Registered with RNI, Delhi Regn. No. KARENG/2005/14831

452 Vol 38 - 8 February, 2020

Ever since the onset of Liberalisation, Privatisation the Code is tilted more in favour of the Corporates and Globalisation (LPG) in 1991, there has been a with a hidden agenda to strengthen “hire and fire” relentless attack on laws relating to the working class policy at the whims and fancies of the employer and trade unions with the sole aim of weakening which will further enhance the exploitation of the them in favour of the Corporates. This Government’s working class. A few regressive and disturbing mantra - “Ease of Doing Business” - has added fuel to provisions that are part of the IRC are: - the fire. As a part of the agenda and with the so called Membership: The Code while retaining the aim to streamline the industrial relations and improve employee threshold at 100, has given all the the Ease of Business Index, the Labour Ministry has powers to the Government to reduce or increase decided to amalgamate 44 labour laws into four codes the threshold through notification. It has also given — wages, industrial relations, social security & safety huge powers to the Government and the flexibility and health & working conditions. Inline with the same to reduce or increase the threshold for the purpose the Government has ventured into consolidation of of seeking permission before closure, retrenchment three existing laws - the Trade Unions Act, 1926, the and lay-off. However, it was not easy for the Industrial Employment (Standing Orders) Act, 1946 Government to increase the threshold to 300 to and the Industrial Disputes Act, 1947 and bring out fire them or even close shop without seeking its the Industrial Relations Code (IRC). This is the third permission. It is believed that the threshold was of the four labour codes that the Labour Ministry forced to be maintained at the current level due to intends to roll out as part of the labour reforms. relentless pressure from various quarters. These are said to be the next generation labour reforms Majority: Under IRC, a union that commands 75% to aid ease of doing business in India and boost or more workers on the rolls of the establishment growth and to attract domestic and foreign companies only will be recognised by the managements to invest more in the country. The stated objective of as sole negotiating/bargaining/majority union. IRC is “to consolidate and amend the laws relating to Where no trade union has 75% or more, IRC Trade Unions, conditions of employment in industrial provides for constituting a Negotiating Council by establishments or undertakings, investigation and the Government consisting of one representative settlement of industrial disputes and on matters from each trade union which has the support connected therewith or incidental thereto”. However, of not less than 10% members. This is clearly a from a close reading of the IRC, it is apparent that retrograde and divisive step to curb the rights of

Edited and Published by Editor Members Asso. Editor Y. Sudhindra Y. Sudhindra K.B. Prasada Satish Shetty Devaraja B.P. on behalf of the Owners : Rachappaji J. Printed by: Corporation Bank Officers’ M. Rajesh Dange Founder Editor : Sri T.R. Bhat Organisation (Regd.) Codeword Process & Printers, Licensed to Post Under License 106, Lobo Prabhu Court, Falnir, Mangalore - 575 001 MNG/128/2015-17 & SK/MNG/WPP/7 Light House Hill Road, Mangalore - 575 001 e-mail: [email protected] * Visit us @ our website:www.cboo.org * Phone: CBOO Central Office : 2422712, 2422501 * CBOO CENTRE : 2493 698

Officers’ Voice, February 2020 2 the majority union as a sole bargaining agent. contractual workers are treated on par While, majority status in all other cases is 51% with the permanent workers. including that in the Legislatures, Parliament etc., • The Code clearly defines an employee to whether prescribing 75% as a majority mark for include any person employed to do supervisory the trade unions is a deliberate attempt to incite and managerial work (also) while this section internal fights, constant bickering amongst the of the employees was excluded in the ID Act, trade unions, eternal unrest and horse trading? 1947. With multiplicity of the unions in every industry, • The Code underlines unfair trade this is an attempt to curtail the genuine rights practices on the part of the employer of trade unions that command a simple majority regarding restricting workers from the exercise presently. of their right to organise, form, join or assist Fixed Term Employment: A new (draconian) a Trade Union and restrain managements concept of Fixed Term Employment has been establishing employer sponsored trade union introduced in the Code that allows an employer of workers, among other things. to employ a person for a fixed term and thereafter Going by various provisions of IRC, the negatives the service of the employee will be terminated for the organised class overweigh the positives. or superannuated with statutory benefits, as The proposals are very serious and potent to applicable. This way, an employee under Fixed de-unionise the working class in no time. All Term Employment may be left with no job in the trade unions including those in the banking the mid years of his productive life, causing industry need to react swiftly to the proposed disguised unemployment, under-employment of IRC and cannot compromise on the hard-earned phenomenal levels and relegating the employable rights of the past. The studied silence of present, citizenry to despair. Though, this provision was among the unions appears to be a pointer to the approved by the Central Government almost lack of a determination to fight, paving the way a year back, it found no favour with State to the Government to sail through smoothly. Do Governments and thus was relegated. With the we really care for our collective rights? current Code, it is now mandatory for the States to follow it. Then the question that obviously OV arises is “Why fixed term is applicable only to working class and why not to the Elected Representatives?”. C O N T E N T S Page No. Strikes: As far as strikes are concerned, apart from the existing provisions, the Code CBOO News 3 includes Mass Casual Leave by 50% or more Sports Activities 5 of the employees used as a tool of agitation, Donation to Swasti 7 thus curtailing their rights to vent their anger Obituary 8 and protest, as a salvo on the management for redressal of their grievances. The right of AIBOC News 9 Mass Casual Leave will be snatched away to Banking Round up 16 enhance the powers already available with the Miscellany 25 managements. Circular Round up 32 Positives from the code: Retirements 35 There are a few positives also in the Code too: Class Room 39 • ILC envisages setting up a Worker Health Watch 40 Re-skilling Fund for training of retrenched employees. Though it allows companies Article by Shri T.R. Bhat 41 to hire workers on contract, it ensures that In Lighter Vein 44 Officers’ Voice, February 2020 3

Staff members participated in all the meetings Cboo news and expressed strong resentment against the government’s announcement of the merger of our PROTEST ACTIONS AGAINST MERGER OF OUR Bank. Speakers at the meetings informed the ill BANK effects of mergers drawing from the history of earlier Meetings merger of New Bank of India with Punjab National Bank in 1993 and Associate Banks with SBI and Protest Meetings under the aegis of United Dena Bank & Vijaya Bank with Bank of Baroda in Forum of Corporation Bank Unions’ against the the last couple of years. All members were exhorted announcement of merger of our Bank with Union to inform the ill effects of merger on closure/merger Bank of India was held at various centers during of branches of the merged entity, increase in service January, 2020 as detailed hereunder: charges/rate of interest, loss of future employment Date Place [Zones] to the youth of the country leading to increase in unemployment problem, continued slide in GDP rd 03 January, 2020 Mangalore [HO & Mangalore] affecting the economy of the country, ill-advised 05th January, 2020 Thrissur [Kochi] move for stake sale in Nava Ratna and Mini Ratna 05th January, 2020 Patna [Patna] Companies of the country like Bharat Petroleum Corporation Ltd (BPCL); Shipping Corporation th 19 January, 2020 Bhopal [Bhopal] of India; Container Corporation of India; Tehri 24th January, 2020 Panaji [Goa] Hydro Power Development Corporation (THDCIL), 25th January, 2020 Bangalore [Bangalore – and North Eastern Electric Power Corporation Ltd North & South] (NEEPCO) apart from closure of Metals & Minerals Trading Corporation of India (MMTC), State Trading 25th January, 2020 Delhi [Delhi – North & Corporation (STC) and Project and Equipment South] Corporation Ltd. The ill effects of such move on the 25th January, 2020 Mumbai [Mumbai & Thane] economy in terms of creation of monopoly in private 25th January, 2020 Chandigarh [Chandigarh] sector in some cases and exit by the Government in some strategic industries was also highlighted. 25th January, 2020 Chennai [Chennai] 25th January, 2020 Kolkata [Kolkata] All members were requested to stand by, for any call given by the unions in the fight against merger that th 25 January, 2020 Coimbatore [Coimbatore] received thunderous applause from the gathering. 25th January, 2020 Hubli [Hubli] Large number of members attended the meetings 25th January, 2020 Ahmedabad [Ahmedabad] travelling through the length and breadth of the zone and braving chilly weather at many places. 25th January, 2020 Lucknow [Lucknow] KUDOS TO ALL THE MEMBERS FOR MAKING 26th January, 2020 Jaipur [Jaipur] THE MEETINGS A GRAND SUCCESS. 26th January, 2020 Meerut [Meerut] - General Secretary 26th January, 2020 Pune [Pune] 26th January, 2020 Ludhiana [Ludhiana] Submission of Memorandum to District Collector 26th January, 2020 Nellore [Nellore] As part of action program in our fight against 26th January, 2020 Belagavi [Belagavi] merger of our Bank, all our zonal functionaries along with the functionaries of other constituents th 26 January, 2020 Vadodara [Vadodara] of UFCBU were advised to submit a memorandum 26th January, 2020 Bhubaneshwar to the District Collector/Commissioner in each and [Bhubaneshwar] every district. It is heartening to note that there 26th January, 2020 Trichy [Trichy] has been good response from the field and at many

Disregard of the law of discipline and restraint is suicide. -Mahatma Gandhi Officers’ Voice, February 2020 4 places, the memoranda have been submitted to the Responding, Zonal Chairman, Vijay Kumar, District Collector/Commissioner. assured that all efforts will be made to ensure that zone’s performance will grow in December quarter. As per the reports received from the functionaries, almost all the recipients have been very cordial The following issues faced by the branches were and have given a patient listening when explained brought to the notice of the Zonal Head: about the ill effects of mergers and its fall out 1. Problems faced by the branches in ATM cash on the economy, loss of employment, closure/ loading and requested for outsourcing of the rationalization of branches etc. same. It was assured from management side - General Secretary that all possible steps would be taken.

ZONAL CONSULTATIVE COMMITTEE MEETING 2. Providing Internet router for faster internet speed in all district headquarter branches that Chandigarh would enable branches to access websites like The Zonal Level Consultative Committee meeting CERSAI, PMFBY etc for easy completion of the was held on 09.12.2019. Zonal Head, Sri Hara work. The suggestion was taken positively by Mohan Sahoo, Deputy Zonal Head, Sri Ved Prakash the management and it was assured that any Sharma and Sri Sahil Gargi, Personnel Officer branch which gives proposal for the same will were present on behalf of management. CBOO was be sanctioned. represented by Zonal Chairman, Vijay Kumar, Zonal 3. Providing training to second line officers Secretary, Naveen Chandra, Zonal Lady Secretary, of branches so that project house-keeping Akanksha and Area Secretary, Kamlesh Bind. could be boosted and also build confidence Sri Sahil Gargi welcomed the members to the for restructuring of stressed MSME accounts. meeting. Zonal Head advised the Personnel Officer in the matter. Sri Hara Mohan Sahoo, Zonal Head, in his address informed that though the performance of 4. It was requested to dispose-off all the pending zone has improved during the September quarter, disciplinary cases at ZO level as soon as the performance of many branches are negative possible. Zonal Head assured to dispose of the over March-2019, which is a matter of concern same on the merits of each case. due to which the zone was able to achieve only 5. Denial of leave to all Branch Heads as a matter 5 parameters in the September quarter. While of policy was taken up and strong resentment acknowledging that the merger announcement has was conveyed and it was requested to consider brought concerns in the mind of customers, he said on merits of each case. Zonal Head requested to that branches should spread positive information support and co-operate till December end. to the customers to alleviate the fears in their mind with regard to merger. He expressed concern The meeting ended with vote of thanks from Sahil on the poor response to project house-keeping Gargi, Asst Manager, PAD. and concluded by requesting CBOO to advise its - Naveen Chandra, Zonal Secretary members to hasten submission of staff lapses report, wherever due, complete the review/renewal Kochi of borrower accounts and undertake restructuring Zonal Consultative Committee Meeting of Kochi of stressed MSME accounts, wherever feasible. Zone for the third quarter was held on 26.12.2019. Sri Ved Prakash, Deputy Zonal Head, spoke about Somasundaram, Zonal Chairman, Venkideswaran, the need to improve customer service in the branch Zonal Secretary and Raju Paul, Deputy Zonal and active participation of the branches in ongoing Secretary represented the organisation. campaigns.

Never believe the wicked though they are sweet tongued. The honey is only in the tip of their tongue – the heart is full of venom. - Chanakya Officers’ Voice, February 2020 5

Management side was represented by Zonal Head, The meeting concluded with vote of thanks by Sri Manjunathaswamy, Deputy Zonal Head, Sri Sri Sivaramakrishna Iyer, Assistant Manager, Janardhanan and Sri Sivaramakrishna Iyer, PAD. Assistant Manager, PAD. - Venkideswaran, Zonal Secretary Sri Janardhanan, Deputy Zonal Head, briefed ZONAL COMMITTEE MEETING about the achievements of the Zone in overall rankings and excellent performance in the recovery Jaipur campaign and Small Savings Scheme. He also The Zonal Committee Meeting was held on 29th expressed his concerns over the degrowth of December, 2019 at Currency Chest – Jaipur. The branches over March 2019 in many branches. meeting presided over by the Zonal Chairman, Sri Manjunathaswamy, Zonal Head, in his Somant Tak, was called to order at 10 am. After address said that due to the whole hearted support the welcome address by Rakesh Kumar Meena, of all officers, the zone secured second rank and Zonal Secretary, discussions on the agenda was congratulated CBOO and its members. He also taken up. The following points were discussed in expressed concern over non-participation of some the meeting:- branches in various campaigns and not opening of accounts despite repeated reminders, with Bank 1. Issues discussed at the recent EC meeting held branches which are having Currency Chest that at Belgaum. would enable them to dispose off the excess cash. 2. As per the decision of EC, all area secretaries were advised to take steps for submission Responding, Venkideswaran, Zonal Secretary, of ‘Memorandum to District Collector’ at the requested the Management to expedite the decision earliest. making process and said that many suggestions given by CBOO for improvement in business in the 3. It was decided to hold a Dharana in front of earlier meetings were not taken care of properly Zonal office, to protest against proposed merger. and requested that branches should be adequately 4. Preparations for the ensuing members’ meet supported for clearing the backlog of obtention of scheduled on 26th January, 2020. AODs, submission of Staff Lapses Report etc. He said that the request for flood loans to members 5. On the Transfer Process – 2020, all area who were affected by the natural calamity in 2019 secretaries were requested to prepare list of was not escalated to higher authorities in time. officers who have completed three years ina branch and submit the list as early as possible He also requested the management to issue so that consolidated list can be sent to Central clarification on stamp duty on mortgages, on Office. obtention of AODs from NRI borrowers and on RR filed accounts. He also said that when house-keeping 6. The Area Secretaries were requested to identify is the need of the hour, the numerous campaigns suitable project for Swasti activity. are stumbling blocks. The need for immediate 7. Staff Shortage at branches refurnishing of Angamally and Poothotta branches Out of 18 Zonal Committee Members, 10 attended was also brought to the notice of the Management. and the meeting concluded with vote of thanks by He concluded by requesting the management to Rajeev Saxena, Area Secretary, Jaipur ensure that supply of wall calendars to branches is made well in time. - Rakesh Kumar Meena, Zonal Secretary

I am a citizen, not of Athens or Greece, but of the world. - Socrates Officers’ Voice, February 2020 6

can only be one team that can be lift the winner’s sports activity trophy, but all teams have to display sportsman spirit as it is the Game that is the winner, he Mangaluru said.

Head Office and Mangaluru units jointly He requested all players to ensure smooth sailing organised a cricket tournament “Kochikar of the event and hoped, this will continue in the Radhakrishna Pai Memorial Trophy – Season-3” years to come as a permanent feature. He also for Corp Bankers in memory of Late Sri. Kochikar gave the details about the present scenario with Radhakrishna Pai, our founder General Secretary regard to our fight against the merger of our on 28th and 29th December, 2019 at Canara bank and encouraged the participants to actively Engineering College Ground, Benjanapadavu, participate in all agitation activities against the Mangaluru. Functionaries from both the Zones merger of our bank. and Central Office-bearers were present. A total of 11 teams from Head Office, Mangaluru and Udupi Zones had registered and participated in the tournament. While the league matches were held on round robin basis on 28th December, Semifinals and Finals was held on 29th December. More than 150 players from Corp Bank had participated in the tournament. In a hard fought final, Corp Bytes, Mangalore team defeated Udupi Tigers team to become the Champions.

During the presentation Ceremony, President in his address, congratulated all the players for playing in right spirit and thus contributing to Winners the success of the tournament. He also expressed his happiness over 11 teams registering for the tournament. Later the Winner’s Trophy, Runner’s Trophy, Man of the Match for Finals, Best Bowler, Best Batsman and Man of the Series awards were given by the President and other Central Office Bearers.

