OFFICERS’ ASSOCIATION (REGD.) (Affiliated To AIBOC / AINBOF) GENERAL SECRETARY’S OFFICE

President : 098188 21395 Lawrence & Mayo House General Secretary : 098207 27894 4th Floor, 276, D. N. Road, Secretary : 098863 51375 Fort, - 400 001 E-mail : [email protected] Phones : 022 - 2207 8457 Website : www.sboa.org.in Fax : 022 - 2207 0383 Circular No. : 06/ 2016 Date : 07.07.2016. (PLEASE CIRCULATE TO ALL MEMBERS / OFFICERS) Dear comrades, STRIKE PREPARATIONS As you are aware, after series of action programmes, we are in the second phase of our agitation, as decided by the UFBU against the various initiatives of the Government which are aimed at wiping out the public sector banking system in the country. The action programmes to follow are i. 19th July 2016 - Save Public Sector Banks Day - Rallies and distribution of pamphlets on the need to protect Public Sector Banks ii. UFBU Convention in New Delhi during the second fortnight of July 2016 iii. Letter from UFBU to all the Members of Parliament iv. 29th July 2016 - ONE DAY ALL INDIA STRIKE In this context we are reproducing below the Editorial of Common Bond (Editor :Com Harvinder Singh), the official publication of AIBOC, for the month of July,2016 for the information of our members. QUOTE : The Confederation has taken up the task of organizing the industry wide strike on 29th July 2016 on a war footing. The strike is for protecting the public sector character of banks and also against the ill-advised moves of the Government towards the privatisation of the public sector banks in the name of consolidation. The Confederation has been protesting against the various moves of the Government which aims at handing over the management of the Banks to Bureau of Banks Board set up as per the recommendations of Dr. P.J. Nayak as dictated by the with the sole objective of privatising the Indian banking industry and to hand over the same to the multinationals as well as the industrialists in our country. The UFBU after detail deliberations has decided to observe one day protest strike on 29th July to draw the attention of the Government and to compel them to reverse some of their initiatives in regard to the so called reformation in banking industry. A series of action programmes have already been observed and the second phase of the action programme is on, before the day of the strike on 29th July 2016. The policies of the Government, more particularly in regard to the Public Sector units of our country are against the interest of the common man of the country. In order to draw the attention of the public towards these ill-advised moves, the Confederation has also taken up the campaign of "Save Public Sector" which has attracted the attention of the media all over the country. The Central Trade Unions have also decided to observe a series of programmes against the economic and industrial policies of the Government. The strike also intends to show the strength of the solidarity and unity amongst the working class in the country and also to highlight the several anti-labour policies which is sought to be implemented by the Government. The Central Trade Unions have therefore decided to observe one day countrywide strike on 2nd September 2016 as a mark of protest against the various policies of the government which are detrimental to the interest of the common man. The move of the Government to bring several changes in the labour laws has also evoked all round criticism and the best example has been the lightning strike by the garment workers in Bangalore recently against some of the amendments that was proposed by the Government relating to EPF withdrawals etc. The Central Trade Unions are concerned with the various attitude of the Government and their going ahead with the changes in the labour laws without taking the unions into confidence that has widened the gap between the Government and the Central Trade Unions. The Confederation has been participating in all the struggles that were launched by the Central Trade Unions under the broad platform of unions and extending their solidarity to their cause. It is in this background, the Confederation has declared their support to the 2nd September strike and decided to participate in the same. In the meanwhile, the UFBU also considered the issue and has decided to take a view on the participation in the strike after obtaining the views of their various constituents, since they wanted time to consult their respective Executive Committee before offering their views/support on the 2nd September 2016 strike. The executive Committee of the Confederation has decided about its participation much earlier to these developments and hence our preparations have already commenced on a war footing to make the strike action a grand success.

The reports received from all over the country indicate that the preparations for the 29th July strike are highly encouraging. The demonstrations have been held all over the country as per the action programme already given by the UFBU. The Confederation has also taken up the campaign for the 2nd September, 2016 strike on a war footing and there has been tremendous response from the media as well, towards these struggles launched by the trade unions in the country.

The Strike is only a symbolic protest. In case the Government fails to take the message of the strike and respond positively, the unions both in the banking as well as the Central Trade Unions would be compelled to escalate the agitation to arrest the speed with which the Government wanted to initiate its own agenda towards the privatization of the public sector units as a whole.

UNQUOTE We call upon all our members to whole heartedly involve and participate in the programme of "Save Public Sector Banks Day" on 19th July, 2016 and the strike on 29th July, 2016 and 2nd September. 2016.

