Update On Bank Staff Wage Revision 22nd april

A round of discussion was held today (22-04-2013) in Mumbai between IBA and UFBU on our charter of demands for revision of wages and service conditions.The IBA was represented by the negotiating team headed by Mr. T M Bhasin (CMD Indian Bank and Senior Vice President, IBA). UFBU was represented by the constituent unions. NOBW could not be present due to their pre-fixed agitational programme in Delhi.

During this meeting, IBA provided the detailed data relating to establishment expenses of the banks as on March 31st 2012, which will be taken as the basis for calculations in the ensuing wage revision exercise. According to the data, the total establishment expenditure/wage bill of the public sector banks as on 31-03-2012 comes to Rs. 56,292 crores for workmen and officers put together.

The IBA also submitted the following Management issues for discussions by UFBU:

Officers:
1. Introduction of Cost to Company.
2. Introduction of Performance linked Variable Pay.
3. Restrictions on applicability for wage revision.

Workmen:
1. Introduction of Cost to Company.
2. Introduction of Performance linked Variable Pay.
3. Deployment of Staff by invoking Para 536 of Sastri Award and superseding the provisions of 8th BPS.
4. Rationalisation of special pay posts.
5. Departmental action to continue after retirement.
6. Premature retirement of workmen employees in public interest after 55 years of age or 30 years of service.
7. Simultaneous disciplinary action under departmental enquiry as well as judicial proceedings.

IBA further stated that they would make their presentations on these issues in the next meeting. They also informed that the next round of discussions would be held by the middle of May 2013.

Comrades, while we have come to the IBA for wage revision, it is clear that they are trying to foist anti-employee,anti-officer propositions. It appears that wage revision will be a challenging task before us. Hence our unity and vigilance are very important when we proceed with our charter of demands.

From the UFBU we insisted on the IBA that the long pending issue of compassionate ground appointment scheme should be resolved on a priority basis. We also brought to their notice the problems faced by employees and officers on account of introduction of Grid-based clearing system by the RBI and urged for solution so that the issue does not become a dispute.

Banks may pitch for ‘cost-to-company’ wage concept during talks with unions

MUMBAI, APRIL 18:  

The collective bargaining exercise for wage hike in public sector and old generation private sector banks could take an interesting turn.

Bank managements are likely to broach the sensitive ‘cost-to-company’ compensation concept with the 11 trade unions in the banking sector during negotiations.

The trade unions represent the interests of close to 10 lakh employees and officers in public sector and old generation private sector banks.

Public sector bank honchos have a buy-in from the Finance Ministry on pitching the CTC (cost-to-company) concept to the trade unions, said a top bank official clued in to the wage negotiations.

A management consulting firm is believed to have been given the mandate by the Indian Banks’ Association, the self-regulatory organisation of all banks in the country, for working out the modalities of the CTC concept.

UNIONS APPREHENSIVE

Trade union representatives feel that the CTC concept is a piece of financial engineering whereby the compensation appears attractive on paper but when it comes to in-hand salary, it could be as much as 30-40 per cent less that what is promised.

They fear that employees may actually be worse off as bank managements could push variable pay through the backdoor, thereby undermining the cardinal principle of labour rights – equal pay for equal work.

According to S. Nagarajan, General Secretary, All India Bank Officers’ Association, bank managements will bring up financial constraints being faced by them due to implementation of Basel-III regulations, which require banks to hold more and higher quality capital for making loans; and provisioning for bad loans and pension during the wage revision talks. Given the pressure on raising capital and provisioning, Nagarajan said bank managements will try to minimise the outgo on account of wages in the garb of transforming human resource processes and implementing new age concepts like CTC.

The Indian Banks’ Association has constituted a wage negotiating committee under the leadership of T.M. Bhasin, Chairman and Managing Director, Indian Bank, to negotiate with the trade unions on wage settlement. The first round of talks was held on February 22 and the next round is scheduled on April 22.

The ninth bipartite five-year wage accord in the banking sector expired on October 31, 2012.

http://www.thehindubusinessline.com/industry-and-economy/banking/banks-may-pitch-for-costtocompany-wage-concept-during-talks-with-unions/article4630726.ece