Functionaries from both the Zonal units – especially the younger members - had actively participated in the successful conduct of the event. Prakash Naika B, Zonal Secretary, HO Unit made all arrangements for smooth conduct of the tournament and Nitin Runners Kumar, Deputy General Secretary co-ordinated the activities. While inaugurating the tournament, President, - B Prakash Nayaka, Zonal Secretary, HO Unit & Y Sudhindra congratulated both the units for Vikram Nayak, Zonal Secretary, organizing such a programme for the third time Mangalore which helps all members to come together. There

We always have time enough, if we will but use it aright. - Goethe Officers’ Voice, February 2020 7

Chandigarh Kochi

A 12 overs a side “Winter Heat Cricket Tournament CBOO-Kochi Unit participated in Interbank - 2020” was held on 05.01.2020 at Govt Model Fives Football Tournament conducted by AIBOC, Senior Secondary School Grounds at Sector - 27, Calicut District Committee on 19th January Chandigarh for all the staff members working in 2020 in connection with the AIBOC Kerala State the Zone. Staff working as far as 250 KMs away Conference to be held on 15th and 16th of February from Chandigarh enthusiastically participated in at Trivandrum. the tournament

In total there was 4 teams and team Zonal Office took A total of eight teams viz Corporation Bank, away the winner’s trophy beating team Narwana- Syndicate Bank, South Indian Bank, State Bank of Hissar. While Pradeep won man of the match for India, Punjab National Bank, Federal Bank, Union 1st match Umesh Kasana and Piyara Singh were the Bank of India and Indian Bank, participated in the other Man of the Match winners. Pradeep was also tournament. adjudged Man of the series for scoring highest runs While State Bank of India team were the winners, in the tournament which included two consecutive Union Bank team were the runners up. CBOO half centuries. team won two games, however, on the basis of goal In all 47 players participated in the event that was difference they couldn’t enter the semifinals. CBOO inaugurated by Sri Ved Prakash Sharma, Deputy Team line up included Nithin B Lal, Krishnadas A, Zonal Head, who also gave away the prizes. Sidharth S, Preman N C, Rahul P G and Jibin C J.

- Naveen Chandra, Zonal Secretary - Venkideswaran, Zonal Secretary

donation to swasti

We gratefully acknowledge the gesture of goodwill by the following members / well wishers of CBOO and thank them for their donation to Swasti.

Name of the Donor Amount [Rs]

Suresha B, Deputy General Manager [Retd], HO-IAD 10,003.00

Rajendra G. Hegde [Retd], Sirsi 1,000.00

The ballot is stronger than the bullet - Abraham Lincoln Officers’ Voice, February 2020 8

obituary

Sanjay Bhau Hile - out of our sight but NOT from our Heart

In the early hours of 1st December, 2019, CBOO promotion only in June, 2018 to become Manager lost one of its finest torch bearers, Sanjay Bhau in MMG Scale-II. Hile, Circle Secretary, Mumbai to the cruel fate of During his 31 years of service he worked at Mumbai - nature after a brief illness. A humble, kind hearted Fort, Mandvi, Nariman Point, Bhavanagar, Mumbai and honest human being, Shri. Sanjay Hile always - A R Street, LIC Hub and Mahanagar Palika. Sanjay helped people to the best of his ability. He had the was elected to the 19th Executive Committee as courage to fight for the betterment of the members Zonal Secretary, Greater Mumbai for the Triennial and was actively involved in Social causes and period 2013 to 2016 and he was elected to the welfare activities. He also actively involved in other 20th Executive Committee as Circle Secretary, social service activities such as Mass Marriage for Mumbai for the period 2016 to 2019 and he was poor and needy class of society in his personal re-elected as Circle Secretary for the current [21st] capacity. Executive Committee also. Shri. Sanjay Hile, born on 27th July, 1967 hailed He is survived by Smt Ratna S Hile, Wife working in The from a small village Gondoshi in Ahmednagar New India Assurance Company Ltd., and daughter, district of Maharashtra. He joined the Bank on Kum Prajakta Hile, student. 08.11.1988 at Mumbai - Kalbadevi branch. He was promoted to Officers' cadre JMG-Scale-I in Shri. Hile will forever be remembered for his February, 1998 and continued in the same scale selfless work. CBOO dips its banner in honour of to be available for the Organisational work. He took our departed leader.

Other Members:

Name of the Member Branch Last Worked Date of Death

Sangita Suresh Kumbhar Pune - Pimpri Chinchwad 06.12.2019

CBOO while conveying its condolences to the members of their brieved family dips its banner as a mark of respect and prays God to rest the departed souls in eternal peace.

Colours speaks all languages. - Addison: The Spectator Officers’ Voice, February 2020 9

for the officers’ fraternity in Bank of India through aiboc news his exceptional negotiating skills. His oratory skills has made him one of the most sought after speakers Text of AIBOC Circular No. 2020/02 dated in any meeting and seminar in the country. 01.01.2020 Comrade Sunil Kumar was elected in the Executive To All Affiliates (Please Circulate) Committee of AIBOC in June 2004 and was elevated to Deputy General Secretary in January 2011, Vice COMRADE SUNIL KUMAR TAKES OVER President in 2012 and Sr. Vice President from the AS PRESIDENT OF AIBOC Jaipur Conference in March 2017 and Chairman th We are delighted to inform you that in the 92nd from 28 November 2018. He was also the President Executive Committee Meeting of All India Bank of AIBOC Bihar State Unit from 2004 to 2012. Officers’ Confederation (AIBOC) held in Delhi on Comrade Sunil Kumar’s co-option as President of the 26th and 27th December 2019, Comrade Sunil Confederation will definitely strengthen our resolute Kumar, Chairman and General Secretary of determination to carry on our ongoing struggle FBOIOA was unanimously co-opted as President of against merger, wage revision talks, ensuring the Confederation following superannuation of Com proper work-life balance and meeting the challenges Debasis Ghosh. to continue the legacy of the movement. He played his role as Chairman of this premier organisation Comrade Sunil Kumar, a Masters in Geology, joined AIBOC with perfection and coordinated with both Bank of India as a DRO on 16.01.1984. He is also President and the undersigned to form a formidable a Certified Associate of Indian Institute of Bankers. team that strengthened the Confederation. He will He was drawn to the mighty Federation of Bank of definitely be playing a significant role in the ongoing India Officers’ Association ever since he joined the wage revision talks. Bank and was co-opted as Executive Committee The undersigned is confident that AIBOC will Member of erstwhile Muzzafarpur Regional Council emerge more militant, cohesive, and determined of the Association in the year 1987. He served the to serve the membership drawing from the rich organisation as an Executive Committee Member repository of experience of Comrade Sunil Kumar. for 14 long years before assuming the charge of Regional Secretary of Muzzafarpur Region on With vibrant greetings, 18.01.2001. Comradely yours,

After the amalgamation of Regional Offices, following Sd/- organisational restructuring in Bank of India, he got Soumya Datta elected as Deputy General Secretary of the Bihar General Secretary Unit of FBOIOA in 2002 and it’s General Secretary from 01.02.2004. In recognition of his contribution Text of AIBOC Circular No. 2020/03 dated to the Trade Union movement and unparalleled 10.01.2020 organisational skill, he was elected as Deputy To All Affiliates (Please Circulate) General Secretary of the Federation in 2004. His vision, acumen, deep understanding of the issues Dear Comrade, and compassion for the membership ensured his Memorandum to Hon’ble Finance Minister election as Joint General Secretary of FBOIOA seeking exemption of entire Leave Encashment in 2007, Vice President in 2010 and President in amount from deduction of Income Tax 2012. He became the General Secretary of FBOIOA after laying down of office by Comrade Harvinder We have sent a communiqué to the Hon’ble Finance Singh and has been leading the mighty Federation Minister, Govt of India seeking exemption of entire which has such a glorious and unmatched legacy of Leave Encashment amount from deduction of contribution in the movement of the Bank Officers’ Income Tax at the time of retirement of bank officers in the country. He has achieved significant benefits and employees. Text of the letter is appended.

An ounce of act is worth a ton of arguments. Officers’ Voice, February 2020 10

With greetings, amendment to the aforesaid Section 10 [10AA(ii)] Sd/- of the Income Tax Act, 1961 and extend complete (Soumya Datta) exemption on the amount receivable by such bank General Secretary men as cash equivalent of leave salary at the time of retirement, without any upper ceiling, so as to Text of Letter No. AIBOC/2020/02 dated have uniformity in approach and equity among the 10.01.2020 retiring employees of various government / public Ref No. AIBOC/2020/02 sectors including the banks. Date: 10.01.2020 At the end, we request your good office to give sympathetic consideration to this justified and Smt Nirmala Sitharaman legitimate demand and extend the income tax Hon’ble Union Minister of Finance exemption on retirement benefit of encashment of Government of India leave without any cap, which will be of great financial Respected Madam, help to the retiring bank employees and officers. Memorandum seeking exemption of entire Leave With best regards, Encashment amount from deduction of Income Yours sincerely, Tax Sd/- Greetings from All India Bank Officers’ Confederation (Soumya Datta) (AIBOC) representing over 3,20,000 officers of the General Secretary banking industry in India. Text of AIBOC Circular No. 2020/04 dated 02. Madam, we invite your kind attention to the Leave 13.01.2020 Encashment Rules applicable to the Central and the State Government employees. The rules enable all To All Affiliates (Please Circulate) the employees of Central and State Governments to Dear Comrade, encash their accumulated Earned Leave subject to a cap of 300 days on superannuation. We also draw TALKS WITH IBA ON 13.01.2020 your kind attention to the provisions of Section 10 We reproduce hereunder the text of UFBU Circular [10AA(i)] of Income Tax Act, 1961 (as amended upto No.2020/01 dated 13.01.2020 on the captioned date) providing for complete exemption of income subject for your information. All affiliates are tax on any amount received as cash equivalent of hereby advised to be in full preparedness for the leave salary at the time of retirement. agitational programmes including strike action 03. However, the above facility of allowing exemption which would be circulated shortly. of tax is not extended to the retiring bank employees With greetings, who are covered under Section 10 [10AA(ii)] of the Sd/- Income Tax Act, 1961 (as amended upto date) (Soumya Datta) restricting it upto a maximum of ? 3,00,000/- only. General Secretary Further, the bank employees are eligible to encash their accrued Privilege Leave up to a maximum Text of UFBU Circular No. UFBU/2020/01 dated of 240 days only at the time of superannuation. 13.01.2020 Incidentally, the limit was fixed way back in 1998. CIRCULAR No. UFBU/2020/01 04. We have, for quite a long time, been representing Date: 13.01.2020 to the Indian Banks’ Association and also the TO ALL CONSTITUENT UNIONS/MEMBERS Department of Financial Services, Ministry of Dear Comrades, Finance to remove the above mentioned anomaly prevalent in case of bank employees and officers. Bipartite Talks with IBA today We, therefore, request you to kindly bring an Another round of bipartite talks was held today

Before the holy sage’s rage, Ev’n Indra’s empire meets damage - Thirukkural Officers’ Voice, February 2020 11 in Mumbai. IBA team was led by Shri Rajnish After mutual discussion amongst our constituent Kumar, (Chairman, SBI), Chairman of IBA. We unions, we expressed our inability to accept their were represented by all our constituent unions. offer. Thereafter, meeting of UFBU was held and Continuing the talks held on 5-12-2019, IBA decisions were taken to launch agitations and Chairman narrated the general scenario in the strike actions. Separate Circular is being issued in banking sector and the constraints under which this regard. all of us were working, particularly in the Public With greetings, Sector Banks. He pointed out that our demands for Yours comradely, wage revision will have to be resolved keeping these Sd/- constraints in mind to keep the competitive edge. SANJEEV K. BANDLISH He also stressed on the job security available in CONVENOR PSBs which cannot be overlooked while discussing the remuneration package. With this preface, IBA Text of AIBOC Circular No. 2020/05 dated stated that it was difficult to improve their earlier 14.01.2020 offer and that the distribution will have to be within To All Affiliates (Please Circulate) the overall quantum offered. IBA also explained their revised offer on PLI. Further IBA also offered Dear Comrade, encashment of 5 days PL every year in lieu of our LETTER TO DFS DEMANDING REVIEW OF demand for increasing the PL encashment at the MERGERS AND ACQUISITIONS IN PSBs time of retirement. IBA informed that they were We have sent a communiqué on 13.01.2020 to not ready to accept our demand for 5 days banking. the Secretary, Department of Financial Services, On our not accepting their offer, after discussion, Govt of India demanding a review of the decision of IBA offered as under: mergers and acquisitions in Public Sector Banks. Text of the letter is appended Wage revision: 12.25 % with 2% loading With greetings, Merger of Special Allowance: not possible due to cost implications (Soumya Datta) General Secretary Revised PLI Offer: Text of Letter No. AIBOC/2020/03 dated Increase in Operating No. of days As % 14.01.2020 Profit (Y to Y) of PLI Ref No. AIBOC/2020/03 5% to 10% 10 days 2.75 10% to 15% 14 days 3.84 Date: 13.01.2020 15% 21 Days 5.75 The Secretary Department of Financial Services In Banks, which will not register net profit but Government of India, North Block increase operating profit more than 5%, the PLI will New Delhi - 110 001 be limited to 10 days/2.75 %. Dear Sir, Encashment of Leave during service: 5 days PL per year (in addition to encashment at the time of Mergers and Acquisition in public sector banks LFC). For employees with less than 5 years service: Greetings from All India Bank Officers’ Confederation 7 days encashment per year. (AIBOC), the apex body of the Bank Officers’ trade Improvement in Family Pension: IBA is already union with over 3,20,000 members, which is the seized of the issue. largest trade union of supervisory cadre employees Updation of pension: Cost needs to be worked out in the country and has been playing a pivotal and thereafter the issue would be addressed. role in the banking space of the country. Besides

A clear conscience begins with a poor memory. - H L Mencken Officers’ Voice, February 2020 12 being major stakeholders in the functioning of the proposal emanated from ‘Alternative Mechanism’ of banking industry, our members are partners-in- Ministry instead of being recommended by Boards progress of each and every banking institution. of the said three banks. Similarly, the recent We are also connected to aware of the basic socio- announcement of merger of 10 PSBs into 4 was economic issues across the globe. also from Ministry of Finance (and not a decision of the individual banks’ boards). 2. We have been repeatedly stressing the point that the mergers and acquisitions of public sector b. We observe that the process of ‘top-down model’ banks are not in the interest of any stake holder – is being resorted to. PSBs are treated differently be it banks or customers or employees and officers, and indifferently for various purposes. It would be or the common citize While our views have been in the fitness of things to allow banks to take its substantiated by events unfolding, it appears considered, evaluated decision to choose whether that they have been ignored. Instead of engaging M&A is beneficial to the entities concerned. It is a in a discussion to share and analyse our views, commonly held and accepted position that board of the Government first went ahead unilaterally, directors is the highest and competent authority in announcing amalgamation three public sector any organisation and not its owner (in this case, the banks – Vijaya Bank, Dena Bank and Bank of Government). The owner shall exercise any powers Baroda on 17.09.2018. Even as we registered only through Board of the bank and not by extra- our protests and continued our sustained efforts constitutional and arm-twisting instructions. In to drive home that M&A look good only on paper case of PSBs, reverse engineering has been taking and presentations, rather than at the ground level, place. First Government announces suo motu, further mergers were declared involving that of 10 and every other process is engineered to suit the PSBs into 4 big banks on 30.08.2019. announcement of Government. Boards have lost their independence apparently and are made to 3. We stand firm on our considered opinion and obey the diktat of the government. Further, no reiterate that these mergers / amalgamations are bank board had any representative either from detrimental to the society at large and at the same officers or workmen, when critical decisions such time will have Even at the cost of repetition, we, as as merger / amalgamation are being endorsed by a responsible trade union, think that we are duty an ‘incomplete’ board. It is also being ensured that bound to highlight the following aspects for your such decisions are taken ‘unanimously’ without consideration: even any note of dissent/ comments. a. The process of mergers, apparently and visibly, c. Unlike PSBs, their private sector counterparts is not in accordance with the laws framed from are not being imposed any decision of merger / time to time. During August, 2017, Union Cabinet amalgamation and such being the case and given had accorded in banks through an Alternative their existing skill in catering to some of the niche Mechanism (AM) with a view to sector space to meet sectors / public, the smaller size private sector the credit needs of a growing economy, absorbing banks would certainly take away the businesses of shocks and having the capacity to raise resources smaller acquiree banks in a big way. without depending unduly on the state exchequer. A few salient features of the Cabinet Framework d. Even though the plan for merger / amalgamation for Consolidation of the PSBs were: (1) the decision has been a hanging sword for the Banking regarding creating strong and competitive Banks industry, the announcement nevertheless, came as would be solely based on commercial considerations; a surprise. This is because, even as on the 31st (2) the proposal must start from the Boards of August 2018, answering a question (un-starred Banks and (3) the proposals received from Banks question no: 1482) regarding plans for mergers, the for in-principle approval to formulate schemes of then Minister of State for Finance answered that amalgamation shall be placed before the Alternative there was currently no proposal in the Alternative Mechanism (AM). In case of BoB-Dena-Vijaya, Mechanism for consideration. If this be the case,

