs8.5 lakh. He will continue to receive Rs15,000 every month thereafter. In addition, after every six months, the dearness allowance component in his pension will increase, so he will receive more money. On the other hand if he invests Rs8.5 lakh, then he would get an interest of about Rs68,000 for a year or  Rs5,700 per month. Now he has to decide whether to opt for Rs15,000 per month or Rs5,700 per month, Mr Venkatachalam said.

One problem with the pension scheme is that some of the retired employees may not have enough cash left with them since usually people try to buy expensive things such as a home or a four-wheeler from the money earned at retirement. They most likely would find it very difficult to garner the required money so as to receive monthly pension or regular income.

Vishwas Utagi, secretary, AIBEA said, “We have been advising employees to keep the funds they received at the time of retirement separate, in case they plan to opt for the new pension scheme. So, I think refunding the bank’s contribution and interest should not be an issue.”

The UFBU has been asking the IBA to allow another option to for those to join the pension scheme—employees who were in the service of banks prior to 29 September 1995 in case of PSBs, and 26 March 1996 in case of associate banks of the State Bank of India (SBI) and who did not opt for the scheme. IBA, however, was not ready for the same due to cost considerations. The UFBU then offered to share a portion of the initial funding liability on a one-time basis for extending pension to the non-optees.

An actuarial valuation of liability by actuaries showed an estimated funding gap of Rs6,000 crore. The UFBU offered to contribute 30% or about Rs1,800 crore to bridge the gap for retired employees. An actuarial valuation on similar lines as conducted for serving employees had estimated the funding gap as Rs3,115 crore for those retirees or their families.

“Moreover, as per the new wage agreement, bank employees, both in service and retired, will receive arrears effective from November 2007 and it would help them while contributing to the 30% funding gap,” Mr Utagi said.

UFBU is receiving calls from children of retired bank employees asking how much their parents will have to pay to get a regular monthly income and these children are ready to pay from their own pockets, Mr Venkatachalam added.

User

COMMENTS

jayakumar

4 years ago

The wage revision of August 2002
was not made applicable to employees who took retirement on 31st March 2004.Pension was not fixed as per 2002 wage revision and the retired employees has been totally neglected by GIPSA managements. It is heartening to note that these retirees has to fight for their eligible rights through court because of the anti labour attitude of these managements.
When the counterpart Bank retirees are geting all the benefits why not insurance employees.Is it only crying baby would get milk attitude of GOI and GIPSA ?

Jayakumar

anil bhalla

5 years ago

I premature retired after 16 years incl suspension period in indian Bnak paid only 15/33 with the interference of court after 10 years no interest was paid no pension is paid on suspension period

VISWANATHAN N

5 years ago

The GRATUITY for those who opted for VRS prior to 21.05.2010 has got a raw deal by getting only 3.5 lacs and thereby lost their heavy life savings.
If somebody takes effort on this we will be happy.

msreenivasan

5 years ago

though the present employees in banks are to retire in future they have not taken care of the ex/retd. employees pension who shed their blood as sweat and who contributed their might for the growth of the bank whether present wage negotiators will take care of retd employees? god only knows

sudhirchandra vaikunthlal desaiexstaff

5 years ago

as i want to go to puri (jagannath puri),hence i need bob holiday home & controlling branch details address with fax no & telephone no, to attend bhagwat
katha.i had applied holidayhome at puri from 01/03/2012 to 08/03/2012.kindly send me fax no of bob swargdwar branch,puri & which excat name of bob holidayhone hotel. I retired from bob,ambawadibranch on 31/05/1997 as an acting senior manager

REPLY

sudhirchandra vaikunthlal Desai EXSTAFF

In Reply to sudhirchandra vaikunthlal desaiexstaff 5 years ago

as i Retired as an acting senior manager on 31/05/1997 from bank of baroda, Ambawadi branch, Ahmedabad. As i want to know details of our bob holiday home hotel & bob controlling branch's full addresses of both with fax no,Tele no & e-mail of bob PURI to enable to send at the correct destination.

