Delhi HC Admits Plea from AIBOC, issues notice to Govt on Proposed Merger of Bank of Baroda, Dena Bank and Vijaya Bank
The Delhi High Court has issued notice and agreed to hear the plea of the All India Bank Officers' Confederation (AIBOC) challenging the proposal by the Central Government to amalgamate Vijaya Bank and Dena Bank with Bank of Baroda. 
 
AIBOC, with membership of more than three lakh bank officers across India, is contending that the process by which the merger decision has been taken is in violation of the Bank Nationalisation Acts (1970/80) and the Banking Regulation Act (1949) and the Constitution.  
 
According to the Association says, the in-principle approvals given by the banks' boards are void as the posts of workmen and non-workmen directors on the bank board has been kept open for years by the government. "The decision to give approval to amalgamate the entities cannot be validly taken without the participation by the workmen and non-workmen directors, who are important stake holders in such a decision," it added.  
 
AIBOC also contended that the process has unlawfully ignored the role of the Reserve Bank of India (RBI) and that the union government is thrusting the amalgamation decision onto RBI, which is supposed to be an independent regulator of the banking sector.
 
The plea (WP (C) 10954/2018) came up for hearing before a Division bench consisting of Justice Ravindra Bhat and Justice AK Chawla. Senior Advocate Arvind P Datar appeared for AIBOC. Central Government and Bank of Baroda were represented by the newly appointed Solicitor General Tushar Mehta and ASG Maninder Acharya.  
 
Next hearing of the case will take place on 29 October 2018.
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COMMENTS

Ramesh Poapt

2 months ago

jaise ko taisa mila?!

Dayananda Kamath

2 months ago

It means AIBOC learnt the lesson from corporation bank episode to fight a legal battle.
In corporation bank AIBOC unit forced the management to introduce VRS, A rare case in the history of trade union. Just to benefit some members and to retain its majority status as these members threatened to resigning from the union.
A special Board meeting was called for just to approve the VRS to officers. At that time majority clerical union was opposing VRS. And the workmen union Director on the board as a last resort pointed out that the share holders representative directors are not there in the board as their term expired. Taking such vital decisions without representatives of stake holder is illegal. RBI and Govt Directors concurred hence it was deferred.
This VRS led to the downfall of Corporation bank as Majority union lost moral right to demand staff.

REPLY

Dayananda Kamath

In Reply to Dayananda Kamath 2 months ago

The battle for Board Room seat, business line dtd 12/10/2017
It has come at right time there are no employee and officer director in non of the public sector banks as on date. The good governance mismanagement of Public sector banks.
In Corporation Bank when a note for new branch is to be presented it used to have a para how the additional staff will be sourced for the new branch to be opened.
Excess staff from the region will be redeployed was the standard phrase.
It was high time of cross fire between recognised employee union opposing VRS and recognised officer union demanding VRS as given in other banks.
The employee Director raised the issue of how many excess staff are there in region to deploy on these notes. The department completely withdrew that para itself from board note and non of the board members objected to this practise.
So what deference does it make who is director if vital particulars are conveniently removed, and decisions are taken and approved.
Once again good governance by scam free Govt.

Dr.Dhananjaya Bhupathi

2 months ago

https://www.moneylife.in/article/delhi-hc-admits-plea-from-aiboc-issues-notice-to-govt-on-proposed-merger-of-bank-of-baroda-dena-bank-and-vijaya-bank/55536.html
1. It is a prudent, bold and timely decision by AIBOC headed by Comrade D.T.Franco, the GS of AIBOC & ITS EXECUTIVE COMMITTEE.
2. It is most annoying to note ‘CONSPICUOUS SILENCE OF AIBEA, THE WORKMEN UNION,’ headed its GS.,Comrade Ch.Venkatachalam and all other affiliates of UFBU.
3. All the bank employees + the retirees pin all hopes on UFBU/CBPRO/AIBRF leadership to coe to their senses & support AIBOC’s writ petition in Delhi HC.
4. SATYAMAEVA JAYATHE!!!

Ravindra Dave

2 months ago

Why d PSU Bank should be amalgamet ? Why not culprit corporate heads & all d big bosses of PSU Bank r to be charged? Let's seized their properties nd send all culprits to a jail for a minimum 5 yrs imprisonment.

Ravindra Dave

2 months ago

Why d PSU Bank should be analyst? Why not culprit corporate heads & all d big bosses of PSU Bank r to be charged? Let's seized their properties nd send all culprits to a jail for a minimum 5 yrs imprisonment.