We couldn’t conceive of a miracle if none had ever happened. - Libbie Fudim Officers’ Voice, February 2020 13 then what changed in the matter within a period cover all aspects of the banking business in the of a fortnight that forced the Central government merged entity will be a major challenge that can to come up with its first of its kind of a suo motu stretch out for a very long time. Banks involved announcement? would obviously have to do fire fighting for the next few years in order to integrate people, processes e. Our country has its uniqueness in diversity. We and procedures, relegating basic banking activities have cosmopolitan cities as well as the remotest to the backstage. At the end of the day, Government corners which are devoid of the basic amenities will be driving the customers of its own arm i.e. viz. water, electricity and roads, let alone banking. the PSBs to the private sector bankers!! There Country needs variety of models of banking are apprehensions that the amalgamation may institutions, suiting the needs of citizenry – from pose cyber security risks as expressed by Shri G. banks financing exports, PSBs, cooperative banks, Padmanabhan, Former Executive Director of RBI payment banks, niche banks to MFIs, SHGs etc. recently. The banking sector, especially public sector banks, has been the driver of growth for the economy in h. History of M&A in banking should be an eye our country. Therefore, in our considered opinion opener: Post banking reforms, there have been such highhanded and arbitrary decision, which 32 mergers, all of them of private banks with the defies logic and reason, will surely be catastrophic public sector banks. In 1993, however, RBI forced to the economy as a whole. a merger between Punjab National Bank (PNB) and New Bank of India, as the latter had low liquidity f. It appears that Government is pushing merger of rate. PNB suffered a net loss of Rs.96 crore in 1996, PSBs with an apparent misplaced notion that fewer following the merger. It had to face several problems stronger banks will be ‘Too Big to Fail’. As bankers, and litigations relating to absorbing the staff of New we recall that the announcement of the first three Bank of India in its stream. It reportedly took PNB way merger in public sector space came barely five years and more to get over the merger effect. A two days after the 10th anniversary of the largest similar fate was met by Oriental Bank of Commerce bankruptcy filing in the banking history by Lehman when Global Trust Bank (a widely cosseted new Brothers, which was the fourth largest investment generation private sector bank) had to be merged bank of United States! This makes one seriously with the former in 2004. wonder if we ever learn any lessons at all from the infamous Global Financial Crisis of 2008! In the i. The merger of SBI and its associates in FY’17 aftermath of the Crisis, prominent economists had also witnessed similar disruptions. It did not in fact prescribed a move towards smaller banks. bring any apparent value addition to either SBI (acquirer) or the Associates (acquirees) or to their Sir, there are umpteen number of examples world huge workforce. Immediately after the merger, the over, where high profile mergers / amalgamations total NPA of the merged entity shot up by Rs.48,000 which attempted to derive the best out of the so crore as on 31st March 2018 in just one year from called ‘synergy’, have drastically failed. New York what it was as on the date of merger (01st April Central and Pennsylvania Railroad, Quaker Oats 2017). The growth in business decreased to 4.78% and Snapple, Skype and eBay are only a few from as at the end of March, 2018 compared to 9.70% the many examples that can be found in this regard. as at 31.03.2017 and 9.25% as at 31st March, g. Several case studies have shown that merger 2016, whereas the GNPA of the SBI increased announcements trigger displacement, confusion, to 10.91% as at 31st March, 2018 compared to anxiety and insecurity in staff, once again in turn 9.11% as at the end of March, 2017 and 6.44% as leading to slowdown in business. Further, there is at 31.03.2016. Also, SBI’s operating profit came no compatibility in technology architecture in PSBs, down drastically, not to mention the first ever loss with each bank having engaged multiple vendors in over a decade after accounting for provisions. for developing systems. To forge uniformity and There have been numerous instances where there implement a common system that would seamlessly was huge flight of business post-merger on account

Work first and then rest.- John Rusking Officers’ Voice, February 2020 14 of chaos caused by various ‘disruptions’ as well as sector banks arising out of previous workmen & the sense of loss of identity. As per Bloomberg, the officers’ nominee directors have not been filled in State Bank merger also resulted in closing down of despite our protracted correspondence, appeals 1,805 branches, fall in staff count by 15,762 due and even directions by judiciary. to retirement (including VRS) despite new addition Thus, taking the views of the employees of PSBs of 3,211 branches and administrative hassles even that are going to be amalgamated, has never though this merger was within SBI group, where happened, which is not in tune with the provisions natural synergies were far more than that prevalent of the Bank Nationalisation Act, 1970/1980. in case of the ten banks, which have been identified for merger now. l. It is a hard truth that M&A in banking is by itself an anti-thesis to Bank Nationalisation. The pious The amalgamation of the Bank of Baroda, Vijaya objective of spreading banking facility to masses Bank and Dena Bank has resulted into various gets defeated, as M&A reduces number of banks complications since these banks had no history of and branches in the garb of rationalisation of sharing business platform and commonality in any bank branches. Thousands of branches across the aspect – be it technical, culture of work, geography country have been / are being closed as obvious or the business mix. The outcomes are likely to fallout of the recent bank mergers. If M&As are be: lower operating profits, higher provisioning continued, banking-next-door shall become a coverage ratio and NPA accumulation, which will mirage for millions and millions in this country. outweigh any efficiency gain that has been projected. While there are umpteen number of banks ready to Moreover, cost-cutting measures through staff and serve the riches, it is only PSBs who serve the poor, branch rationalisation will be severely detrimental downtrodden, under privileged, farmers, SHGs, to the interests of the employees and will vitiate the women, working class and the rural, semi-urban industry climate. Moreover, it will have a major and urban population, which are not preferred to impact on the customer base of each bank. We be served by elite new age private banks. should not forget that the customers have strong loyalty towards their banks and any impairment 4. The banking in public sector space can be would do more harm than good to both banks improved a lot by way of dedicated move towards and its customers. Further, the HR issues that initiation of the following steps: have cropped up following the merger have caused a. Framing of appropriate norms and improving deep angst and frustration amongst the officers’ infrastructure: For the present status, PSBs are not fraternity belonging to E-Vijaya and E-Dena Bank. alone to be blamed. To say a few: private bankers did not finance infrastructure; PSBs handle less j. As per Section 9 (2) (c) of the Banking Companies profitable business of lower segments of society Acquisition & Transfer of Undertakings Act, and activities alien to banking; banks have divided 1970/1980, Government, in consultation with and fragmented attention and eventually evolved RBI, may make a Scheme for reconstitution and faulty lending policies; illogical NPA norms have amalgamation of any PSU bank with any other been forced upon – such as imposition of Asset bank. Here, consultation with RBI is mandatory. Quality Review etc. In the guise of cleansing Government has never disclosed the views of RBI balance sheet, Insolvency and Bankruptcy Code with regard to BoB-Dena-Vijaya amalgamation (IBC) was brought in, which in turn resulted in the or the recent merger of 10 PSBs into 4 to public forced haircuts, reducing the bottom line as well at large. Hence, the decision is in violation of the as top line of the public sector banks. There is a above Section. need to frame and implement laws that criminalise k. As per Banking Companies (Acquisition & wilful default, frame industry specific NPA norms Transfer of Undertaking) Act, 1970/1980 as well as and bring out adequate infrastructure / knowledge State Bank of India Act, appointment of directors base to handle the banking business – deposits as from workmen and non-workmen employees is well as advances. M&A will not address any of the mandatory so as to protect the interest of employees. above issues. It would be pertinent to mention here that very b. Augmenting human resources in PSBs: The conspicuously, vacancies in the boards of the public mother of all ills plaguing the banking sector Officers’ Voice, February 2020 15 today is inadequate human resources in Banks. Government to reconsider the M&A initiatives Recruitment occurred, on substantial scale, in and instead launch a comprehensive overhauling 1980s. Thereafter it was only in trickles. Personnel of the entire stressed assets recovery mechanism, recruited in 1980s are gradually retiring now. including: Knowledge bank is getting depleted. Unless there a. Ensuring immediate and strict penal is an immediate recruitment on large scale, the action against corporate fraudsters and wilful capacity building cannot take place, which worsens defaulters. the situation. b. Publishing and making the list of corporate c. Making banking industry attractive to grab and defaulters’ public. retain talent: Banks are saddled with non-banking activities. Perhaps, we are the only nation where c. Making the IBC process more transparent and bank does umpteen number of activities, in addition effective in order to recover NPAs and stopping to banking – from Aadhar seeding to implementation huge haircuts for the public sector banks. of social security schemes. Many transactions in d. Strengthening the public sector banks through banks are unremunerative and paid lesser than recapitalization and implementation of the the cost of conducting such transactions. Bank approved Turnaround Plans, without hampering employees have carried out all these activities normal banking operations through unreasonable with full commitment and zeal, more particularly, restrictions under such as Prompt Corrective as and when calls have been given by the Central Action (PCA). Government. Growing discontent and lack of job e. Augmenting human resources to keep the satisfaction coupled with incommensurate pay knowledge bank sustaining and growing. and perquisites have been causing increasing attrition rate among the young bankers. All such To sum up, mergers are not in the interest of any. factors need to be looked into so that the PSBs stay It does not make Indian banking industry strong profitable and continue their contribution towards and resilient. It appears to be more of a confused nation building. reaction based on misplaced assumptions. The challenges faced by the banking sector need a 5. Today’s need of the hour is to learn from the holistic approach to identify, isolate and cleanse mergers / amalgamations of the past – in our the whole system as well as individual banks. What country as well as across the world. It would be is being thought to be the panacea has turned out prudent to have ‘Good Banks’ than ‘Big Banks’. to be just an arbitrary decision which will only Mergers cannot resolve or clean up the balance aggravate the situation beyond control, possibly to sheets; rather the NPAs of the merged entities would a tragic meltdown. PSBs are the temples of modern simply add up. The improvement in certain ratios, India. They have contributed majorly to build the if any, is tantamount to mere financial engineering country and its economy to such heights. They or window dressing, without resolving the crux of are the major engine to realise the dream of $5 the problem or addressing the fundamentals. Trillion economy, if nurtured well. We, therefore, 6. As a responsible organisation of the bank officers’ fervently appeal before your good office to review community, it is our bounden duty to bring to your the regressive decision of the recent mergers and attention, time and again, the ill effects of M&A. Sir, rescind it in the best interest of the country and its we strongly believe that the bank managements, people. associations and unions have the inherent and With best regards, collective strength to rejuvenate the public sector banks and restore their financial health in the Yours sincerely, interest of our overall economic growth and Sd/- development. (Soumya Datta) 7. In this backdrop, the AIBOC urges upon the General Secretary Officers’ Voice, February 2020 16

case, which will give the country’s largest lender a banking round up fillip of Rs 12,161 crore. The sale of Essar Steel to the Arcelor Mittal -Nippon Steel consortium for Rs SBI under-reported bad loans by Rs 11,932 crore 42,000 crore, the largest transaction through the in FY19 three-year-old Insolvency and Bankruptcy Code Public sector lender, State Bank of India (SBI) (IBC), was completed last week. under-reported its non-performing assets for the Kumar said the resolution of Alok Industries and fiscal year FY19, a risk-assessment report of the Bhushan Power and Steel – where SBI is expected Reserve Bank of India has found. In a regulatory to recover Rs 1,700 crore and Rs 4,000 crore, filing on Tuesday, the bank said it had under- respectively – was close to completion. “Bhushan reported its bad debts by Rs 11,932 crore. The Power and Steel and Alok Industries, I consider divergence in gross non-performing assets (NPAs) very close to resolution,” he said on the side-lines assessed by the central bank for SBI was Rs 11,932 of an IBC event in New Delhi. The bank is also crore in FY19. Similarly, the divergence assessed expected to get Rs 800 crore from the resolution of by the RBI in net NPAs was Rs 11,932 crore for Ruchi Soya. FY19. While JSW Steel is looking to acquire Bhushan Also, the RBI found that SBI had made less Power and Steel, Reliance Industries is said to be provisions for its bad loans in FY19. The divergence in talks with banks for funding the buyout of debt- found in provisions for bad loans in FY19 was to the ridden textile manufacturer Alok Industries. tune of Rs 12,036 crore. Based on the divergence The top boss of SBI said that while liquidation assessed by the RBI in provisioning for bad loans, under IBC should be avoided, small and medium SBI said it would have reported a net loss of Rs 6,968 enterprises required different treatment. IBC crore in FY19 as opposed to a profit of Rs 862 crore. should be used for larger companies, where loans The bank said, it reported gross non-performing are high. “SMEs have to be treated differently… assets to the Rs 1.72 trillion and according to IBC should be used for where the amounts are RBI’s assessment; the bank had gross NPAs of Rs bigger and multiplicity of lenders is there,” Kumar 1.84 trillion. Similarly, it reported a net NPA of Rs said. However, he added that a change in legislation 65,895 crore but RBI’s assessment showed its net was not required. NPAs are 77,827 crore. And provisions made by the bank in FY19 was Rs 1.06 trillion but it was The government introduced a bill to amend the needed to provide Rs 1.18 trillion. IBC in the winter session of Parliament. The bill proposes to bar government agencies from attaching SBI also said post the divergence assessed by the the assets of a corporate debtor undergoing RBI in its bad loan book, the net impact on the bankruptcy resolution for prior offences, making gross NPAs in Q3FY20 will be Rs 3,143 crore and such stressed assets more attractive to potential on the net NPAs will be Rs 687 crore. Also, the buyers. bank will have to make extra provisions to the tune of Rs 4,654 crore in Q3FY20. Recently, the Further, no attachment, seizure, retention or market regulator made it mandatory for listed confiscation of property of the corporate debtor can banks to disclose bad loan divergence within a day take place in relation to an offence committed prior of receiving the risk assessment report from the to the commencement of the corporate insolvency RBI. Despite the divergence reported, the stock of resolution process where the property is covered the bank is marginally down. It was trading at Rs under a resolution plan approved. 316.10, down 0.21 per cent. - The Economic Times, 17/12/2019 - Business Standard, 11/12/2019 RBI looking to harmonise provisioning by all Essar Resolution likely to Boost Q3 Profit: SBI banks Chief In a move that will ensure that all banks present State Bank of India, Chairman, Rajnish Kumar an accurate picture of stress on their books and expects profit in the third quarter to get a boost adequately provide for it, the Reserve Bank of from the resolution of the Essar Steel insolvency India is looking to harmonise provisioning done Officers’ Voice, February 2020 17 by banks. The central bank is doing this so that if Senior Analyst-BFSI, IndiaNivesh said, “A recent an account is stressed for one bank, then all other example can be of IL&FS where loans in certain banks with exposure to that entity should declare road construction SPVs were performing, some it as a non performing asset (NPA). RBI has given other stressed but not yet NPAs, while the parent the task to a special supervisory cadre to monitor had defaulted. Secondly, status of borrowers with information coming from all banks, sources told banks has varied as loans were being serviced FE. This cadre was formed in May for supervisory with one bank but in default with another leading and control of commercial banks. to disharmony in asset classification although individual banks would have been in compliance “The SSM (senior supervisory manager) will with RBI’s IRAC norms.” constantly engage with banks on the various information received on accounts. RBI is aggregating Speaking on the need of harmonisation of data via Central Repository of Information on Large provisioning, Syndicate Bank MD & CEO, Credits (CRILC),” a person familiar with the matter Mahapatra said that in an information transparent said. In India, banks follow rule-based provisioning, world, no company should be taking advantage of while in some developed markets, requirement- information arbitrage. The divergences are reported based provisioning is followed. on basis of regulatory opinion. “It is not just based Speaking to FE, Mrutyunjay Mahapatra, MD & on the conduct of account but based on regulator’s CEO, Syndicate Bank said, “In a multiple banking view of the whole system,” Mahapatra said. arrangement, an account which is stressed in State Bank of India (SBI) on December 10 posted one bank may not be stressed in other bank. It a staggering loss of Rs. 6,968 crore in FY19 and happened in the case of DHFL, Religare Finvest not a net profit of Rs. 862 crore as it had reported and even smaller accounts. So, RBI is trying to earlier. The lender said the Reserve Bank of India harmonise provisioning to take a view that company had spotted a large divergence of Rs. 11,932 crore is stressed and everyone should declare it as NPA.” in its gross non-performing assets.