Tax saving schemes for Senior Citizens

Tax saving schemes for Senior Citizens

Latest Fixed deposit Interest rate data last Updated on April 5th, 2013 Assumptions: Rs. 100000 invested for 5 yearsfor Senior Citizens (interest compounded quarterly).As can be seen from the table below, you can potentially earn Rs. 7123 more (the difference in maturity value for bank offering highest vs lowest interest rate). This table shows the best fixed deposit (Best FD)at the top. This table shows the best fixed deposit (Best FD) at the top. It can be utilized to increase your returns without increasing the risk. Your entire sum including Saving Bank balance, RD, FD upto a maximum of Rs 1 Lac is insured in each of the banks by DICGC. These schemes are popularly known as Tax Saving Schemes, Tax Savings Plans, Tax saver plans, Tax Saving account, Tax Benefit schemes, Tax Saver Plans etc.Note that the maximum deposit allowed per financial year in on F.Y. u/s 80c of the IT act. All investments in tax saving deposits have a lock in period of 5 years. The interest earned on these deposits is taxable. There are other alternatives such as equity linked saving schemes (ELSS) mutual funds. ELSS investment has a lock-in period of three years. They do not assure any returns, their returns on the performance of the mutual fund. If the fund makes surplus, these funds typically give dividends, which currently is tax free as per Indian IT rules in the hands of the investor. Bank Duration Rate(%) Investment(Rs.) Maturity(Rs.) Axis Bank Axis Tax Saver 9.75 100000 159229 State Bank of Mysore SBM TaxSaver Scheme 9.60 100000 158144 State Bank of Hyderabad SBH Tax Saver 5 YEARS to less than 8 years 9.50 100000 157423 Bank of Baroda BOB Tax Saver 9.50 100000 157423 Indian Overseas Bank IOB Tax Saver 9.50 100000 157423 Andhra Bank AB Tax Saver 9.50 100000 157423 Dena Bank Dena Maha Tax Bachat Yojana 9.50 100000 157423 City Union Bank CUB Tax Saver Scheme 9.50 100000 157423 Karnataka Bank KBL Tax Planner 9.50 100000 157423 United Bank of India United Tax Saving Deposit Scheme 9.25 100000 155634 State Bank of Bikaner and Jaipur SBBJ TAX SAVER TERM DEPOSIT SCHEME 9.25 100000 155634 Bank of Maharashtra Tax Saving Scheme 9.25 100000 155634 IndusInd Bank Indus Tax Saver Scheme - 5 years 9.25 100000 155634 The Lakshmi Vilas Bank Lakshmi Tax Saver Deposit 9.25 100000 155634 ICICI Bank Tax Saver FD 80C (5 year) Upto Rs. 1 lac 9.25 100000 155634 State Bank of India SBI Tax Saving Scheme 9.00 100000 153862 The Karur Vysya Bank Limited KVB to TaxShield 9.00 100000 153862 ING Vysya Bank Ing Tax Saver 9.00 100000 153862 Allahabad Bank Allahabad Bank Tax Benefit Term Deposit Scheme 8.75 100000 152105

 

Loan recovery branch to be shut for PSU bank boards, more power to officials

KOLKATA: The government has told public sector banks to delegate more powers to lower and mid-level bank officials to speed up debt recovery at a time rising non-performing loans are seen throttling the country's financial sector's growth and prosperity. 

Fears that an already severe bad-loan crisis gripping public sector banks will get out of hand has forced the government to make it easier for banks to recover money. 

In a letter to bank chairmen recently, a senior finance ministry official asked each bank not to let board approvals delay decisions regarding stringent recovery measures. "I was also surprised to hear that in certain cases, permission of the board is required before stringent recovery measures could be initiated," Rajiv Takru, financial services secretary told bank chairmen in a recent letter.

"I would like to know the position in your bank. It is not understood why such a provision should exist and what is the extra level of wisdom that could operate in a case at the board level when each passing day results in higher potential losses for the institution," Takru added. 

Slew of layers slows PSU banks 

Mounting NPAs at various public sector banks have affected investor confidence, eroded bank profitability and prevented them from pursuing growth opportunities. The government has also been forced to consider equity infusion after a sharp increase in recent years in restructured assets plus non-performing loans as a percentage of advances. 

Gross NPAs of public sector banks increased from 2.28% in March 2010 to 4.01% in September 2012, Minister of State for Finance Namo Narain Meena informed the Lok Sabha last year. For the SBIBSE 1.98 % group, the gross NPA (as a percentage of gross advances) jumped from 2.82% in March 2010 to 5.16% in September 2012. The increase had as much to do with a slowing economy as with delays in loan recovery. 

"The speed at which private sector banks act is much faster than government banks," said Akeel Master, partner and head of financial services at KPMG in India. "How soon banks convert their market intelligence into action becomes the defining factor. In public sector banks, different layers of decision-making are perhaps one of the reasons behind the slow reaction time," he added. 

The case of Kingfisher AirlinesBSE -3.43 % is a classic example. Public sector banks are still sitting on non-performing loans of the defunct airline whereas ICICI BankBSE 0.50 %, a lender, managed to sell its Rs 430-crore loan to Kolkata-based Srei Infrastructure FinanceBSE -1.87 % last year itself. 

All banks have recovery committees empowered to take action against defaulters. But government officials have discovered the boards still involve themselves in all decisions, defeating the purpose of the committees.
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/loan-recovery-branch-to-be-shut-for-psu-bank-boards-more-power-to-officials/articleshow/19502510.cms

Banks record a third of its business of lending, raising deposits in March

MUMBAI: Banks have done almost a third of its business of lending and raising depositsin the month of March and managed to surpass the Reserve Bank of India's projections for the year.

Loans and deposits have 17% and 17.4% respectively in FY'13 surpassing the central bank's projection of 16% and 15% respectively for the year. For most part of the year, banks were grappling with a slowdown in both credit as well as deposit. Banks were cautious on fears of rising bad loans. Besides, corporate demand was also low because of lack of investment in new projects.

Notably, almost 35% of the business took place in the month of March. Deposits mobilised in the month amounted to Rs 3.75 lakh crore of the Rs 10.27 lakh crore mobilised during the year. While they lent Rs 2.69 lakh crore in March of the total of Rs 7.83 lakh crore lent during the entire fiscal year.

Banks often tend to shore up their business in the last months of any financial year to boost balance sheet size. Typically, banks lend short-term loans to their corporate clients, who then in turn park these funds with other banks as deposits. This circular activity tends to prop up both deposit and credit figures for them. These transactions are usually reversed by end of April.

Besides, a lot of repayments tend to take place towards the end of the year, which add to the resources of banks.
http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/banks-record-a-third-of-its-business-of-lending-raising-deposits-in-march/articleshow/19514686.cms