Further, as a part of "Save Public Sector Campaign" programme, AIBOC has decided to submit memoranda signed by all the members to the Hon'ble Prime Minister. The draft memorandum is annexed to this circular. We request all our members to sign the memorandum and send to us for onward submission, in one lot, to AIBOC who will submit the same to the Hon'ble Prime Minister.

With greetings, Yours comradely,

(SANJAY A MANJREKAR) GENERAL SECRETARY SYNDICATE BANK OFFICERS’ ASSOCIATION ...... ZINDABAD ALL INDIA BANK OFFICERS’ CONFEDERATION ...... ZINDABAD ALL INDIA NATIONALISED BANKS OFFICERS’ FEDERATION ...... ZINDABAD BANK OFFICERS’ UNITY...... ZINDABAD WORKING CLASS UNITY ...... ZINDABAD

2 MEMORANDUM AGAINST ANTI PUBLIC SECTOR, ANTI PEOPLE & PRO CORPORATE POLICIES We are an apolitical and largest supervisory Organisation of Bank Officers' working in the Public Sector, Old Generation Private Sector, Regional Rural and Cooperative Sector Banks in the country. We have chosen this career not only as a medium of our livelihood but have made it a passion to reach to common man, downtrodden and poorest of the poor with an objective to bring them up to the main stream through implementation of schemes of the Government and our hand holding. Nationalisation of 14 major Banks in 1969 was a significant historical move by the Government with the objective of extending the banking services to neglected sectors of the Society and dismantling the concentration in the hands of few corporate houses. Phenomenal success of the endeavour encouraged the Government to nationalise 6 more banks to enhance the reach of PSBs to remote rural areas. The concept of agricultural lending and priority sector lending have done a yeomen service to uplift the economically backward sections of the Society. Expansion and growth of banking post-nationalisation is largely responsible for economic growth and development in India. The role of PSBs has been applauded in ensuring growth of not only neglected sectors of economy and society but also of the Corporate Sector. It is really shocking that the banking institutions in Public Sector which played pivotal role in nation building are sought to be weakened and dismantled by few champions of Private Sector with an eye on public savings with vested interest. As a responsible organisation of officers in the banking industry having long term interest in PSBs, we consider it to be our bounden duty to highlight the pitfalls of such moves. MERGERS AND CONSOLIDATION It was in the year 2004-05, the then Finance Minister stated in Parliament that the Government did not plan consolidation and mergers of PSBs. Accordingly, it was put on back burner for good reasons. The move by NDA government to rack up the issue of merger of PSBs afresh is aimed at weakening and destroying Public Sector Character of our banking institutions that have stood test of time by not only helping the country register impressive growth but also insulating the PSBs from onslaught of several financial tsunamis which were imported by US, Europe, Gulf and other countries through the channel of integrated economies. "Too big to fail" has proved to be a hollow slogan in the financial sector in the wake of 2008 U.S. financial crisis which witnessed the fall of several global financial giants. We need to learn valuable lessons from the same. We are of the considered view that Indian Banking system needs to be strengthened by bringing about efficiency in operations, leveraging technology, talent, time and capital. Mergers and Consolidations are not the solution for the present ills of PSBs. It would rather promote Private Sector Banking as mergers will lead to closure of several branches and create a space and scope for opening of new branches by foreign and private sector banks. The move of the government to merge and consolidate PSBs needs to be opposed as a national priority. BANKS BOARD BUREAU/BANKING INVESTMENT COMPANY The decision of the government to set up BBB and BIC is aimed at Government control over banks without any accountability. The performance and governance of banks is subject to onsight and offsight monitoring by Reserve whereas the appointment of full time directors on the Board is done through an  experts' panel. Both can be strengthened to enhance their effectiveness and people appointed to BBB could