The reason behind harmonising of provisioning is Other public sector lenders that reported due to divergence in the asset quality of big banks divergences in past one month include Union and alleged lapses on part of auditors, said another Bank of India, Indian Bank, Bank of India, Indian source. Many banks have reported divergence, Overseas Bank, Central Bank of India, while Yes following a recent directive by the Securities and Bank and Lakshmi Vilas Bank are among private Exchanges Board of India (SEBI), due to which lenders. listed banks are required to make disclosures of divergences and provisioning beyond specified - Financial Express, 18/12/2019 threshold not later than 24 hours upon receipt of IBA to unveil framework to address consortium the RBI’s Final Risk Assessment Report rather than lending issues waiting to publish them as part of annual financial statements. The Indian Banks’ Association (IBA), headed by SBI Chairman, Rajnish Kumar, will come out with a RBI is often criticised that it does not have framework around April to address issues related supervisory oversight. The regulator will now try with consortium lending to industry and finding to see whether any kind of dissimilarity is there in solution for alternate sources of borrowing for them. the system and if at all promoter groups postpone payments for a longer time when they are in Industry faces problem, particularly in consortium trouble. This happens because some banks are and multiple lending and if even a small NOC (no accommodating than others. objection certificate) is required, the borrower keeps Analysts believe harmonising of provisioning is going around the banks, so it may take six months going to be a tough task for regulator, given the or one year or even one-and-a-half years to get the complex situation of bad loans. Ravikant Bhat, funding, Kumar said at an industry event. “And the

We must use time as a tool, not as a couch. - J F Kennedy Officers’ Voice, February 2020 18

NOC may come or may not come and all your (industry under section 8 (1) (a) and 8 (1) (f) of the Right to borrower) plan goes for a toss. So, there has to be a Information (RTI) Act,” it said in response to the RTI system in the decision making where these decisions application filed by this PTI journalist. The section 8 can be taken on time,” he said while speaking at the (1) (a) bars disclosure of information “which would FICCI Annual Convention here on Saturday. prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific or economic To address these issues, there are two things which interests of the State, relation with foreign State or are happening, one is at the IBA level and another lead to incitement of an offence”. The other section by RBI to develop secondary market for loan to exempts disclosure of “information received in corporates. “I have decided to set up a working confidence from foreign government”. group that will examine all these issues around consortium and multiple banking lending and see The ministry was asked to provide the details of to it that standardisation happens and it becomes information received from Switzerland related to hassle free as far as the borrowers are concerned,” accounts of Indians in banks there. It was also Kumar said. asked to provide the details of information received from foreign countries on black money, including “We will try to make an arrangement that if there details of such cases shared with India. India had are some dissenting lenders, how we can give them in September got the first set of Swiss bank account exit (from consortium of lenders), all these issues details of its nationals under a new automatic will be deliberated. So that is a step you will see information exchange pact. next three months or at least from April, IBA should be able to come out with a framework,” said Kumar. India is among 75 countries with which Switzerland’s Federal Tax Administration (FTA) “IBA has taken members from foreign, private and has exchanged information on financial accounts public sector banks so that there is a commonality of within the framework of global standards on AEOI approach. It is not that public sector banks are going or Automatic Exchange of Information. It is feared in one direction, foreign banks in other and private that many Indians might have closed their accounts sector banks are going in another direction,” Kumar after a global crackdown on black money led to said. For creating an alternative source of funding, Switzerland buckling under international pressure he said the industry is aware that the Reserve Bank to open its banking sector for scrutiny to clear the has already set up a working group for developing the long-held perception of Swiss banks being safe secondary market for corporate loans. haven for undisclosed funds. - Financial Express, 23/12/2019 Switzerland agreed to AEOI with India after a long process, including review of necessary Finance ministry declines to share Swiss bank legal framework in India on data protection and accounts details of Indians citing confidentiality confidentiality. The National Council of Applied The Finance Ministry has declined to share Swiss Economic Research (NCAER), that was one of bank accounts details of Indians saying it is covered the three institutes commissioned in 2011 by the under “confidentiality provisions” of a tax treaty then UPA government to conduct a study on black signed between India and Switzerland. In reply to an money, has estimated wealth accumulated outside RTI query, the ministry also refused to disclose the India between USD 384 billion and USD 490 billion details of black money received from other foreign during the period 1980 to 2010. countries. Another institute — National Institute of Financial “Information exchanged under such tax agreements Management (NIFM) — had in its findings said the is covered under confidentiality provisions of results of estimation suggest that total illicit outflow respective agreements. Thus, disclosure of tax at the present value (including opportunity cost) related information and information sought/ from India in the reform period (1990-2008) is Rs obtained from foreign governments is exempted 9,41,837 crore (USD 216.48 billion). Importantly,

By being always pleasant and smiling takes you to God, nearer than any prayer can. - Swami Vivekananda Officers’ Voice, February 2020 19 illicit outflows from the country are estimated on credit to the productive sectors of the economy,” it average to 10 per cent of the estimated unaccounted said. The RBI said that slowing credit growth was income. an area of concern.

During the period 1997-2009, illicit financial flows Banks’ credit grew 8.07% to Rs 98.47 lakh crore in out of the country have been in the range of 0.2% the fortnight-ended Nov 6. In the previous fortnight to 7.4% of GDP, according to the National Institute ended Oct 25, bank credit had grown by 8.90% to of Public Policy and Finance (NIPFP). These study Rs 98.39 lakh crore. reports of the NIPFP, NCAER and NIFM were received by the government on December 30, 2013, July 18, - The Economic Times, 25/12/2019 2014, and August 21, 2014, respectively. The findings Delay in recognition of bad loans hurts lenders of these reports were made public by the Standing Delays in recognition of non-performing assets Committee on Finance in its preliminary report (NPA) and the lack of timely allocation of provisions submitted in the Parliament in March this year. on these bad loans can impact the financial health - Financial Express, 24/12/2019 of banks, the RBI said in its report. RBI warns banks over focus on retail loans “Empirical evidence suggests that the profitability of banks that delay recognition and adequate The Reserve Bank of India (RBI) has red-flagged banks’ provisioning for impaired assets is adversely affected reliance on retail loans over slowing economic activity as compared to those that act in a timely manner,” and negative consumer sentiment. The banking the central bank said in a report published Tuesday. regulator called for a granular lending strategy to After seeing seven consecutive years of rising bad offset risk concentration in its annual publication on loans, the banking sector in FY19 posted a decline trends and progress of banking in India. in consolidated bad loans, the report showed. The “Lenders have been shifting their focus away from gross NPA ratio in the fiscal year 2018-19 came in large industrial loans towards retail loans, as bad at 9.1% as against 11.2% in the year-ago period, loans of the latter have traditionally been low,” RBI while net NPA nearly halved to 3.7%. noted in the report. “This diversification strategy, Separately, the provision coverage ratio (PCR) of all while helpful as a risk mitigation tool, has its own scheduled commercial banks improved to 61% by limitations: the slowdown in consumption and September 2019, RBI said, on the back of declining overall economic growth may affect the demand for NPAs at the public-sector banks. RBI noted that and the quality of retail loans.” the recognition of past bad loans has “neared Household leverage and indebtedness need to be completion” in the reported fiscal year on the back kept in focus in the context of overall financial of the asset quality review exercise undertaken stability, it further said. With corporate loans rigidly by the central bank in 2015 and the subsequent at multi-year lows, risk-averse banks lapped up implementation of the framework for resolution of retail credit. Of late, retail asset quality is showing stressed assets in February 2018. signs of stress as individual borrowers are delaying The framework that had made it mandatory for payments, especially in auto, two-wheeler and loans banks to identify signs of incipient stress in loan taken to buy consumer durable products, data from accounts and classify these assets as Special credit rating CRIF High Mark shows. RBI also said Mention Account, immediately on default, was that the need of the hour is to kick-start industrial revised in June 2019 to provide banks a window to credit and use that to regenerate a virtuous cycle of resolve these toxic accounts without taking them capex, investment and growth. into administration. “Going ahead, this framework “Some sector-specific pockets of stress will need is expected to induce timely recognition of stressed policy attention. Proper risk pricing in lending is of assets, thus helping strengthen the financial health prime importance so that the health of the banking of the banks,” the central bank said. sector is not compromised while ensuring adequate - The Economic Times, 25/12/2019

What’s more miserable than discontent? - William Shakespeare Officers’ Voice, February 2020 20

Change in SARFAESI Act to give priority to consortium of 15 lenders, led by State Bank of India, secured creditors to use the movable assets of former liquor baron Vijay Mallya towards repayment of his debts. The Debt owed to a secured creditor will get priority assets, comprising financial securities like shares over all other claims — including other debt and of the United Breweries Holdings Ltd (UBHL), were all revenue, taxes, cess and dues payable to the attached by the special court under the Prevention Central and State governments and local authorities of Money Laundering Act (PMLA) in 2016 when it — after an amendment to the Securitisation and declared Mallya a proclaimed offender. Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act was notified Under the Criminal Procedure Code, a court can last week. attach a person’s movable assets after he/she has been declared a proclaimed offender. The “It is a huge positive for creditors pursuing consortium of banks earlier filed an application SARFAESI,” said Hari Hara Mishra, director at before the special court, seeking release of Mallya’s UV Asset Reconstruction. “Their claims over movable assets to use them for repayment of loans secured assets getting priority over other claimants given to him. reinforces the basic principles of bank lending against charged security.” Last year, recovery Senior counsel Rajeev Patil, appearing for the through major resolution mechanisms declined, consortium, said the special court on Tuesday especially through the SARFAESI Act. Over lifted the attachment on the movable assets. The 248,000 cases were referred for recovery through court has, however, stayed its order till January the SARFAESI Act in 2018-19, involving an amount 18 to enable the parties concerned to approach the of Rs 2.89 lakh crore. Banks recovered Rs 41,876 Bombay High Court in appeal. crore, or 14.5 per cent of the amount involved, Senior counsel Amit Desai, appearing for Mallya, which was lower than the recovery rate of 32.3 per said the court has ordered lifting of attachment of cent in 2017-18. assets, which are UBHL shares. “However, we do The SARFAESI Act allows banks and financial not know if the court has ordered for the assets to institutions to auction residential or commercial be restored to SBI or the consortium. We are waiting properties of a defaulter to recover loans. Under for the order copy for further clarity,” Desai said. the Insolvency and Bankruptcy Code, the amount - The Hindu BusinessLine, 01/01/2020 recovered in 2018-19 was Rs 70,819 crore, or 42.4 per cent of the amount of Rs 1.66 lakh crore NCLAT passed several judgements in 2019, but involved, according to Reserve Bank of India data. many were ‘set aside’ by the Supreme Court Bad loans of banks declined in 2018-19 after rising Though the National Company Law Appellate for seven consecutive years, after recognition of Tribunal (NCLAT) passed several orders/ judgments non-performing assets neared completion and the in the insolvency and corporate matters in 2019 slippage ratio improved. While a part of the write- which include Tata-Mistry feud, Essar Steel, Jet offs was due to aging of loans, recovery efforts Airways, IL&FS, Jaypee Infratech, and Reliance received a boost from the IBC. The restructured Communications, several of them failed to pass the standard advances to gross advances ratio began scrutiny of the Supreme Court and were either set declining after the asset quality review in 2015 and aside or modified. reached 0.55 per cent at the end of March 2019. Tata-Mistry case Also, cases referred for recovery under various mechanisms grew over 27 per cent in volume and While for 2020, NCLAT’s calendar is marked with tripled in value to over Rs 8.15 lakh crore in FY19, several important matters and would start the leading to a pile-up of bankruptcy proceedings. year with the government-controlled Registrar of - The Economic Times, 30/12/2019 Companies (RoC) plea to modify the order passed by it in the Tata-Mistry case, in which it had directed Banks allowed to liquidate Mallya’s movable to change the status of Tata Sons from a private assets to repay debt company to a public company, the holding firm of A special court in Mumbai has permitted a $110 billion empire. Besides, judgments are also Officers’ Voice, February 2020 21 expected from the appellate tribunal on other In July, the NCLAT permitted fresh bidding for important matters which include the insolvency the debt-laden Jaypee Infratech and extended the of Bhushan Power & Steel Ltd in which JSW resolution period for another 90 days. However, in has challenged attachment of assets by the ED; November the apex court annulled the order and resolution of IL&FS group which has an outstanding allowed only two revised resolution plans from debt of over Rs 90,000 crore; and McDonald’s- NBCC (India) Ltd and Suraksha Realty for voting. Bakshi matter, where state-run HUDCO is opposing The NCLAT order in January directing initiation settlement offer by US-based QSR major. of insolvency proceedings against investment firm Essar Steel takeover case La-Fin Financial Services over the plea of IL&FS Financial Services had similar outcome at the apex In the Essar Steel insolvency matter, the NCLAT court. The order was set aside by the Supreme in July this year while giving a final go ahead to Court which held that IL&FS Financial Services plea the global steel giant Arcelor Mittal for Rs 42,000 was beyond the period of three-years mentioned in crore takeover of Ruia’s firm had put all the Article 137 of the Limitation Act, and thus is time- operational creditors of the company almost at barred and cannot be proceeded further. par with the secured financial creditors over the disbursement of funds. It had shaken the banking In 2019, some of the NCLAT orders also raised world as the appellate tribunal had altered the plan eyebrows. The order in case of Sterling Biotech was voted by Essar Steel’s lenders and approved by one such example. NCLT Ahmedabad and was challenged before the The appellate tribunal not only stayed the Supreme Court. liquidation of the company but also directed to CoC to have the final say hand over the management to its promoters, including absconding Nitin Jayantilal Sandesara The apex court on November 15, not only upheld and Chetankumar Jayantilal Sandesara. the primacy of financial creditors in the distribution of funds received under the corporate insolvency - The Hindu BusinessLine, 02/01/2020 scheme, but also ruled that the CoC would have a Bank mergers to see scores of mediclaim holders’ final say in the resolution plans under the Insolvency premium jump 50-300% and Bankruptcy Code (IBC). In August, the NCLAT Lakhs of mediclaim customers are expected to ordered for liquidation of auto component maker be the first casualty of the government-proposed Amtek Auto declining its lenders plea for extension merger of 10 banks as premiums for most of the of the insolvency resolution process deadline. customers of the banks which are being merged are This was challenged by the lenders before the set to increase between 50% and 300% from next Supreme Court, which last month directed the year. Senior citizens, who depend on pensions or resolution professional to invite fresh bids for the interest from FDs for monthly income, are expected auto component maker within 30 days. to be hit the hardest as they would most probably be not able to afford such a steep increase in In another case, the NCLAT in November rejected premiums. the bid of Dhanuka Laboratories for Orchid Pharma and set aside the approval granted by the Most Public Sector Banks (PSBs) offer their savings Chennai-bench of the NCLT. The NCLAT observed bank and credit card customers health covers through that the approved resolution value, which stood at group mediclaim policies which are sourced from Rs 1,146.04 crore, proposed by Dhanuka their bancasssurance partners. Insurance regulator Laboratories was lower than the liquidation value IRDA, allows banks only one bancasssurance partner of Rs. 1,309 crore of the company. This was for each type of insurance - life, health or motor. challenged by the CoC before the Supreme Court When the PSBs merge, their existing bancasssurance which granted a stay on the order last month. tie-ups will also get dissolved.

I think, therefore I am. - Rene Descartes Officers’ Voice, February 2020 22

And as IRDA rules don’t allow porting of group PSU banks may adopt new corp lending practice health plans, customers of the merged banks will After decades, India’s government-owned banks are either have to buy individual mediclaim policies or likely to change the way they lend. Since the 1970s, will be treated as new customers under the group public sector banks have given out most working health cover of their new bank. capital loans — required for day-to-day operations Being treated as new customers would be of a business — on the basis of net current assets devastating for policyholders, many in 30-60 age of corporate borrowers, a flawed system that is bracket, as they will suffer fresh exclusions and believed to have resulted in over-funding to some waiting periods of 2-5 years for conditions as varied and under-funding to others. as pregnancy, diabetes, asthma, hypertension, kidney and heart surgery. The outdated practice may soon change, with the country’s largest lender, State Bank of India, Some 64,500 credit card customers of Vijaya Bank proposing a transition from an ‘asset-based lending’ are the first to bear the brunt as they are no longer model to ‘cashflow-based lending’ — a mechanism covered under the health insurance scheme of two that, among other things, may reduce misuse of decades. They will have to move from United India funds by borrowers and enable banks to figure out Insurance to Max Bupa, which is the bancassurance ability of borrowers to service loans on time. The partner of Bank of Baroda, following the bank shift will require borrowing entities to share their merger last year. Or they will have to bear the cost cashflow statements more frequently with banks. of renewing their policy with the existing insurer as an individual one. A committee headed by Madhav Kalyan, chief TOI found that PSB customers who for years enjoyed executive officer of JPMorgan, has been constituted group mediclaim at rates of Rs 7,500-12,000, will to look into the matter, two people aware of the now have to shell out Rs 22,000 and Rs 75,000, if development told ET. “The matter was mentioned these policies get converted into individual policies at a meeting of the Indian Banks’ Association in with annual renewal. December. Though proposed by SBI, it has to be a collective decision by the industry,” said one One such Vijaya Bank customer, 79-year-old B S person. Public sector banks have a more than 55% Behl of Bengaluru and his wife Shantha Behl, 78, share of the loan market. enjoyed a health cover of Rs 5 lakh for the past 20 years at an annual premium was Rs 12,910. When “Assets don’t help companies to repay loans. It’s they approached United Insurance to renew the their cashflow that makes a difference. It’s high policy, they were given a quote of Rs 49,000 if they time state-owned banks migrate to a cashflow- wanted to continue. For Behl’s son Sanjay, 51, who linked system to finance working capital… private was paying the same premium of Rs 12,910 for a and MNC banks have been doing it for over a decade policy including his wife and son, the new rate is now,” said a senior banker. Rs 22,000. Small and medium-sized businesses, which often A United India Insurance official said the risk of do not receive payments from buyers for four insured people is lower when one is covering to six months, draw less bank finance than they through a large group as the volumes make up for need. Compared with this, large companies, whose claim incurred. “But for an individual, we have to distributors promptly pay up and have other look at their age group and then price the policy avenues of finance, end up being over-funded by accordingly, which are approved by the regulator.” banks. Except for some seasonal industries such IRDA did not respond to requests for comment. as sugar, public sector banks arrive at a company’s “When BoB took over Vijaya Bank, it took over both working capital requirements by considering the its assets and liabilities. So today, how can they difference between the borrower’s current assets not honour our genuine demands?,” asked Ganesh (receivables, raw material, stock, finished goods) Prasad, a lawyer who was told to pay premium of and current liabilities (payables like loan interest, Rs 75,000 if he wanted to renew his Rs 5 lakh cover taxes, payment to vendors and workers). for his family of five. While 25% of the working capital gap (the difference -The Times of India, 03/01/2020 between assessed gross working capital assets Officers’ Voice, February 2020 23 minus gross working capital liabilities) is met by Tharman Shanmugaratnam, Senior Minister, the company, banks fund the remainder, though Republic of Singapore. in many cases, they end up funding more. Most of Agri reforms the working capital finance is in the form of cash credit, a system where companies freely draw (and In the area of agricultural market reforms, Das service interest) within a certain limit or drawing said there is consensus that the improvement in power fixed by the lender. the supply chain could become a major channel for promoting inclusive growth, as this can increase Against this, in cashflow-based lending, banks will the share of farmers in retail prices paid by the have to consider actual cash inflows and outflows of consumers. A survey conducted by the RBI in a company in deciding the drawing power. Inflows 2018 that covered farmers, traders and retailers would be sales realisation, fresh borrowings, in 85 mandis, spread across 16 States, found that repayment by debtors, new capital infusion and the difference between retail prices that consumers sale of fixed assets, while outflows would include pay and mandi prices that farmers receive (margins salaries, taxes and loan repayments. or mark-ups) varies across crops and centres. The “India is probably the only country with cash credit average share of farmers in retail prices of major system of funding working capital requirements primary food items varies between 28 per cent to of commercial borrowers,” according to veteran 78 per cent. It is lower for perishables and higher banker PH Ravikumar. for non-perishable items.