JK

5 years ago

IT IS STILL A MYSTERY THAT GIPSA MANAGEMENTS HAVE NOT PAID THE PENSION ARREARS TO SVRS 2004 EMPLOYEES AS PER THE REVISED 2002 SALARY-WILL THEY IMMEDIATELY DO IT FOR THEIR OLD AGED RETIREES?

sumankumarsingh

5 years ago

Dear sir,
It is quite distressing to note that pension option not extending to the resigned bank employees since there is no option than to put the word resignation in the letter they (banks) have not relived. So its forcebily used (word resignation) by the employee. just for that reson we have beeen denied the second option of pension since the pension scheme is SOCIAL SECURITY MEASURE government should interveen and do justice to the resigned bank employees.
Let us hope it happen soon.
thanks.
suman.

SJayakumar

5 years ago

Justlike SVRS Bank employees,theGI employees also took etirement in April2004.The wageagreement of 2002 for wage revision was implemented.
But the employees who retired in April 2004 is YET TO get their revised pension based on 2002 effected agreement.Will GIPSA management kindly look into this matter ad arrange to pay the differential pension at the earliest?

gajendrasinh chavada

5 years ago

56% taken by banks must be refunded.as we have already contributed while in service.D A must be revised quarterly basis.

suman

6 years ago

dear sir,
Is there any news regarding resignees,
as there was no option to resign they have given letter like that ?
Later when the 2nd option has come why
iba and unions why they gone against resignees?
how it is justified?

JAYAKUMAR

6 years ago

We are the SVRS employees of GI companies,We took VRS in April 2004.There was two wage negotiations giving a good booster to workingn employees.But the retired employees isYET TO GET revision package although they asre eligible foe 2002 wage revision. It is regretted trhat Managements forget these builders of theorgnization. Just like Bank retirees when does Insurance companies under GIPSA employees get their benefits? Please be humanitarian.

REPLY

sharath

In Reply to JAYAKUMAR 6 years ago

It is really heartening to note that the eligible retirees are deprived of pension arrears despiteof court interference.The Managements should immediately release the arreears tothese sincere old employees who had built this big empire of insurance inIndia. Please follow the Bank Managements gesture towards employees who are in the fag end of their life.

SR Pagare

6 years ago

Those who have resigned after completing 16 yrs of service in bank from 1975 to 1991 can get the benefit of any pension facility. the concerned bank has refused to provide any pension scheme due to non completition of 20 years of service.

viveka nand jha

6 years ago

my father retired from bank of baroda on 30/04/2009 and he received Rs. 10 lacs as Pf i.e bank contribution. How much he has to deposite to opt pension. How much he gets as pension and from when.

MCAGRAWAL

6 years ago

PENSION OPTION FOR RETIREES UNDER NORMAL VRS - LEGAL POSITION



O1. VRS Scheme of Banks:

VRS scheme is prevailing in some banks as per Officers’ Service Regulations (OSR). The entire regulations contained in OSR are approved by Govt of India through Official Gazette Notifications from time to time based on the modifications effected. In other words, the entire OSRs are permitted/ approved by the Govt of India.

Therefore, it is deemed that the Officers who have gone under this VRS scheme have done so as per the Govt guidelines.



02. Joint Note dt 27.04.2010 & IBA Circular dt 10.08.2010



In terms of IBA circular No. CIR/HR&IR/G2/665/90/2010-11/999 DT 10.08.2010, among others, it clearly states that “Government has consented IBA to advise banks for seeking option from the employees both serving and RETIREES who did not opt for Pension earlier, explaining the terms and conditions for such Option”.



It is very clear that the Govt has consented for offering one more option for Pension to the Retirees who had not opted earlier.



In terms of Para No 3 of aforesaid IBA circular, Government has accorded sanction to implement the terms of settlement as per Joint Note dt 27.04.2010 for the grant of option to the Retirees and payment of pension to such Retirees w.e.f 27.11.2009, who opt for pension and comply with the terms and conditions set out in the settlement/ Joint Note for the grant of Pension.



Therefore, Govt has accorded permission to IBA for extending Pension Option to all the Retirees as per the Joint Note dt 27.04.2010.



In effect, all Retirees without any QUALIFICATION are entitled to opt for Pension.



03. Contradiction in IBA Circular dt 10.08.2010 with that of the Joint

Note dt 27.04.2010



As per para No 3 of the IBA circular dt 10.08.2010, IBA has obtained the consent of the Govt for implementation of the Pension scheme and in this para nowhere the word SUPERANNUATION is used.