Please Cut Here well be considered to be nominated to experts' panel. Entrusting the job of evaluating governance and performance of the Bank's Board to BBB is undermining the capabilities of RBI which is rated as the best banking regulator in the world. Moreover multiplicity of controls over PSBs will lead to confusion and conflict which will further entail wastage of time and resources while adversely impacting their competitiveness at market place. The objective of BIC is to sell equity to private parties and gradually handover the control of PSBs to Corporate Houses. It will be a financial disaster and will hasten restoration of concentration in few hands and also neglect to poor, socially and economically backward sections of the society. Such a move will also cripple the ability of Governments to implement its people oriented schemes and programmes through banking channels. ON TAP LICENSING FOR UNIVERSAL BANKING RBI has granted licences for differentiated banks viz., Payment Banks and Small Finance Banks. It has also granted licences to two entities (Bandhan and IDFC) to start full fledged banks. Issuing guidelines for on tap licensing for universal banks is another move by RBI to enhance the level of competition in banking space. If this is the wise move, the proposal to merge and consolidate PSBs and reduce the number of competitors defies logic and common sense. It thus exposes contradiction between Government and RBI on important policy issues. Universal banking which started in India in mid 90s has been a bitter experience for commercial banks which did not possess the skill sets to evaluate capital intensive long gestation projects in infrastructure and core sectors. It is time to divest commercial banks from long term financing and revive/create term lending institutions instead. NON-PERFORMING ASSETS Burgeoning NPAs are largely the making of the policies of government and a handful of irresponsible 1 politicians who have vitiated the loan repayment culture in the country by organizing loan melas, debt waiver and debt relief schemes in the lower segment and not strengthening the legal system and providing loop holes for large corporate to get away with huge bank loans fraudulently. Vijay Mallya and Kingfisher Airlines is only a drop in ocean. NPAs at Rs. 3.61 lakh crores are largely contributed by those borrowers who have taken loans above Rs.5 Crores. Small borrowers are still relatively honest. NPAs have major impact on the capitalization of the banks as it erodes the capital of the bank on one hand and impedes the capacity of the bank to raise fresh capital from the market. There is need to strengthen the skill sets to help improve the loan appraisal system, legislate to make loan recovery measures more stringent and improve efficiency to reduce transaction cost. These measures will help in better capitalization of PSBs. Quality of manpower and appropriate skill sets are vital for better health of PSBs. But deep reduction in training budget by most of the PSBs in the wake of deteriorating profitability stands in sharp contrast to the recommendations of Gyan Sangam. INTEREST RATE POLICY The fundamental rule of business profit is to "minimise the cost and maximize the revenue". But in the context of Indian Banking it is modified to be - "minimise the revenue and maximise the cost". An excessive focus on interest rate reduction on corporate loans has been coupled with simultaneous reduction of interest on deposits in the era of liberalisation. This is one of the major causes of narrowing spreads for banks. There is need to fix market driven interest rates on deposits which afford protection and hedge to depositors against inflation and rising cost of living. It is cruel economic sense to make small depositors cross subsidise large corporates. Forcing banks to transmit reduction in repo rate to lending rate is illogical as bank borrowing at repo rate constitutes about 2% of bank's resources and does not have any significant role on cost of funds. Borrowing at repo rate is essentially a tool to help banks manage liquidity and not the cost. The concept of risk based pricing of loans as professed by RBI and Government is another area of concern and calls for learning lessons from US sub-prime lending crisis-2008. There is a need to put a cap on sub-prime lending to ensure a healthy credit portfolio. A temptation to charge unreasonably higher interest would entail disproportionate exposure to high risk loans with greater potential to slip into NPA. RBI and banks need to do tight rope walking and exercise prudence. RISK MANAGEMENT The framework of risk management in the banks has been evolved by RBI. Basically effective risk management in lending operations must ensure safety of bank loans and advances. But if growing magnitude of NPAs is any indicator, the risk management tools have proved to be quite ineffective. So to say, in present conditions, bank loans are risk management neutral. There is need to put collective wisdom to better use and revert to common sense banking of yester years sans long gestation project financing while using technology as an enabler to bring about efficiency in operations and customer service. SPLITTING THE POST OF CMD It is ironical that the Government of India is wasting its resources on revamp of PSBs where the only area of concern is growing NPAs. The analysis reveals that there are different strategies including strengthening the legal framework for recovery of bank dues and improving the repayment culture of the corporates and public which need urgent attention and the Government and RBI need to single-mindedly focus on these aspects. If NPA management in PSBs can be optimized, the Government and RBI would not have to worry about the health of the PSBs which would develop into the self sustaining business models. All the PSBs are equipped with robust technology and talented manpower which are two essential ingredients for the success of any service industry - including banking. The peripheral interventions of splitting the posts of Chairman and Managing Director are only cosmetic in nature and have only witnessed growing volumes of NPAs, erosion of capital, declining profits and deteriorating overall performance of PSBs. This calls for restoration of an internal and home grown CMD with better understanding of bank's culture, business, people and clientele. In view of the above facts, We urge upon the Government to drop its agenda of anti-people, anti-Public Sector, anti-poor, pro-corporate policies as a healthy banking system is needed for a healthy economy on a sustainable basis. With a request for personal indulgence and with Respectful Regards, Yours faithfully,

S.No. Name Bank Branch Signature 1 Syndicate Bank 2 Syndicate Bank 3 Syndicate Bank 4 Syndicate Bank 5 Syndicate Bank

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