The world over, funding is through loans repayable The Governor said: “Higher share of retail prices by instalments (repayments coming out of operating going to farmers augurs well for the rural economy, profits); cash credit system is, in a sense, perennial which, in turn, could help sustain domestic funding and hides symptoms of financial difficulties demand. Initiatives towards wider rural roads of corporates; banks would do well to fund a larger network, better communication facilities for faster proportion of the working capital funding through exchange of information, and easier access to micro loans and minuscule proportion through overdrafts credit will contribute to better price realisation for or cash credit products.” the farmers.”

- The Economic Times, 03/01/2020 Ways to boost farm income He observed that this ongoing process needs to be Priority sector lending norms for banks under sustained, alongside further agricultural market review, says RBI chief reforms. Prioritising food-processing industries in The Reserve Bank of India (RBI) is reviewing the the policy agenda, encouraging direct sale of farm priority sector lending (PSL) norms for banks, produce by farmers to consumers, strengthening keeping in view the changing needs of the economy e-NAM (national agriculture market) for better and to make them more inclusive, according to price discovery, and promoting storage facilities Governor Shaktikanta Das. PSL includes loans near producing centres will boost farm income and given by banks to sectors such as agriculture, micro, rural employment opportunities. small and medium enterprises (MSMEs), export Das said the RBI has also taken various measures to credit, education, housing, social infrastructure increase the level of penetration of banking services and renewable energy. to the unserved and underserved areas. Recently, “Through priority sector lending norms for the National Strategy for Financial Inclusion commercial banks, we aim to support farm and (2019-24), prepared by the RBI, was approved by non-farm sector activities that are sources of the Financial Stability and Development Council livelihood for a large cross-section of population,” (FSDC). It sets forth the vision and key objectives the Governor said in his opening remarks at the of financial inclusion policies in India and aims to third Suresh Tendulkar Memorial Lecture by provide access to formal and affordable financial

Live as if you expected to live a hundred years, but might die tomorrow. Officers’ Voice, February 2020 24 services, broaden and deepen financial inclusion, present in India. The audio-visual interaction has and promote financial literacy and consumer to be triggered from the domain of the RE itself, and protection. not from the third-party service provider, if any.

- The Hindu BusinessLine, 08/01/2020 The V-CIP process has to be operated by officials specifically trained for this purpose. The activity log, KYC: RBI permits video-based customer along with the credentials of the official performing identification process the V-CIP, has to be preserved. With a view to leveraging digital channels for REs must ensure that the video recording is stored Customer Identification Process (CIP) by Regulated in a safe and secure manner and bears the date Entities (REs), the Reserve Bank of India has decided and time stamp. The central bank said the official to permit Video-based Customer Identification of the RE has to ensure that the photograph of Process (V-CIP) as a consent-based alternate the customer in the Aadhaar/PAN details matches method to establish the identity for customer on- with the customer undertaking the V-CIP, and the boarding. identification details in Aadhaar/PAN must match In amendments, which come into force with with the details provided by the customer. immediate effect, to the Master Direction (MD) on The official of the RE has to ensure that the sequence Know Your Customer (KYC), the RBI said REs may and/or type of questions during video interactions undertake live V-CIP, which can be carried out are varied in order to establish that the interactions by an official of the RE, for the establishment of are real-time and not pre-recorded. an account-based relationship with an individual customer after obtaining his consent. This process In case of offline verification of Aadhaar using XML has to adhere to certain stipulations. (eXtensible Markup Language) file or Aadhaar The stipulations include the official of the RE Secure QR (quick response) code, it has to be performing the V-CIP recording video as well ensured that the XML file or QR code generation as capturing the photograph of the customer for date is not older than three days from the date of identification and obtaining the identification carrying out the V-CIP. information. - The Hindu BusinessLine, 09/01/2020

Banks can obtain identification information either MDR Waiver: Banks’ compensation demand by OTP-based Aadhaar e-KYC authentication or turned down offline verification of Aadhaar. Further, the services of Business Correspondents (BCs) may be used by The government has turned down a request from banks for aiding the V-CIP. commercial banks for compensation to the tune of Rs 2,000 crore a year for the loss of revenue REs, other than banks, can obtain identification arising out of the waiver of merchant discount rate information only by carrying out offline verification (MDR) on digital payments through RuPay cards of Aadhaar for identification. The RBI said the RE and Unified Payment Interface (UPI). The waiver, has to ensure to redact or blackout the Aadhaar effective January 1, is aimed at incentivising digital number. The RBI said a RE needs to capture a payments and is in sync with the policy objective clear image of the PAN card to be displayed by the of moving towards a less-cash economy. Sources customer during the process, except in cases where said the finance ministry reckons that with digital e-PAN is provided by the customer. The PAN details payments picking up momentum as a result of have to be verified from the database of the issuing MDR waiver, banks will only stand to gain on a net authority. basis. Geotagging Banks will save substantially on their expenditure Live location of the customer (geotagging) needs to shared with the RBI on currency printing, be captured to ensure that customer is physically transportation, storing, replacing, and handling

The wise foresee what is to come The unwise lack in that wisdom. - Thirukkural Officers’ Voice, February 2020 25 due to the incremental rise in assorted digital Nestle India tops the gender balance on board of transactions. It is estimated that banks spend some directors, according to a study by myrna labs. Rs 21,000 crore annually for currency-related costs. The top tier includes the company’s and the Effective January 1, the government waived MDR leadership (C suite) and people reporting to the on payments made through prescribed electronic Chief Executive Officer. A total of 24 of the 50 modes. It has made it a must for every business companies do not have a single woman on their with a turnover above Rs 50 crore to provide the leadership team, while only three companies have option of digital payments through UPI, RuPay card more than three women in their leadership teams, and QR code to all customers without any MDR said the study titled INclude. charges. “There is no denying that SEBI directed compulsion Sources said the government looked at MDR charges of having one-woman independent director on as a big disincentive for consumers and merchants boards (for the top 500 listed companies) by April 1, in adopting a cashless economy while it served as 2019, helped make space for women on boards. But a money-spinning business for service providers. With digital transactions valued at around Rs progress on achieving gender balance is stunted, 14 lakh crore per month, the MDR comes in at to say the least,” Leena Chakrabarti, founder at around Rs 7,000-Rs 8,000 crore annually. Of this, myrna labs. She added “We see this as soon as nearly 55% of revenue goes to the private fintech we expand the focus to leadership teams. With an players and the balance go to the banks of various overall gender balance of just 6 per cent on the categories. leadership team, and the fact that almost half of the Nifty50 companies still don’t have one woman The banks in their representations to the government in their leadership teams, India Inc’s top brass has have also claimed that the MDR waiver policy a lot of ground to cover.” would nullify years of hard work done by domestic companies in expanding digital payments network With a 43 per cent gender balance, Cipla not only and would put National Payments Corporation ranks at the top of the list but is also the only of India (NPCI) in a competitive disadvantage company ranked as balanced in the portfolio. At over international rivals operating in the market, Cipla, the presence of women in leadership roles sources said. is not just for support functions but also in core business operations, including manufacturing. In “Government could perhaps consider widening the scope of MDR waiver to all debit card networks, the Nifty50 sectoral gender balance, pharmaceutical including Visa and Mastercard, but banks should firms (20 per cent) are leading, followed by IT, not expect any subsidy from the government for financial services and consumer goods. Energy, deployment of payment infrastructure,” an official automobile, metals are still snoozing, each with a said. He added that banks are duty bound to top tier gender balance of just about 7 per cent, provide for payment infrastructure through savings it added. The overall gender balance of Nifty50 they would make in their cash management cost. company boards are at 17 per cent, with a ‘Waking Up’ ranking. - Financial Express, 12/01/2020 - The Hindu BusinessLine, 14/12/2019 miscellany Samsung’s Chairman sentenced for union sabotage About half the Nifty 50 companies do not have women in their leadership team’ The Chairman of Samsung Electronics, the world’s biggest smartphone and chip maker, has been Pharmaceutical major Cipla is the only company jailed for sabotaging union activities, prompting a with top tier gender balance amongst all the Nifty50 rare apology on Wednesday from the firm. companies, followed by Tech Mahindra and Infosys.

Kindness gives birth to kindness. - Sophocles Officers’ Voice, February 2020 26

Chairman Lee Sang-hoon and Executive Vice- should be provided for the revival of potentially President Kang Kyung-hoon were both sentenced to viable sick PSUs. The trade unions also suggested 18 months for leading a wide-ranging operation to that the government refrains from strategic sale of deter staff at Samsung’s customer service unit from viable PSUs in core sectors like steel, coal, mining, operating a union. Lee and Kang were found guilty heavy engineering, pharmaceuticals, dredging, civil by the Seoul a Central District Court on Tuesday aviation, financial institution, among others. The of violating labour union laws, with prosecutors unions also asked to extend the rural employment saying they had ordered subordinates to cut union guarantee scheme MGNREGA to urban areas also members’ wages, among other tactics. and enhance minimum employment guarantee to 200 days in a year. - The Hindu BusinessLine, 19/12/2019 A Finance Ministry statement said, “During the Trade unions seek higher minimum wage, course of meeting, representatives of trade unions pension; want I-T Exemption limit raised and labour organisations shared their views and suggestions regarding labour and employment Trade unions have urged the government to provide issues. Discussions were held on skilling, re- minimum wage of Rs 21,000, minimum pension of skilling and up skilling of existing labour force. Rs 6,000 under the Employees’ Pension Scheme Quality of job creation and ensuring minimum and tax exemption on annual income of up to Rs 10 wages of workers were discussed.” It also stated lakh. In a pre-Budget meeting with Finance Minister, that during the meeting, representatives of trade Nirmala Sitharaman, on Thursday, the unions unions and labour organisations shared their views also raised concerns over rising unemployment in and suggestions regarding job creation, labour the country, saying employment generation has concerns and quality of employment issues. nosedived in recent times. They also emphasised quality of job creation and The trade unions suggested that massive public ensuring minimum wages of workers in detail investment in infrastructure, social sectors and besides the need for streamlining various schemes agriculture would generate employment and to have better results, it added. Along with the the Union Budget should give it a priority and Finance Minister, the meeting was attended by allocate necessary funds. They demanded that all Anurag Singh Thakur, Minister of State for Finance vacant sanctioned posts in various government & Corporate Affairs, Rajeev Kumar and top officials departments, including Railways, PSUs and of labour and finance ministries. autonomous institutions, should be filled through - The Hindu BusinessLine, 20/12/2019 fresh recruitment. They also suggested lifting of the ban on creation of new positions and mandatory When Rahul Bajaj broke the silence of India Inc reduction of government posts. on economy

Denial of level playing field Several industry veterans join in to raise their The unions said denial of level playing field to many concerns PSUs had put thousands of jobs in jeopardy. The Whenever the economy goes into a downward unions also pointed out that the merger of BSNL- spiral, policies aligned with growth ambitions are MTNL and voluntary retirement of almost 79,000 a far cry and the industry suffers, vocal leaders of workers is opposed to the idea of job creation. India Inc are usually the first ones to raise the red Lodging their protest against fixed term employment flag. But not against the BJP-led government in (FTE), the unions said the provision of FTE should 2019, except a few. be done away with, and concerned notification Those who stood out were the likes of Rahul Bajaj, should be rescinded forthwith. Kiran Mazumdar-Shaw and Ajay Piramal for their On disinvestments and strategic sale of public words in an otherwise seemingly insulated, blissful sector units, they said that Budgetary support world of their fellow corporate leaders even when

Higher education results in philosophy and philosophy is a guide to action. - S Radhakrishnan Officers’ Voice, February 2020 27

India’s rapidly slowing GDP growth touched a said. Bajaj found support from Biocon CMD Kiran six-year low at 4.5 per cent in the second Mazumdar-Shaw who hoped that the government quarter as manufacturing output slumped and would reach out to India Inc for working out consumer demand as well as private investment solutions to revive consumption and growth. weakened. Replying to Sitharaman’s response to Bajaj, Shaw retorted, “Madam we are neither anti-national nor Falling sales anti-government”. In visible signs of economic woes, the auto sector Different views went through one of the longest sales slumps RP-Sanjiv Goenka Group Chairman Sanjiv Goenka, leading to nearly 3.5 lakh job losses. In the FMCG however, disagreed with Bajaj’s views and asserted sector, concerns persisted that consumers were that there was no fear among industrialists. thinking twice even before buying a Rs. 5-pack. The Speaking at the India Today Conclave East 2019, telecom segment continued to be under the pump, Goenka lauded the Narendra Modi-led government so was the stressed power sector. Adding to the for taking up steps to reach out to the common man problems, non-performing assets plagued banks and bring structural changes. “For the first time in while two major non-banking financial companies several years, I see the will and the determination — IL&FS and DHFL — crashed. Still, the leading to do a structural change. In the past, it was pretty lights from India’s corporate world could not hold much the way it was. For the first time, I see up the mirror to the government. changes at different levels,” Goenka said. For once, it was the “Silent Prime Minister” — To be fair to Piramal Group Chairman Ajay Piramal, Manmohan Singh, now a vocal Opposition member it was he who first mustered up the courage to tell — who did the talking on behalf those who blamed the government in September that all was not well him for ‘policy paralysis’ and criticised him while he in the relationship between the industry and the was at the helm for being weak, indecisive and silent. ruling dispensation, and that mistrust between Writing on The Hindu newspaper on November 18, government and businesses was growing due to Singh wrote that there was “a palpable climate of frequent raids, searches and lookout notices by fear in our society today”. various agencies on corporates. “Today, I see there “Many industrialists tell me that they live in is a gap, there is mistrust between the people fear of harassment by government authorities. who are in power and the people who are wealth- Bankers are reluctant to make new loans, for creators,” he said. fear of retribution. Entrepreneurs are hesitant to A little before him, L&T non-executive Chairman put up fresh projects, for fear of failure attributed AM Naik had raised a faint voice while speaking to ulterior motives. Technology start-ups, an on the sidelines of the company’s AGM in August, important new engine of economic growth and hinting to challenging times faced by private sector jobs, seem to live under a shadow of constant to make investments. In 2020, the industry will surveillance and deep suspicion,” he wrote. Not hope to have more freedom to perform and raise long after, at an event organised by the national concerns to the government without fear. daily in Mumbai on November 30, where Home - The Hindu BusinessLine, 25/12/2019 Minister Amit Shah, Finance Minister Nirmala Sitharaman, and Commerce Minister Piyush Goyal Now, link PAN & Aadhaar till March 31, 2020 were present, industrialist Rahul Bajaj spoke about The last date for the mandatory linking of the the government’s stifling of criticism, among other Permanent Account Number (PAN) with Aadhaar things. has been extended till March next year, the CBDT This environment of fear, it’s definitely on our said on Monday, reports PTI. The earlier deadline minds. You (the government) are doing good work; was Tuesday, December 31. This is the eighth time and despite that, we don’t have the confidence that that the CBDT has extended the deadline. you’ll appreciate criticism, the veteran industrialist - Financial Express, 31/12/2019

Nothing has yet been said that’s not been said before. - Terence Officers’ Voice, February 2020 28