However, under Para No 13 (page 2) IBA states “ …….. in terms of Joint Note dt 27.04.2010 Officer Employees who ceased to be in the service on account of retirement on SUPERANNUATION are eligible to opt for joining the pension scheme now as retired employees subject to the terms and conditions stipulated.



Therefore, it is clear that while obtaining the permission from the Govt, IBA has not included the word “Superannuation” and only under para No 13 it is for the first time IBA used the word “Superannuation”.



In effect, IBA has arbitrarily put this word without the permission of the Govt to create avoidable confusion and contradiction to only delay implementation of the pension settlement.



This can be further corroborated by the following acts of IBA:



IBA PRESS RELEASE dt 27.04.2010:



In terms of this Press release, another option of pension is given to all existing employees who did not opt earlier and also who have retired/died after pension regulations 1995/96.



IBA PAPER AD/ NOTICE TO THE RETIRED EMPLOYEES TO OPT FOR PENSION:



IBA’s notice to all the Retirees to opt for joining the Pension scheme appeared in all the major newspapers of the country. The entire notice carried eligibility criteria linked to the Joint Note dt 27.04.2010. Nowhere in this Notice the word is “Superannuation” used.



In fact, Joint Note Para No 13 reads “ any difference of opinion regarding interpretation of any of the provisions of this Joint Note, the matter will be taken up at the level of IBA and the Officers’ Association for discussion”



IBA without discussing this issue with Officers’ Association has wrongly and orbitrarily incorporated the word “Superannuation” thus violating the sanctity of Joint Note and the Bi-partite settlement and also has misled the Govt as Govt permission is available for implementation of Joint Note dt 27.04.2010.



This is nothing but the breach of trust reposed by the Govt /UFBU on IBA.





04. DEFINITION OF “RETIREMENT” AND “SUPERANNUATION”

FOR THE PURPOSE OF PENSION OPTION.



(A): DEFINITION OF RETIREMENT:



Regulation 2(k) of Bank (Employees) Pension Regulations 1995 defines Date of

Retirement as “means the last date of the month in which:



- An employee attains the age of Superannuation OR

- The Date on which he is Retired by the Bank OR

- The DATE ON WHICH THE EMPLOYEE VOLUNTARILY RETIRES or

- The Date on which the officer deemed to have Retired.



Therefore, it is very clear that as per Pension Regulation 1995, Retirement also

includes employees who have gone under VRS



Regulation 2(y) of Pension Regulations 1995 defines Retirement as:



(a) On attaining the age of Superannuation specified in the service regulations

(b) ON VOLUNTARY RETIREMENT IN ACCORDANCE OF THE PROVISIONS CONTAINED IN REGULATION 29

(c) On premature Retirement by the Bank before attaining the age of Superannuation



Under Regulation 2(y) also it is very clear that Retirement includes VOLUNTARY RETIREMENT as per the provisions of Regulation 29.



Regulation 29 of Bank (Employees) Pension Regulations 1995 states about Pension on Voluntary Retirement:



(1) ……….. at any time an Employee has completed 20 Years of qualifying service by giving notice of not less than 3 months in writing to the Appointing Authority to Retire from service.



(2) The Notice of Voluntary Retirement shall require acceptance by the Appointing Authority



FROM THE PENSION REGULATIONS IT IS VERY CLEAR THAT AN OFFICERS WHO HAVE GONE UNDER VRS SCHEME OF THE BANK HAVING COMPLETED 20 YEARS OF SERVICE ARE ENTITLED FOR PENSION.



(B): DEFINITION OF SUPERANNUATION:



(i) Regulation 2 of Bank (Employees) Pension Regulations 1995 defines various terminologies of the Act.



Nowhere under this Regulation, the word” Superannuation” is defined like other terminologies.



However, Regulation 2[y(a)] while defining the Retirement mentions that “on attaining the age of “Superannuation” specified in the Service Regulations or Settlements”.



On a detailed perusal of Officers’ Service Regulations (OSR), nowhere the word ” Superannuation” is found. In other words, it is not there in the entire OSR.



However, under Regulation 19 of OSR, while mentioning the AGE OF RETIREMENT it is stated:



1. The age of Retirement of an Officer Employee shall be as determined by the Board in accordance with the guidelines issued by the Govt from time to time.



2. Provided also that nothing in this regulation shall be deemed to PRECLUDE an Officer Employee from Retiring earlier pursuant to the Option exercised by him in accordance with the Rules in the Bank.