REPLY

In Reply to Ravindra Dave 2 months ago

India does not need so may bank, either they amalgamate or closed. because all are ruined the public fund, it is not the only story, many more yet to come.

Rupee at new low of 74.46/$
The Indian rupee slipped to a fresh record low of 74.46 to a US dollar during the morning session on Thursday.
 
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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Why an Efficient Financial System Is Crucial to Consumption Ecosystem
Access to financing of the right quality and quantity is critical for the growth of companies, industries and economies. In benign financial markets, the aphorism 'A rising tide lifts all boats' holds. It is only when market volatility appears that the quality of various businesses can be truly deciphered.
 
For India to truly boost its consumption-driven economy on the back of a growing middle class, a robust financial system is essential. Recent events, such as emerging markets volatility and decline in share prices, point to the need for companies to pay more attention to their 'capital structure'.
 
India has seen growth across the consumption spectrum. Everything from healthcare, consumer goods and financial services has seen growth over the past few decades, especially since 1991. While the economy has grown extensively, and consumption patterns have seen remarkable changes, there are still significant gaps in the economy that make for attractive investment opportunities.
 
For instance, hospital beds per person in India is still abysmally low at 0.9 per 1,000 people versus a developed economy such as the US which has 3.1 hospital beds per person. There is a need for more hospitals to provide both secondary and tertiary care. There is also an urgent need for educational institutions to impart requisite skill-sets to doctors and nurses. Moreover, rapid urbanisation has led to a rise in chronic diseases. Facilities that can cater to all the above needs create opportunities for investors, regulators and the public alike.
 
The most critical aspect of the healthcare ecosystem is that financing is needed for both infrastructure creation as well as for facilitating consumption. For instance, from a healthcare perspective, financial markets need to provide the right amount of capital and the appropriate capital structure to create hospital infrastructure. Also, financial instruments and financial markets need to help the end-consumer access healthcare.
 
Thus, the entire ecosystem needs to function efficiently. Infrastructure creation, insurance markets and consumer-lending markets need to perform in unison for the multiplier effects to accrue from healthcare.
 
If adequate capital is available for creating hospital infrastructure but access to healthcare for end-consumers is restricted due to a lack of financing options, then the hospital infrastructure will struggle from an investment perspective and fail to deliver economic value in the long run. Thus, for schemes such as Ayushman Bharat to indeed provide value, the entire ecosystem needs access to the optimal level of financing.
 
The need for a robust financial backbone is not limited to the healthcare sector alone. All consumer-driven industries function on the same dynamics, implying that commercial banks, non-banking financial companies (NBFCs) and other financial market participants are critical for economic growth.
 
While short-term solutions to address immediate needs are critical, the greater focus must be on long-term structural changes. The issues that NBFCs specifically, and credit markets in general, face point to the need for creating a robust wholesale finance market. While a deep corporate bond market and a secondary market for loans are critical, these will all take time to evolve.
 
The structural changes needed most urgently are twofold. India needs to reassess the credit rating framework. Unless we find a more robust and foolproof mechanism to reflect credit risk through constant changes to credit ratings, market disruptions through the jump to default scenarios will be unavoidable. There is a need for a more transparent credit rating mechanism from the various agencies that can be a better indicator for embedded credit risk.
 
Additionally, as regulators mull over new regulations for NBFCs, there is scope to limit what sort of an asset-liability mismatch NBFCs can undertake. An NBFC that borrows from the wholesale market to lend to credit markets needs to be restricted regarding how much short-term borrowings can finance long-term lending. The eventual aim is to create a functional 'securitisation' market, whereby the NBFCs can pass on some of the term risk and premium to the institution lending to the NBFC.
 
A more robust credit rating system along with restrictions that lead to better management of 'term risk' is essential for the financial system to deliver value.
 
Structural changes that can create financing and flow of credit across the ecosystem are the need of the hour, especially with an eye on boosting the consumption-driven economy. Each component of the ecosystem merits attention.
 
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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COMMENTS

Ralph Rau

2 months ago

Have the Credit rating agencies have been caught sleeping on IL&FS ?

Does an illustrious promoter group like LIC, HDFC and SBI along with marquee foreign investors lull the CR Agencies into a false sense of security and complacency ?

Are the audit firms and CR Agencies all enjoying cosy relationships with their pay master, their client ?

Who will police the policeman ?

Its time we began rating the quality of the CR Agencies who should be expected to disclose their rating failures on their website.

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