MSME sector poised for mega transformation in 2020 enterprises are under-banked and underserved,” Suryakumar said. India’s MSME sector is poised for a mega transformation in 2020, with the launch of an - Financial Express, 31/12/2019 Alibaba-like e-marketplace, trendy yet affordable No Pension if staffer resigns says SC khadi products to appeal to the masses and digital data-based credit ratings to help entrepreneurs An employee who has resigned from service is not avail loans. entitled to pensionary benefits due to a worker who has voluntarily retired, the Supreme Court held. However, the MSME sector, often considered the bulwark of the economy as it contributes 29 A Bench of Justices D.Y. Chandrachud and per cent to the GDP and 48 per cent to exports, Hrishikesh Roy, in a recent judgment, referred to is in an urgent need of major reforms and policy the past verdicts and said resignation and voluntary interventions towards ensuring timely availability retirement, though voluntary on the part of an of low cost credit, improving ease of doing business employee, operated differently and had dissimilar and technology upgradation, to take on the consequences. formidable challenge of creating millions of jobs and achieving large-scale import substitution. “One of the basic distinctions is that in the case of resignation, it can be tendered at any time, but The Centre envisions a contribution of $2 trillion in the case of voluntary retirement, it can only be from micro, small and medium enterprises (MSMEs) sought for after rendering the prescribed period of as India eyes becoming a $5 trillion economy qualifying service,” the judgment said. by 2024. The Union MSME ministry helmed by Nitin Gadkari has also set a target of generating “Another fundamental distinction is that in the case five crore additional jobs from the sector by then, of the former, normally retiral benefits are denied two ambitious goals which would require a robust but in the case of the latter, the same is not denied. policy framework. In the case of the former, permission or notice is not mandated, while in the case of the latter, permission Gadkari recently told PTI that the government will of the employer concerned is a requisite condition,” soon finalise extensive changes to the definition of the court said, referring to a past judgment. an MSME, which experts believe is set to be a major reform for the sector and will improve the ease of Distinct consequences doing business through changing the criteria for Justice Chandrachud, who authored the verdict, classifying MSMEs from 'investment in plant and said “The decision to resign results in the legal machinery' to 'annual turnover’ basis. However, consequences that flow from a resignation under timely availability of low-cost credit remains a the applicable provisions. These consequences challenge. are distinct from the consequences flowing from According to Meghna Suryakumar, Founder & CEO, voluntary retirement and the two may not be Crediwatch, India has more than 50 million small substituted for each other based on the length of and medium enterprises which face the problem of an employee’s tenure.” liquidity crunch. Out of these, only 15 per cent get -The Hindu BusinessLine, 31/12/2019 access to formal credit due to the trust deficit that exists and they lack collateral. New Year shocker: Rlys hikes passenger fares

“They find it to be a risky investment. And for the On the New Year’s Eve, the railways announced ones who get access to formal credit, they have to fare hike across its network, excluding suburban wait for 4 to 6 weeks to get their loan processed trains, effective from January 1, 2020, according at a staggering rate of 16 to 24 per cent. This to an order issued on Tuesday. While suburban scenario creates a debt financing gap of $1 trillion fares remain unchanged, ordinary non-AC, non- in the market and hence these small and medium suburban fares were increased by1 paise per km of

Faith builds a bridge from the old world to the next. - Edward Young Officers’ Voice, February 2020 29 journey. The railway also announced a 2 paise/km India will struggle to post 5% GDP growth in hike in fares of AC classes. 2020

The fare hike is also applicable to premium trains Current slowdown related to credit squeeze: US such as Shatabdi, Rajdhani and Duronto, according economist Steve Hanke to the order. In the Delhi-Kolkata Rajdhani, which covers a distance of 1,447 km, the hike at the rate India will “struggle” to achieve 5 per cent GDP 4 paise per km will be around Rs 58. According growth in 2020 as the significant deceleration to the order, there will not be any change in the in past few quarters was largely owing to credit reservation fee and superfast change. Officials said squeeze which is a cyclical problem, said noted the hike in fares will not be applicable to tickets American economist Steve Hanke. Hanke, who already booked. currently teaches applied economics at Johns Hopkins University in the US, pointed out that The last such hike was announced in 2014-2015 India experienced an unsustainable credit boom, when fares of all classes of trains were raised by and now the chickens are coming to roost with 14.02% and freight changes by 6.5%. However, since a massive pile of non-performing loans piled up, then, the railways introduced the flexi-fare scheme primarily at the state-owned banks. which significantly raised fares on select trains and “The slowdown in India is related to a credit squeeze, launched trains like Vande Bharat Express and which is a cyclical problem — not a structural Tejas Express which have relatively higher fares. problem... As a result, India will struggle to make a Trains with dynamic pricing like Suvidha Express GDP growth rate of 5 per cent in 2020,” he told PTI were also introduced. in an interview. He also noted that India is already The railways in a statement said the revenue highly protectionist. India, which till recently generated by the “marginal” increase in fare will was hailed as the world’s fastest-growing major be used for the modernization of the country’s economy, has seen growth rate decline to a six- rail network. “Indian Railways has continuously year low of 4.5 per cent in the September quarter endeavored to augment passenger experience of 2019-20. This has largely been attributed to the through modernization of coaches and provision slowdown in investment that has now broadened of coaches provision of improved facilities over into consumption, driven by financial stress among stations. Further, the burden of 7th pay Commission rural households and weak job creation. Hanke, on Indian Railways has necessitated rationalization who had served on former US President Ronald of fares. Reagan’s Council of Economic Advisers, further said that the Modi government has failed to make “In order to expand passenger amenities and any big economic reforms. facilities at various railways stations and trains, it has become imperative to increase the fare Rap for Modi govt marginally without over burdening any class of Hanke opined that the Modi government seems to passengers. Fast modernization of Indian Railways have little interest in making tough and required will be achieved through this fare revision,” it said. economic reforms. “Instead, the Modi government It also said the suburban passengers have been left has focussed on two things that are destabilising out of the hike keeping the “affordability concerns and potentially explosive: ethnicity and religion. of daily commuters”. This class constitutes 66% “This is a deadly cocktail. Indeed, many believe that of total passenger segment of the railways. The under Modi, India is already being transformed increase in fare will be on tickets bought on or after from the ‘world’s largest democracy’ into the ‘world’s January 1, 2020 and no excess fare (difference of largest police state’,” the eminent economist, fare) will be changed from passengers who have who is also a senior fellow and director of the booked tickets before this date. Troubled Currencies Project at the Cato Institute in - The Times of India, 01/01/2020 Washington said. E-mail queries sent to the Prime

An open confession is good for the soul. Officers’ Voice, February 2020 30

Minister’s Office (PMO) seeking comments did not High spenders can file income tax returns for AY elicit any response. 21 in SAHAJ

- The Hindu BusinessLine, 02/01/2020 High spenders will now be able to file Income Tax Return (ITR) for Assessment Year 2020-21 (Financial Air India, BPCL, Concor divestments unlikely Year 2019-20) through the Sahaj (ITR-1) form. this fiscal, say govt official High spenders are those who have deposited `1 In what can potentially hurt the fiscal math for crore or more in the current account or spent `2 the ongoing fiscal, a senior government official lakh or more on foreign travel or incurred expenses said strategic divestments in Air India, BPCL of `1 lakh or more on electricity. and Container Corporation are “unlikely” to be completed in FY20. Work on all these companies is Within days after notifying new returns forms, the on and the process is facing delays due to “surprises” Income-Tax Department on Thursday relaxed the encountered once the wheels have begun moving, norms for using Sahaj (ITR-1) and Sugam (ITR-4). the official from the Department of Investment and ITR-1 is mainly for salaried individuals, ITR-4 is Public Asset Management (Dipam) said. for individuals with business income and also for Hindu Undivided Family (HUF) and partnership The Finance Ministry has budgeted to garner Rs firms. One can start filing returns from April 1, and 1.05 lakh crore from divestments during the fiscal. the last date is normally July 31. It has also been The government has already breached the budgeted decided to allow a person, who jointly owns a single fiscal deficit gap and the extent of the gap stands house property, to file his/her return of income in at 115 percent with four months to go. The official ITR-1 or ITR-4 Form, as may be applicable, if he/ declined to comment on the impact of such events she meets the other conditions. on the fiscal math. Surprising everyone, the Tax Department notified When asked if the strategic divestment in the the two return forms on January 3. In the notified Bharat Petroleum Corporation (BPCL) -which can returns, the eligibility conditions for filing of ITR-1 alone fetch the government over Rs 60,000 crore and ITR-4 Forms were modified with the intention if it were to sell its entire 53 percent stake-will be of keeping these forms short and simple with a completed this fiscal, the official said, ‘unlikely’. “We minimum number of Schedules. are not saying that for ourselves and our timelines are such that it should happen. But we know that Therefore, a person who owns a property in joint the process throws up surprises,” the official said ownership was not made eligible to file the ITR-1 or speaking on the sidelines of an event here. ITR-4 Forms.

Similarly, on Container Corporation (Concor) and For the same reason, a person who is otherwise not Air India as well, the official said that the sales will required to file return but is required to file return not go through in the current fiscal ending March due to fulfilment of one or more conditions in the 31. The official said the government is preparing seventh proviso to section 139(1) of the Income-tax the financial statements and getting the data Act, 1961 (the Act), was also not made eligible to file room ready for the sales, suggesting that such ITR-1 Form. aspects take time. Till now, the industry has sown “excitement” over the companies which are being The Seventh proviso includes conditions such floated, the official said, adding that there are as deposit of an amount or aggregate of the additional details which may be sought by potential amounts exceeding `1 crore in one or more current bidders. When asked about the strategic sale in accounts maintained with a banking company or a Shipping Corporation of India, the official said the co-operative bank; or expenditure of an amount or sale is at a certain stage and going strong. aggregate of the amounts exceeding `2 lakh by an individual for himself or any other person for travel - The Hindu BusinessLine, 03/01/2020

For they can conquer who believe they can. - Ralph Waldo Emerson Officers’ Voice, February 2020 31 to a foreign country; or expenditure of an amount the interests of not just the company and its or aggregate of the amounts exceeding `1 lakh shareholders but also of the chairman and MD towards electricity charges. themselves, as it embeds clarity of responsibility and accountability across the organisation,” Bajaj said. With this notification, there was concern that the “However, the choice of the individuals should be changes are likely to cause hardship for individual dictated by merit, above all else, and that ought not taxpayers. to be sacrificed at the altar of lesser considerations The taxpayers with jointly owned property were such as the relationship between them. Had SEBI worried that they will now need to file a detailed ITR not overreached with the latter requirement, Form instead of a simple ITR-1 and ITR-4. perhaps industry would have implemented the former on schedule,” he added. Similarly, persons who are required to file return as per the seventh proviso to section 139(1) of the A member of the Federation of Indian Chambers Act, and are otherwise eligible to file ITR-1, have of Commerce and Industry (FICCI) said the clause also expressed concern that they will not be able about the chairman and MD not being related had to opt for a simpler ITR-1 Form. The Income Tax caused a ‘lot of panic’ among promoters. Department said it decided to relax the norms after detail examination of the issues. “The issue was that Kotak committee didn’t recommend chairman and managing director can’t - The Hindu BusinessLine, 09/01/2020 be related,” said Sandip Somany, former president of FICCI. “70-80 per cent of Indian companies SEBI puts off Deadline for Splitting CMD Post are promoter driven. There is no such rule in any by 2 years part of the world. It takes 8-10 years to train our SEBI has postponed by two years the deadline for children to take over the business. This rule makes listed companies to comply with the rule on splitting it difficult to do succession planning.” the roles of chairperson and managing director. The In May 2018, the regulator had mandated deferral comes after intense lobbying and resistance that the top 500 listed companies should split from many top companies and industrialists to the roles of chairperson and MD based on the the original deadline of April 1, 2020, said people recommendations of the Uday Kotak committee on with knowledge of the matter. The capital markets corporate governance. regulator on Monday announced April 1, 2022, as the new date for implementing the rule. It did not Negative Development give a reason for the deferral. Monday’s extension irked corporate governance “Sebi had received many representations, including experts. “The extension of time, by two years, for from various trade associations, seeking more time. separating the positions of chairman and MD is a Considering the current economic scenario, Sebi negative development,” said M Damodaran, former has decided against putting additional compliance SEBI chairman. burden on corporates,” said a regulatory official, seeking anonymity. - The Economic Times, 14/01/2020

‘Panic Among Promoters’ Coming, uniform clauses in health insurance

Corporates and industry bodies said the biggest The insurance regulator issues draft guidelines, objection was to the condition that the chairman wants comments by January 25 and MD should not be related. Bajaj Auto managing director Rajiv Bajaj said this stipulation may have Insurance companies may soon have to offer uniform been a cause for concern. clauses in indemnity-based health products to simplify customer experience with standardised “I believe that splitting these roles better secures wordings for provisions such as claim settlement

Every thing is sweetened by risk. - Alexander Smith Officers’ Voice, February 2020 32 within 30 days the and cancellation of policies with will be forfeited in the case of fraudulent claims, a 15-day notice. Keen on bringing uniformity in the and any amount already paid against such claims wording of health insurance policy contracts, the shall be repaid by all person(s) named in the Insurance Regulatory and Development Authority policy. of India (IRDAI) has proposed to standardise some This move to standardise general clauses in health of the general clauses that are commonly used in insurance policy contracts comes soon after the indemnity-based health products. IRDAI unveiled a standardised health insurance “The objective of these guidelines is to standardise product, named ‘Arogya Sanjeevani Policy’, which the common general clauses incorporated in will be offered by health and general insurance indemnity-based health insurance (excluding companies. personal accident and domestic/overseas travel) - The Hindu BusinessLine, 13/01/2020 products covering hospitalisation, domiciliary hospitalisation and daycare treatment, in order to simplify the wordings of general clauses in the circular round up policy contracts and ensure uniformity and greater transparency,” said the draft guidelines issued by 01. Safe Keeping of Agriculture Jewel Loans - the IRDAI recently. The insurance company can Introduction of ‘Jewel Loan – Security Register’ also include other general clauses based on their and ‘Bin / Tray Card’. product design, it added. The regulator has sought (Priority Sector Division, H O Circular No. 705/2019 dated public comments by January 25. 02.12.2019) The draft norms To strengthen the monitoring system and also as a risk mitigating measure, a ‘Jewel Loan - Security The draft guidelines have incorporated the IRDAI’s Register’ and ‘Bin / Tray Card’ are introduced to oft-repeated directive to settle or reject claims within keep track of the inward / outward movement of 30 days, failing which, the insurance company will the Jewel loan pouches. The formats of Jewel loan have to pay a penal interest of 2 per cent above the security register and Bin/Tray card are furnished bank rate. In case of an investigation, the insurer as Annexure I & II of this circular. The operational should settle or reject the claim within 45 days. guidelines with respect to entering register / card In case of multiple policies taken by an insured are furnished in the circular. person, he or she shall have the right to settlement 02. Implementation of Uniform Banking Hours. of claim from any of the policies. (Resource Mobilization Division, H O Circular No. 706/2019 The draft norms have also proposed that dated 02.12.2019) policyholders can also cancel the policy by giving 15 To overcome the difficulties faced by the Branches days written notice, and the insurer should refund and to provide smooth customer services in premium on short-term rates for the unexpired extending cash transactions up to one hour before policy period. Similarly, for migration to any other closure of working hours of the Branch, it has been policy of the insurance company, the policy holder decided and informed that the Branches should can apply for it 30 days before the premium due extend cash transactions for four hours from the date. The insured person would have the option commencement of business hours up to lunch time to port the policy anywhere between 45 days to 60 and one hour after lunch. days of the premium due date. 03. Attempt to present fake Demand Draft [DD] of Rs.10.00 Crore by some unscrupulous persons. “The policy shall be void, and all premium paid (Financial Management Division, H O Circular No. thereon shall be forfeited to the company in the 707/2019 dated 03.12.2019) event of misrepresentation, misdescription or non-disclosure of any material fact,” the draft Bank has come across instances of attempts guidelines have proposed for Disclosure of made by some unscrupulous persons to encash fabricated and fake Demand Drafts. In this regard, Information by insurance companies. According to the precautions which are to be taken by the paying the draft guidelines, all benefits under the policy Officers’ Voice, February 2020 33 branch / office while making payment of Demand options made available in SARFAESI Repository is Drafts are reiterated in the circular. furnished in the circular.

04. Any official correspondence from the 07. Recording of Pension Payment Order [PPO] branches/offices of the Bank to RBI/other Number in the Pass Book of Pensioner/ Family Regulators shall be routed invariably through Pensioners. the concerned Functional Division at HO. (Government Business Division, H O Circular No. 717/2019 (Compliance Division, H O Circular No. 711/2019 dated dated 06.12.2019) 05.12.2019) Since, non-recording of PPO numbers is leading Head Office has recently come across an instance to problems like delay in commencement of family wherein one of the branches has, suo moto, pension, transferring of account from one bank/ addressed a communication directly to RBI’s branch to another bank/branch, etc., as advised by Central Office seeking their intervention on an the Ministry of Finance, Central Pension Accounting issue. In this regard, all our branches are advised Office (CPAO), all bank branches dealing with that any correspondence involving clarifications/ pension payments are instructed to record the PPO intervention by RBI/other Regulators shall numbers in all the Passbook of the pensioner/ invariably be routed through the respective family pensioners, without fail. Functional Divisions at Head Office and not to correspond directly with RBI. 08. Swachh Bharat Mission - Ban of Single Use Plastic (SUP). 05. Extending Corp Pay Elite/Delite facility to (Priority Sector Division, H O Circular No. 720/2019 dated Pensioners of Central/State Government and PSUs. 07.12.2019) (Marketing Division, H O Circular No. 713/2019 dated As suggested by the DFS, GoI, all our branches 05.12.2019) are requested to promote and practice source As per the feedback from the field, the scheme segregation and encourage curbing of Single guidelines to open Elite/Delite accounts has Use Plastic (SUP) products like Artificial flowers, been modified and henceforth, the employees banners, flags, flower pots, PET plastic water and Retirees of Central Government, State bottles, Plastic folders, trays etc., and also to curb Governments, Union Territory Governments and all type of plastic carry bags, plastic/thermocol Public Sector Undertakings (PSUs) who are drawing (polystyrene) disposable cutlery including cups/ regular gross salary/pension of Rs 15,000 or more, glass, bowls, glasses, forks, spoons, containers, straws etc., used for serving eatables/drinks. can open payroll accounts (Elite / Delite account).