FROM THE ABOVE IT IS ABUNDANTLY CLEAR THAT “SUPERANNUATION” MEANS AND INCLUDES :



- Officers retired in accordance with Govt guidelines



- And also those Retired under Voluntary Retirement Scheme of the Bank in accordance with the Rules in the Bank.



IN OTHER WORDS, ALL THE OFFICERS WHO HAVE OPTED FOR VRS AFTER COMPLETING THE REQUIRED NUMBER OF YEARS OF SERVICE IN THE BANK AND DULY COMPLYING WITH THE RULES OF THE BANK HAVE ACTUALLY RETIRED OR SUPERANNUATED.



Hence, even if interpreted that para no 13 of IBA circular dt 10.08.2010 mentions retirement on account of Superannuation, Officers under VRS are covered by the same and hence eligible to opt for pension as per joint note dt 27.04.2010 and IBA circular dt 10.08.2010.





Further confirmations to the above can be undoubtedly confirmed by the following:



01. MOU between IBA and UFBU dt 27.11.2009:



In the MOU, among others, it is agreed by the parties to the MOU that one more option for Pension to be extended to all the Retirees who were in the service of the Bank prior to 29.09.1995/26.03.1996 and Retired after that date and prior to the date of the Joint Note (27.04.2010). Here, Retiree does not have any suffixes or prefixes.



This MOU was discussed by IBA and the UFBU with the Hon’ble Finance Minister and upon his concurrence only the MOU was culminated into Joint Note dt 27.04.2010. Therefore, IBA has obtained concurrence from the Hon’ble Finance Minister for providing one more Pension option to all Retirees without any qualification.





02. DISCUSSIONS BETWEEN IBA AND UFBU ON 9TH AND 10TH DECEMBER

2009:



The Circular issued by AIBEA and UFBU dt 10.12.2009 is appended hereunder:



ALL INDIA BANK EMPLOYEES' ASSOCIATION

Central Office: “ PRABHAT NIVAS ”

Singapore Plaza, 164, Linghi Chetty Street, Chennai-600001

Phone: 2535 1522,6543 1566 & Fax: 4500 2191, 2535 8853

e mail ~ [email protected] & [email protected]







CIRCULAR NO. 26/48/2009/43 10th December, 2009



TO ALL UNITS AND MEMBERS:



Dear Comrades,



We reproduce hereunder the text of UFBU Circular No. 19 of date on the details of the talks with IBA held on 9th and 10th December, 2009.



With greetings,

Yours comradely,



(C. H. VENKATACHALAM)

GENERAL SECRETARY



TALKS WITH IBA

Further to the signing of the Minutes with the IBA on 27-11-2009 on our demands for wage revision and pension option, yesterday i.e. 9-12-2009, a round of discussions took place between IBA and UFBU. IBA’s team was led by Mr. Allen Pereira, (CMD, Bank of Maharashtra) and Vice Chairman of their Negotiating Committee. From the UFBU, all the 9 constituent unions participated in the Talks.

During this meeting, the broad approach to expeditiously finalise the full settlement was discussed. It was decided that construction of new pay scales, revision of allowances, drafting of the Settlement, etc. would be taken up in subsequent meetings to be held separately with the 5 Workmen Unions and 4 Officers Associations.

It was further decided that the drafting of the settlement on wage revision and pension option be simultaneously undertaken so that both the settlements can be signed together.

Arising out of the Minutes on pension option, it was mutually clarified and understood that ‘Retirees’ would mean and include employees/officers who have retired on normal superannuation, those who have retired under VRS/Special VRS and families of the PF optees who had died during the period all of whom would be eligible for the pension option. Issues like cut off date, formula for sharing of the additional cost of pension option, etc. were taken up and would be discussed further.

Today (10-12-2009), IBA held separate meetings with the Workmen Unions and Officers Associations during which proposals for construction of pay scales, etc. were discussed. Since the construction of revised pay scales is the most important issue, the matter needs further discussions. It was decided that the discussions would be further continued in the next round of meeting for which dates would be fixed up shortly.

With greetings,

Yours comradely,

Sd..