06. SARFAESI Repository Module in Recovery 10. Modification in scheme guidelines under Plum Menu enabled to update SARFAESI actions Corp Kisan Credit Card Scheme- Documentation and storing / retrieving the related documents for renewal of Crop Loans. & photos. (Priority Sector Division, H O Circular No. 729/2019 dated 11.12.2019) (Recovery Division, H O Circular No. 714/2019 dated 05.12.2019) In view of the difficulties faced by the branches in renewing the crop loan accounts after completion Recovery Plum Menu is enabled to update of five years, viz., closure of existing account, SARFAESI actions and storing/retrieving the cancellation of earlier security and creation of related documents & photos. Plum Menu will auto fresh security with state revenue authorities, a populate all the information like CIF ID, account new consent letter is introduced, for continuation number, Security details, Valuation date, Value of of security and loan Account No. for renewal/ the security & description of the security in respect enhancement of CCCK accounts after completion of of SARFAESI eligible accounts Branch-wise. The five years. The detailed guidelines and the consent path and process flow of up-dation and various letter format are furnished in the circular.

A life both dull and dignified. - Sir Walter Scott Officers’ Voice, February 2020 34

11. Review of RLLR linked Interest on Education 15. Cash Handling Charges - Current Account Loans and Home Loans. Variants. (Integrated Risk Management Division, H O Circular No. (CASA Division, H O Circular No. 739/2019 dated 730/2019 dated 12.12.2019) 17.12.2019) In order to avail the benefit of guarantee cover for Based on feedback from Branches/Zones and as an the education loan accounts, up to limit of Rs.7.50 interim measure, full concession in cash handling lakhs, available under CGFSEL & CGFSD schemes charges had been extended to all the current and also to align applicable interest rate on Corp account holders who have maintained average Home loans extended to employees of Central & balance of Rs. 5 lakhs or more in their accounts. State Govt./ PSUs and Personnel of Indian Army/ The concession was marked in the system from Defence, the RLLR linked interest rate on Education Head Office with effect from 01.08.2019 for a period Loans and Home Loans are reviewed with immediate of 1 year. Further, full concession in cash handling effect. The revised new rates are furnished in the charges is extended to all Corp Privilege and Corp circular. Global II account holders. Other than the above two variants, cash handling charges will continue to be 12. Charge Handing Over and Charge Taking levied to the remaining Current Account variants. Reports. (Human Resource Management-PAD, H. O Circular No. 16. Revision in the Rate of Interest for loans 731/2019 dated 12.12.2019) under Corp Kisan Vehicle Loan Yojana. (Priority Sector Division, H O Circular No. 740/2019 dated Keeping in view the present-day banking operations, 17.12.2019) the existing charge taking Report format has been revised and a new ‘Charge Handing Over Report’ The Rate of Interest for loans sanctioned under as Part-A & ‘Charge Taking Report’ as Part-B Corp Kisan Vehicle Loan Yojana (CKVLY) linked to introduced. The procedure, time-frame as well as MCLR has been revised with effect from 15.10.2019. the report formats are furnished in the Circular. Revised Rate of Interest is detailed in the circular.

13. CGTMSE - Changing the ceiling of guarantee 17. Modification in Guidelines of Interest cover on outstanding basis. Subvention Scheme for MSMEs. (MSME Division, H O Circular No. 732/2019 dated (MSME Division, H O Circular No. 741/2019 dated 12.12.2019) 17.12.2019) Certain modifications in interest subvention scheme The maximum guarantee cover per borrower under guidelines for MSMEs, like dispensing of Udyog CGTMSE is in line with the definition of credit Aadhar Number (UAN) for GST registered MSMEs, exposure subject to the maximum cap of Rs 200 inclusion of trading activities without Udyog Aadhar lakh. Number and inclusion of units exempted from GST 14. Modification / Revision of Recovery Policy registration by submitting either PAN number of the Bank. or categorization of their loan account as MSME (Recovery Division, H O Circular No. 734/2019 dated by the Bank/ Branches to be eligible for Interest 12.12.2019) Subvention has been communicated.

The Board has reviewed and approved the 18. Updating of KYC details in CBS while moving an Recovery Policy of the Bank by incorporating account/CIF from inactive status to active status. certain Modifications/Changes. The modifications/ (KYC & AML Cell, H O Circular No. 743/2019 dated changes effected are furnished in the circular and 18.12.2019) all the branches are advised to go through the above Branches should ensure that complete KYC details modifications/changes thoroughly and ensure are made available in CBS at the time of opening of strict adherence/compliance to the guidelines CIF/account. Accounts wherein customer-initiated contained therein. transactions were not taking place in the last two

Man is his own worst enemy. - Cicero Officers’ Voice, February 2020 35 years and were moved to ‘Inactive’ status, complete with 0.25% concession in the interest rate has been KYC details are to be updated in CBS, while moving introduced. The modified guidelines which have an account/CIF to active status. come into effect from 26.12.2019are furnished in Annexure to the circular. 19. Deduction of TDS from Pension of Central Govt./Karnataka State Pensioners and withdrawal 23. Holidays – 2020. of Pensioner’s request letter for TDS deduction. (Resource Mobilization Division, H O Circular No. (Government Business Division, H O Circular No. 746/2019 762/2019 dated 31.12.2019) dated 23.12.2019) List of holidays for the Calendar year 2020 Branches to deduct TDS from monthly pension as declared under NI Act, 1881, by the various State prescribed by IT Department, collect form No.12BB Governments/Union Territories compiled as per along with supporting documents from Pensioners the respective Gazette Notification is attached as and enter the same in GBM module (only for the Annexure to the circular. pension accounts handled at CPPC). TDS Mandate Form as per Annexure-II of H.O Circular No 273/2019 retirements stands withdrawn. Branches to extend courteous services to the pensioners and any clarification/ queries raised by them on pension shall be taken up The following members will be retiring from with the CPPC by the concerned branch only. the services of the Bank on attaining the age of superannuation on 29.02.2020. 20. Credit Linked Capital Subsidy Scheme 1. Mr. S Madesh, Assistant [CLCSS] - Revised time lines for submission of Manager, Bidadi (Bangalore online applications. South) (MSME Division, H O Circular No. 747/2019 dated 23.12.2019) Sri Madesh joined the Bank Extension of timeline for submission of online in November, 1981 as Typist Cum Clerk. He was promoted claims under CLCS component of Credit linked to Officers’ Cadre in JMG Scale Capital Subsidy and Technology Up-gradation I in September, 2012. scheme (CLCS-TUS) and Special Credit Linked Capital Subsidy Scheme (SCLCSS) with the revised During 39 years of service, he time-line is furnished in the circular. worked at Bangalore - Regional Office, Cantonment, Hullahalli, Sakleshpur, Head Office - 21. Deposit Mobilisation - Window dressing of Balance Security Department, Advances Department, Commercial Sheet - at the Quarter end/ Financial / Year end Credit Department, Computer Policy & Planning Division, (Resource Mobilization Division, H O Circular No. 752/2019 Information Technology Division, Bangalore - CBB, dated 26.12.2019) Currency Chest, RPC Layout, Kengeri Satelite Town, Branches are advised to mobilize only stable Anekal and Bangalore - Service. Deposits/Advances and branches should not in any 2. Mr. B Ravindar, Senior manner resort to Window Dressing. An illustrative Manager, Hyderabad - list of practices, which amount to Window Dressing, Madannapet (Hyderabad) is furnished in the Annexure to the circular advising the branches to go through the list carefully and Sri Ravindar joined the Bank comply with instructions scrupulously. as Veterinary Officer in JMG Scale I in March 1983. He was 22. Corp Schemes – Modification to scheme promoted as Manager in MMG guidelines and introduction of Loan for purchase Scale II in February, 2000. He of Electric Vehicle. became Senior Manager in (Retail Lending Division, H O Circular No. 761/2019 dated October, 2006. 31.12.2019) During 37 years of service, he worked at Hyderabad The existing guidelines under select Corp Schemes - Regional Office, HO - Agriculture & Rural are modified and also new loan scheme for purchase Development Department, Toopran, Krishna, of Electric Vehicles under our Corp Vehicle Scheme Ookal Haveli, Secunderabad - M. G. Road, Officers’ Voice, February 2020 36

Nagpur, Nagpur - Sadar, Nizamabad, Vijayawada During 36 years of service, he worked at Kottayam, - Satyanarayanapuram, Zonal Office – Coimbatore Kanhangad, Mangalore - Bunder, Head Office - and Hyderabad - Personal Banking. Commercial Credit Department, Corporate Fin. 3. Mr. Srikrishna Govind Management Division, Mumbai - Marol S M E, Bhat S P, Assistant Manager, Bovikan, Kasaragod, New Delhi - Shalimarbagh, Puttur Darbe (Mangalore) Kannur, Head Office - Recovery Division, Indore and Chennai - Kelly’s Corner. Sri Bhat joined the Bank in June, 1983 as Typist Cum 6. Narasimha Kudva, Clerk and became Special Assistant General Assistant in March, 2008. Manager, Integrated Risk He was promoted to Officers’ Management Division, Cadre in JMG Scale I in Head Office September, 2013. During 37 years of service, he Sri Kudva Joined the Bank worked at Manipal, Puttur, Panemangalore Puttur as a Clerk in October, 1983. - Bolwar, and Sullia. He was promoted to Officers’ Cadre in JMG Scale I in 4. Anil Kumar Wats, November, 1988. He became Assistant General Manager, Manager in MMG Scale II in April, 1997 and Senior Zonal Office - Delhi [South] Manager in Scale III in November, 2005. He was Sri Wats joined the Bank as elevated as Chief Manager in SMG Scale IV in Agriculture Field Officer in December, 2014 and as Assistant General Manager JMG Scale I in August, 1983. in Scale V in May, 2017. He was promoted as Manager in MMG Scale II in June, During 36 years of service, he worked at Mumbai - 1995. He became Senior Service, Worli, Ahmedabad - Regional Office, Head Manager in Scale III in March, Office – Human Resources Department, Personal 2010. He was elevated as Chief Manager in Scale IV Admn HRD & Trg Division, PAD (Officers’ Wing), in June, 2014 and as Assistant General Manager in Doopadakatte, Udupi - Regional Office, Heradi, Navi Scale V in September, 2016. Mumbai -Currency Chest & SCD, Sector-15 Vashi Mumbai, Bhatkal, Head Office - PAD (PF, Gratuity During 37 years of service, he worked at Bhatinda, & Pension) and Treasury. New Delhi - Zonal Office, Kolhapur, Bahadurgarh, Patiala, Amritsar, New Delhi - Service, Dandevado, 7. Mr. Neminath Bhairu Pune - Zonal Office, New Delhi - Dilshad Garden, Metri, Manager, Yellur Mohali, Mahipalpur and Gurgaon - Retail Loan (Belgaum) Centre. Sri Neminath joined the 5. Mr. Rajan T V, Chief Manager, Zonal Office - Bank as a Clerk in March, Chennai 1984. He was promoted to Officers’ Cadre in JMG Scale Sri Rajan joined the Bank in I in March, 2002. He became November, 1983 as Typist Manager in MMG Scale I in Cum Clerk. He was promoted September, 2008. to Officers’ Cadre in JMG Scale I in December, 1996. During 36 years of service, he worked at Nippani, He became Manager in MMG Sankeshwar, Belgaum (Samadevigalli), Nagpur, Scale II in December, 2004. He Muttur, Belgaum - Zonal Office, Navalihal, was elevated as Senior Manager in Scale III in March Peeranwadi and Belgaum - Currency Chest. 2010 and as Chief Manager in Scale IV in July, 2014.

Do it now! Today will be yesterday tomorrow. Officers’ Voice, February 2020 37

8. Mr. Shinde Dattatray 11. Mr. Buddabathuni Mastan Ramu, Assistant Manager, Rao, Chief Manager, Zonal Sawad (Pune) Office - Vijayawada Sri Ramu joined the Bank in Sri Rao joined the Bank in April, 1984 as Typist Cum June, 1986 as Typist Cum Clerk. He was promoted to Clerk. He was promoted to Officers’ Cadre in JMG Scale Officers’ Cadre in JMG Scale I I in May, 2009. in November, 1998. He became During 36 years of service, he Manager in MMG Scale II in worked at Pune – Main, CBB, Shivaji Nagar, Zonal November, 2005. He was elevated as Senior Manager Office, Navasari, Pune - Hadapsar, Nasik, Gadkari in Scale III in August, 2012 and as Chief Manager Chowk, Niphad, Mumbai - Kalbadevi (PBB) and in Scale IV in June, 2016. Currency Chest. During 34 years of service, he worked at Adoni, 9. Mr. Ramakrishna, Senior Hyderabad - Hyderguda, Pune - Corpbank Homes Manager, Bangalore - RPC Ltd, Pune, Somala, Vijayawada - Main, Aratlakatta, Layout (Bangalore North) Kanpur - The Mall, Hyderabad - Gachibowli, Madhapur, Rajahmundry, Hyderabad - Retail Loan Sri Ramakrishna joined the Centre and Vijayawada -Benz Circle. Bank as a Clerk in February, 1985. He was promoted to He served as Organising Scretary in the 16th Officers’ Cadre JMG Scale I Executive Committee during 2004-2007 and as th in October, 2005. He became Assistant General Secretary in the 17 Executive Manager in MMG Scale II in Committee during 2007-2010. August, 2012 and as Senior B. VOLUNTARY RETIREMENTS Manager in Scale III in May, 2015. The following members retired from the Bank During 35 years of service, he worked at voluntarily, under Regulation 29 of Pension Cheekanahalli, Virajpet, KGF - Robertsompet, KGF Regulations during December, 2019. - Andersonpet, Tubagere, Belwadi, Kolar, Anekal, Bangalore - Bydarahalli Magadi and Rajajinagar. 1. Mr. Kolli Ajoy Kumar, Chief Manager, Hyderabad - 10. Balla Chitti Babu, Hyderguda (Hyderabad) Assistant General Manager, Zonal Office - Greater Mumbai Sri Kumar joined the Bank Sri Babu joined the Bank as a as an Officer in JMG Scale Clerk in October, 1985. He was I in October, 1983. He was promoted to Officers’ Cadre promoted as Manager in in JMG Scale I in September, MMG Scale II in March, 1992. He became Manager in 2003. He became Senior MMG Scale II in March, 2003 Manager in MMG Scale III and as Senior Manager in Scale III in March, 2010. in September, 2008 and as Chief Manager in SMG He was elevated as Scale IV in June, 2014 and as Scale IV in August, 2012. Assistant General Manager in Scale V in December, During 36 years of service, he worked at Head 2016. Office - Business Planning & Development During 34 years of service, he worked at Proddatur, Department, Management Services Department, Mumbai - Nariman Point, Secunderabad - M. G. Guntur - Regional Office, Ahmedabad - Regional Road, Chintakunta, Secunderabad - Gunrock Office, Chennai - CAPS, Account Section, Service, Enclave, Vishakhapatnam - Dwarakanagar, Bangalore - IBR Centre, Corpbank Homes Ltd., Jamshedpur - Godown Area, Aratlakatta, New Kogilu (Mission Road), Corpbank Securities Ltd Delhi - Vasundhara Enclave, Zonal Office - Jaipur -Mumbai, Bangalore - RTGS, Mumbai - Investment and Zonal Office - Thane. & International Banking, Hyderabad - Service, Officers’ Voice, February 2020 38

Hubli - Zonal Office, Davangere - P.B. Road and During 34 years of service, he worked at Honnavar, Mangalore - New Core Centre. Kundapura, Sagar, Head Office - ED Secretariat, Kolkata - CAPS, Bangalore - Fast Collection He served as Regional Scretary in the 10th Service, Padamanoor, Bangalore - Mahadevapura, Executive Committee during 1989-1991 and Jayanagar 9th Block, Ahmedabad - Zonal Audit again in the 12th Executive Committee during Office, Head Office - Vigilance Division and New 1993-1995. Delhi – Laxmi Nagar.

2. Ms. Shany P V, Assistant 5. Mr. Gurudatha Shenoy Y, Manager, Kodungallur Senior Manager, Permude (Kochi) (Mangalore)

Ms Shany joined the Bank Sri Shenoy joined the Bank in September, 1984 as as a Clerk in December, 1983. Typist Cum Clerk. She was He was promoted to Officers’ promoted to Officers’ Cadre Cadre in JMG Scale I in in JMG Scale I in September, November, 1997. He became 2014. Manager in MMG Scale II in December, 2004 and as Senior During 35 years of service, she worked at Kochi, Manager in Scale III in March, 2010. Varapuzha, Kochi - Regional Office, Angamaly, Elamakkara and Perumbavoor. During 36 years of service, he worked at Bangalore - Nurpathunga Road, Gokak, Head Office - HRD 3. Mr. Aravindakshan & Training Division, Sangli, Kogri-Shanthigrama, K, Assistant Manager, Delhi - Zonal Audit Office and Head Office - Ernakulam - Ravipuram Inspection & Audit Division. (Kochi) 6. Mr. Jagadish Nayak, P, Sri Aravindakshan joined the Assistant General Manager, Bank in December, 1993 as Head Office - PAD (Officers’ a Peon. He was promoted as Wing) Clerk in August, 1999. He became Officer in JMG Scale I Sri Nayak joined the Bank in April, 2015. in December, 1987 as Typist During 26 years of service, he worked at Tirur, Cum Clerk. He was promoted Kallur, Mukkilapeedika, Nhamanghat, Arattu to Officers’ Cadre in JMG Puzha and Zonal Office - Kochi. Scale I in February, 1996. He became Manager in MMG Scale II in July, 2004 and 4. Mr. Raghunatha Bhat, S, as Senior Manager in Scale III in September, 2008. Assistant General Manager, He was elevated as Chief Manager in SMG Scale Shimoga (Udupi) IV in September, 2012 and as Assistant General Sri Bhat joined the Bank in Manager in Scale V in June, 2019. March, 1986 as Typist Cum During 32 years of service, he worked at Head Clerk. He was promoted to Office - Industrial Relations Department, Udupi Officers’ Cadre in JMG Scale I - Regional Office, Manipal, Head Office - PAD (IR in February, 1996. He became Wing & Disc. Cell), Kolhapur, Alevoor, Anand, Head Manager in MMG Scale II in Office – PAD (MPRS) and Udupi - Zonal Office. July, 2004 and as Senior Manager in Scale III in September, 2008. He was elevated as Chief Manager CBOO thanks all these members for their in SMG Scale IV in August, 2012 and as Assistant support and co-operation and wishes them a General Manager in Scale V in January, 2016. Happy, Healthy and Contented retired life.

Condemn the fault, and not the actor of it. - William Shakespeare Officers’ Voice, February 2020 39

Class room

Operation Twist

Since last week, a fascinating code name has been — the 10-year G-sec yield — rallied to 6.8 per cent trending on the Internet — Operation Twist. Rolled last week. Clearly, the MPC decision to pause repo out by the RBI, this seemingly secretive mission is rate cuts didn’t help, with a spike of 33 basis points all set to ignite the bond market — without the use coming in after the MPC meeting on December 5. of any fireworks, that is. As the name suggests, this High market yields on the 10-year G-sec influence operation was aimed to work like a plot twist. But bank lending rates on vehicle, housing and other what is the ‘twist’ all about? long-term loans, hurting retail borrowers. This What is it? seems to have prompted the RBI to compensate for its unexpected pause on December 5 with the Operation Twist is the name given to a monetary surprise announcement of Operation Twist. Though policy tool that the US Federal Reserve had initiated the amount of securities bought/sold on December to influence the prevailing rate of interest in the 23 was only worth ?10,000 crore, the bond markets markets. The tool essentially aims at changing the still welcomed it with a big cheer. This was in shape of the yield curve (hence the name — twist) anticipation of several such announcements in through simultaneous buying and selling of long- future. Post the announcement, the 10-year G-sec and short-term government bonds. In India, the yield dropped by 20 basis points on intra-day trade RBI put through its version of Operation Twist on to 6.6 per cent while the yields on shorter tenure Monday by buying ?10,000 crore worth of 10-year bond (five year) rose 16 basis points to 6.67 per government bonds while selling four shorter-term cent, making for a flatter yield curve. That also helps government bonds adding up to the same value. bring down borrowing costs for the government. The intent is to moderate high long-term interest rates in the market and bring them closer to the Why should I care? repo rate. If you’re a fixed income investor sitting on a debt- In the US such tactics were first used in 1961, when heavy portfolio, softening yields of long-term the economy was recovering from recession post the bonds may help your portfolio get back into the Korean War. In order to boost spending, the Federal green. There is good news in store for consumers/ Open Market Committee (FOMC) tried to flatten the borrowers as well. The high yields on long-term yield curve. A flatter yield curve reduces the excess government borrowings had led to banks pricing compensation that bond holders earn for the added their retail loans at high rates. These loans can now risk of holding bonds for a longer tenure. be expected to get slightly cheaper with Operation Twist. Cheaper retail loans can boost consumption Why is it important? spending which accounts for a good chunk of the Despite a cumulative reduction of 135 basis points GDP. in India’s policy repo rate since January 2019, The bottomline banks have effected a decline of just 40-47 basis points in their weighted average lending rates in the Santa may have arrived early for bond holders with same period. Even the mandatory linking of bank Operation Twist. But if there’s an overshoot in the lending rates to an external benchmark (including inflation and deficit numbers, you may need to the repo rate) has not helped. With growing watch out for other twists in this tale. concerns over fiscal slippage and rising inflation, - The Hindu BusinessLine, 24/12/2019 the key market interest rate that everyone tracks

One good turn deserves another Officers’ Voice, February 2020 40

health watch

Babies of mothers who have had chickenpox are more immune

A team of researchers have discovered that viral positive, 16.9 per cent babies were positive and 18 DNA gets transferred to babies, giving them longer per cent borderline-positive. protection. As far as DNA tests went, they were performed Children whose mothers have had chickenpox only on 73 mother-baby pairs as PCR testing is may be naturally more immune to the disease as expensive, the authors said. It was revealed that compared to kids who are freshly exposed to the mothers who have had VZV infection in the past virus. can transmit free-floating VZV DNA and antibodies to their babies. The researchers observed that This is because the babies born to the mothers babies of those mothers whose viral load was high who had contracted the disease in the past may had higher loads of viral DNA. This is a good thing, harbour viral DNA in the blood, according to a the authors said. study published in the journal Viral Immunology on Monday. Viral DNA transferred A group of Delhi-based paediatricians from St The present understanding is that mothers provide Stephen’s Hospital and scientists from the National their babies protection against a variety of common Institute of Immunology (NII) studied pairs of 350 infections, by transferring ready-made antibodies mothers and their newborns between June 2016 to them. “Such protection to the baby lasts for 12 and June 2017 to ascertain this. Those mothers to 15 months, but we have discovered that even who had received blood transfusion during viral DNA gets transferred to babies,” Puliyel said. pregnancy or were vaccinated against chickenpox “Thus, babies develop more long-lasting active were not included. immunity with the transfer of chickenpox DNA First such study from mothers — more than the short-term passive protection provided by the transfer of ready-made This is the first time ever that experts have studied antibodies,” said Pramod Upadhyay, Scientist at the DNA of pregnant mothers and their babies for NII. presence of chickenpox virus. The paper assumes that in cases where babies “We have concluded that stress caused by have high viral DNA, active antibodies are actively pregnancy can reactivate hibernating virus to developed; however, it says that the exact nature of start freely floating in the mother’s blood. This is antibody-viral DNA interaction should be studied called ‘viraemia’. It is known that stress can induce in further detail. “This also explains why chicken viraemia in astronauts or in patients that undergo pox is a mild infection at less than fourteen years surgery, but this is for the first time that this has of age,” the study states. been ascertained in pregnant women and their babies,” said Jacob Puliyel, co-author of the study. Puliyel said, “Kids till the age of 14 develop milder form of chickenpox, as perhaps transfer of viral DNA Chickenpox is spread by varicella-zoster virus from their mothers accords them more strength to (VZV), and so VZV DNA and antibodies (which develop active long-lasting immunity. As an adult fight off the infection) were isolated in the mother- though, that immunity may wean away, which baby pairs from their cord blood and their levels explains why adults develop more serious versions were analysed. Two tests were run on the blood — of chickenpox, like shingles, at 60 or 80 years, antibody blood tests and polymerase chain reaction which is more painful.” tests for DNA. While 15 per cent of all mothers had antibodies, and 16 per cent were borderline- - The Hindu BusinessLine, 18/12/2019

Our todays and yesterdays Are the blocks with which we build - H W Longfellow Officers’ Voice, February 2020 41

Implementing India’s Great PSB Merger is Proving to Be a Giant Headache Reproduction of the article from The Wire, online financial journal by Sri T R Bhat

Four months after the fresh round of mergers was consultant on tow to guide the deliberations. I learn announced, the managements of the individual that similar exercises are on in the other three banks are deeply immersed in working out the groups respectively led by Punjab National Bank, modalities of integration. Canara Bank and Indian Bank.

It has now been a little over four months since A series of what are called ‘town hall meetings’ the government announced a new round of mega- were held in major centres where the CEOs of the mergers of public sector banks (PSBs). At the time, AB and the MBs assured the invited customers the merger of the ailing Dena Bank and the healthy that their interests would be safeguarded. Branch Vijaya Bank with the trembling Bank of Baroda managers were mandated to bring account-holders (BoB) – announced in 2018-19 – was still very much to such meetings. The meetings with staff members a work-in-progress, while its perceived gains were allegedly saw very thin attendance as most unions still far away from being realised. opposing the mergers gave calls to stay away from them. A fresh round of mergers of 10 PSBs of varying health and cultural diversities announced on Before examining the impact of these exercises, it August 30, 2019 was, therefore, not opportune, is pertinent to study the performance of the PSBs given the urgency of addressing the issues of bloated during recent months. non-performing assets (NPAs) and consequential Performance in September 2019 losses suffered by the merger candidates including the anchor banks. Four months behind us, what How was the overall performance of PSBs during is the status of the merger process? As anticipated, the half-year ended September 2019? the managements of the individual banks are Data published earlier by the RBI shows that deeply immersed in working out the modalities of between September 2018 and September 2019, integration. the credit portfolio of PSBs expanded from Rs 55.5 As in the case of the merger of Dena and Vijaya lakh crore to Rs 56.6 lakh crore (1.84%) but their Banks with BoB, formal board ratifications of the share in the total credit of the banking sector came fresh mergers were obtained in September 2019, down from 61% to 57%; the gross NPAs came down confirming that bank boards are puppets of the from Rs 9,92,964 crore to Rs 9,18,487 crore and government. The CEOs and the general managers the operating profits increased by about 74%. The keep meeting regularly. Several committees number of PSBs under RBI’s Prompt Corrective involving middle and senior executives of banks Action (PCA) framework has come down from 11 of each group have been set up with a mandate to in November 2018 to four now, signifying a steady study and realign each other’s systems, processes, improvement from the regulator’s point of view. IT platforms, products, organisational structure The question, however, is: can this improvement and human resources systems. be sustained? For example, in the case of Union Bank of India The RBI’s latest ‘Report on the Trend and Progress (UBI) as many as 28 functional committees are now of Banking in India 2018-19’ provides some clues. working with equal representation for the anchor According to the central bank, credit off-take is bank (AB) and the two merging banks (MBs), ‘subdued’ as ‘evident from the slowdown in the namely, Andhra Bank and Corporation Bank. flow of resources, both from the banks and the During mid-2019, there was a huge gathering of non-banks to the commercial sector in the first about 80 top executives of these three banks for two half of 2019-20’. There is, the RBI confirms, ‘a days in Thiruvananthapuram, with a multinational reluctance to lend which is exacerbated by credit

Affection is the broadest basis of a good life. - George Eliot Officers’ Voice, February 2020 42 defaults and increasing frauds’ (emphasis added). branch managers are not taken. This development, it concludes, is ‘worrisome’. The F Middle and top-level decision makers are Financial Stability Report, December 2019, further preoccupied with the endless meetings and reinforces this view. Rating agencies like Fitch and video conferences day in and day out; the credit ICRA too have forecast that credit growth in the proposals which come under their purview are current year will be slower. hardly entertained. With the severe economic slowdown, the loans to F Exercises are on to ‘rationalise’ branches, the MSME sector are deteriorating in quality as per meaning merger of branches close to each new reports. PSBs under PCA have been reluctant other. to entertain credit proposals from this sector adding to its misery. As a result, renewal of rent agreements on branch premises is kept on hold. Internally too, banks had not recognised some large loans as NPAs. During 2018-19, eight PSBs had The machinery on follow-up of stressed assets and under-reported their NPAs to the tune of Rs 24,000 recovery is currently stymied for the same reasons. crore. Apart from the giant SBI, there are among The collective impact of all these is increasingly them, PNB, UBI and Indian Bank - three of the four visible in the form of very sluggish deposit and credit anchor banks which will merge five other PSBs with expansion among the banks under the process of themselves. Additional provisioning for these NPAs amalgamation. will further dent their profitability in the current financial year. IT and HR Issues

The disappointing performance, the gloomy More vexed issues are those related to IT and forecasts, the reluctance to lend and the economic human resources management (HRM). In the area slowdown - all these developments make the times of IT, the integration of even identical technology harder for the PSBs. Will the weakened anchor platforms is not as simple as it is projected to banks be able to absorb the ailing merging banks? be. Within each group, the banks have different versions of what is deemed as common software. Impact on the business of merging banks To illustrate, every PSB has its own numbering While the macro-level status is available in the system for its deposits and loan accounts. To both public domain through the RBI data and views the staff of the MBs and the customers it will cause of several agencies, at the individual bank level serious stress in internalising the likely changes. the merger exercise has virtually put the regular During this time there could be further alienation banking business on prolonged paralysis. of existing customers.

My frequent interactions with several executives of The staff of the MBs will also need to unlearn PSBs and trade union activists reveal the following what they have been doing until the merger and areas of concern: learn the new versions of the software in vogue in the AB. Considerable manhours need to be spent F More often than not, new accounts and deposits in upgrading the skills of the staff of the merging are not entertained. Knowledgeable customers banks. shun approaching the branch managers as they apprehend that after the merger the HRM is a complex issue. A host of questions complexion of the relationship will undergo related to transfers, promotions, placement and change. disciplinary proceedings keep coming up among the staff of the MBs. The finance minister has F During the transition, no manager desires claimed that there will not be staff retrenchment, to take the risk of accountability from a post-merger. The SBI experience contradicts such new management and therefore some credit a claim. As per reports, the headcount in SBI after decisions which are within the powers of the

There is always danger for those who are afraid of it. - Bernard Shaw Officers’ Voice, February 2020 43 the merger of its associate banks has actually come the decision making at the ground level with direct down from 2,64,041 in March 2018 to 2,57,252 in impact on` customers. March 2019. BoB has issued public notices of its The disciplinary machinery of PSBs has a bank- intention to close some of the former Vijaya Bank specific structure which operates within the branches. framework of a standardised compendium of More than the likely staff cut down, what worries conduct and discipline regulations applicable to the staff is the almost certain dislocation. It is learnt all PSBs. When different structures have to be that the representatives of the ABs have indicated harmonised, the follow-up action on pending cases in the meetings of the functional committees that gets derailed. With disturbing recurrence of frauds officers up to Scale IV (middle level) will notbe where the people within are allegedly involved, disturbed. That is impractical. Taking the example quick action is warranted. A derailed disciplinary of Corporation Bank, it has over 750 employees mechanism can have a long-term impact on both in its corporate office in Mangaluru. Once the the banks and their staff who are innocent. merger is completed, as in the case of Dena Bank’s There is also palpable anxiety among the staff of headquarters in BKC, Mumbai, the corporate office MBs. The experience of the alleged ill-treatment loses much of its role and logically, the staff there of former Vijaya and Dena Bank employees by the become redundant. Redeployment of redundant executives of BoB triggered a serious protest from employees and a fresh scheme of voluntary the Bank of Baroda Officers’ Union as recently as retirement (VRS) become imperative. September 2019. The news of this kind does cause concern among the staff affected by the current An issue of anxiety is the impact on the existing merger exercise. policies governing the transfer of officers. Under In addressing these crucial issues, the main the extant agreements, after a predetermined term stakeholders, namely the employees need to be in a different state, an officer can opt for transfer taken into confidence. That is not happening. And to her state of domicile and remain in that state till the unions of both workmen and officers are still her promotion. After the merger, such repatriation daggers drawn with the respective managements becomes difficult as priority could be given to the and the Ministry of Finance. A consensus that is staff of the AB. The officer/s who have already critical for a smooth HR integration thus remains completed their terms in different states may have elusive. to wait until vacancies arise to get back to their home state/s. The current study confirms that given the present economic slowdown and the need for activating In the PSBs, promotions from one level to the next the engine of economic activity, forced merger level take place periodically as per agreements (including the one of 2018-19) of 13 PSBs into with the recognised unions. With the merger, the bigger five is a serious disruption to the working agreements of merged entities lose their validity of the industry with no tangible positive results in and fresh agreements need to be entered into with the foreseeable future. During the abnormal times the unions. New agreements do not get signed the economy is in today, such disruption can be overnight. As a result, the promotion process will counterproductive. It will take much longer time get derailed for quite some time causing serious to stabilise and yield positive benefits. The longer heartburn among a large number of aspirants. the time, the heavier will be the price in terms of Selection and placement as branch managers will prolonged derailment of the engine of economic also get postponed until the integration of HR growth and consequently nursing the PSBs to systems is completed. Identifying the strengths robust health. and weaknesses of officers of MBs for considering [The author was Joint General Secretary of All India managerial assignments can get bogged down Bank Officers’ Confederation from 1995 to 2009 unless the top executives of AB and MBs are and doyen of trade union movement in Corporation able to evolve a transparent process of selection. Bank. He served as General Secretary from 1981 Aspiring youngsters who are left behind could get to 1993, as President from 1993 to 2007 and as demotivated. This will have a long-term impact on Chairman from 2007 to 2010]. Officers’ Voice (RNI, Delhi Regn. No.KARENG/ 2005/14831) Postal Regn. No.MNG/128/2018-20 Licensed to Post Without Prepayment under Licence No. SK/WPP/MNG/115/2018-20 Office of Posting: Post Office, Kankanady – Mangalore Date of Posting : 1st of every month Annual Subscription for members: Rs.60/-

IN LIGHTER VEIN

Raju Paul

If undelivered please return to : Corporation Bank Officers' Organisation, 106, Lobo Prabhu Court, Light House Hill Road, Mangalore - 575 001