(C. H. VENKATACHALAM)

CONVENER



FROM ALL THE ABOVE LEGALLY TENABLE FACTS IT IS VERY CLEAR THAT OFFICERS UNDER VRS OF THE BANKS ARE ELIGIBLE TO OPT FOR PENSION BASED ON JOINT NOTE DT 27.04.2010 AND IBA CIRCULAR DT 10.08.2010.

05. Where Officers under VRS have been reckoned for the purpose of computation of Load Factor by Actuaries:

As per the format devised by IBA/ Actuary, banks were advised to furnish information relating to both Serving and Retired Employees as on 31.03.2008 as under:

- Number of Serving Employees who are PF Optees as on 31.03.2008

- Names of the Retired Employees and the Banks PF contributions in respect of each of them.

Each bank has furnished the above information. Therefore, every employee of the bank either serving or retired as on 31.03.2008 has been reckoned for computing the Load factor and hence VRS optees should be given the opportunity to opt for pension.

06. PROVIDING OPPORTUNITY TO RETIREES UNDER SVRS AND CREATING DISCRIMINATION AMONG RETIREES;

As per Joint Note dt 27.04.2010 and IBA circular dt 10.08.2010, opportunity has been provided to Retirees under SVRS to opt for Pension. The ridicule part is that Option is allowed even to those Officers who had just completed only 15 years of service as against the minimum required Pensionable service of 20 years as per Pension Regulation 29.

Banks and IBA were generous to launch SVRS in 2001 and allowed Officers to prematurely Retire by offering a very BIG BOOTY of Advance salary for the remaining years of service subject to a maximum of 5 years.

Each of the SVRS Retiree at an young age got a huge Purse from the bank that too in 2001 when the value of money was good and the bank Deposit interest rates were good.

In respect of already Pension Optees, they got the Double benefit, in terms of 5 years Advance salary by way of Golden shake hand and also started drawing pension from the first day of their Retirement. It meant that, these Retirees got both Salary and Pension for the first 5 years of their Retirement from the very day of their Retirement.

WHEREAS BANK AND IBA ARE TRYING TO EXCLUDE HONEST RETIREES WHO HAVE OPTED FOR VRS AS PER BANK SCHEME WITHOUT GETTING EVEN A SINGLE PAISA BENEFIT FROM THE BANK APART FROM NORMAL ENTITLEMENTS.

From the above, it is very clear that IBA has taken partisan stand in providing extra benefits to SVRS optees by bending laws to accommodate them and leave out deserving and Legally eligible Retirees.

THIS IS HEIGHT OF DISCRIMINATION AND INFRINGMENT ON THE RIGHTS OF RETIREES UNDER VRS AS CONFERRED IN OUR CONSTITUTION.

The Discrimination in allowing Pension Options to Retirees have been strongly condemned by several Courts including the Supreme Court in the past in various cases filed by aggrieved Retirees at different points of time and BOTH THE CONCERNED BANK AND IBA HAVE BEEN STRONGLY REPRIMANDED FOR THIS

Both the IBA and the concerned banks are very well aware of these facts and the records are very much available with them.

For the ready information, certain decided cases where Courts have held a strong condemnation views against IBA and Banks for creating discrimination while awarding the verdict in favour of the aggrieved Retired employees of the Bank are furnished hereunder ( few select paragraphs are furnished):

(a). Canara Bank Vs B.M. Ramachandra & others, Judgment by Sri.R.P. Sethi, Hon,ble Chief Justice, High Court, Karnataka on 30.05.1997

“ It is acknowledged principle of interpretation and the rule of construction that if any impugned action is reasonably capable of construction which does not involve the infringement of fundamental rights, that construction must be preferred …….. Applying such a test in the present case it would be seen that if the interpretation sought to be put by the appellants is accepted, the same would amount in violation of fundamental rights of equality as enshrined in Articles 14 and 16. If the construction is assumed in favour of the employees, the SAME WOULD NOT RESULT IN THE VIOLATION OF ANY RIGHT MUCH LESS A FUNJDAMENTAL RIGHT…………..

Having regard to the facts and circumstances of the case, and the position of law as noted herein above, it can be safely held that the REGULATIONS WERE INTENDED TO BE MADE APPLICABLE TO ALL THE VOLUNTARILY RETIRED EMPLOYEES NOTWITHSTANDING THE CUT OFF DATE”.

“ It is now well settled that Pension is granted in lieu of long service rendered by an employee and considered as deferred portion of compensation for past service. IT CANNOT BE TERMED TO BE A CHARITY OR BOUNTY NOR IS GRATUITOUS PAYMENT SOLELY DEPENDENT UPON THE WHIM OR SWEET WILL OF THE EMPLOYER. In a democratic country like India, its origin is referred to SOCIAL SECURITY plans which are CONSISTENT with the SOCIO ECONOMIC REQUIREMENTS OF THE CONSTITUTION. ………………………………………….”

“ It is held that the persons like the writ petitioners were entitled to the pensionary benefits on account of the services rendered by them upon satisfaction of the conditions specified in the Regulations and that grant of such pension was neither a concession nor a charity or bounty”.

The Judgments refers to the various cases and a landmark Judgment of Supreme Court is quoted by the Hon,ble Chief Justice while delivering the Judgment as under:

A constitutional Bench of Supreme Court in Nakara,s case( D.S.Nakara & others Vs Union of India.

“ With the expanding horizons of socio economic justice, the Socialist Republic and Welfare State which the country endeavors to set up and the fact that the old men who retired when the emoluments were comparatively low are exposed to vagaries of continuously rising prices, falling value of rupee, inflationary inputs, BY INTRODUCING ARBITRARY ELIGIBILITY CRITERIA THEREBY DIVIDING A HOMOGENEOUS CLASS, THE CLASSIFICATION BEING NOT BASED ON ANY DISCERNABLE RATIONAL PRINCIPLE AND BEING WHOLLY UNRELATED TO THE OBJECTS SOUGHT TO BE ACHIEVED BY GRANT OF LIBERALISED PENSION AND THE ELIGIBILITY CRITERIA DEVISED BEING THOROUGHLY ARBITRARY…. VIOLATES ARTICLE 14 AND IS UNCONSTITUTIONAL AND LIABLE TO BE STRUCK DOWN”

The Judgment also refers to the All India Reserve Bank Retired Officers Association’s case where the Supreme Court again relied upon Nakara’s case and held that:

“ If the choice of the date results in classification or division of members of homogeneous group it would be OPEN TO THE COURT to insist that it be shown that the classification is based on an INTELLIGIBLE DIFFERENTIA and on RATIONAL CONSIDERATION which bears a nexus to the purpose and object thereof. The differential treatment must be justified on the touchstone of Article 14 FOR OTHERWISE IT WOULD BE OFFENSIVE TO THE PHILOSOPHY ENSRINED IN THE CONSTITUTION”

07. IBA’s Clarification to one Bank:

Whether IBA is authorized to clarify:

As per Joint Note dt 27.04.2010 Para No 13 “ any difference of opinion regarding interpretation of any of the provisions of this Joint Note, the matter will be taken up at the level of IBA and the Officers’ Association for discussion”

It is understood that one of the nationalized bank had sought some clarification from IBA about the eligibility for opting for Pension and IBA had reportedly clarified that VRS optees are not eligible.

IBA without discussing this matter with Officers’ Association has wrongly clarified as above without reference to either Pension Regulations OR Officers’ Service Regulations and thus discriminated the homogeneous group. Also, IBA has violated the sanctity of Joint Note and the Bi-partite settlement and also has misled the Govt as Govt permission is available for implementation of Joint Note dt 27.04.2010.

HENCE THE REPORTED CLARIFICATION GIVEN BY IBA IS ULTRAVIRES THE JOINT NOTE DT 27.04.2010 AND TO BE STRUCK DOWN.

FROM A DETAILED ANALYSIS AS ABOVE, IT IS VERY CLEAR AND LEGAL THAT OFFICERS UNDER VRS AS PER OSR BE GIVEN THE OPTION FOR PENSION AS PER JOINT NOTE DT 27.04.2010.

MCAgrawal

6 years ago

The VRS can be taken as per scheme of the bank and officers service regulation provides for that. 3 months notice is required and it is to be accepatable by bank then only u can take VRS...in case of resignees one can resign at any moment of time even with out notice and acceptance by bank...Resignees services are forefeited as per pension regulations..Resignees are not entitled for all the benefits as given to person going on superannuation..like PL encashment is half to resignees...However wherever vrs scheme is not there in bank,bank should treat their status as retirees and such persons should also be entitled for the benefits as avialable to person retired on superannuation....The matter should be explained to IBA by UFBU leaders and they should press them hard to make pension available to all such people.

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