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Friday, October 31, 2014

Bankers Strike In November

Call for all-India bank strike on Nov. 12-The Hindu

Bank employees said the discussions on the wage revision were being stalled and stymied by the Indian Banks’ Association.

Several employees of banks around the city gathered around the State Bank of India main office here on Thursday demanding an “appropriate” and “immediate” wage hike.
To press for their demands, United Forum of Bank Unions (UFBU) has called for an all-India bank strike on November 12, as well as a strike in the Southern Zone (including Karnataka) on December 2.
Bank employees said the discussions on the wage revision were being stalled and stymied by the Indian Banks’ Association.
‘No progress’

UFBU, which represents five workmen unions and four officers’ associations, has been in talks with the association since January 2013 to chalk out an acceptable wage increase. However, the union said there was no progress in the talks due to the “callous” attitude of the association that has seen talks take place only once in two months.
A release said IBA’s offer of 11 per cent increase was too little to counter the high inflation and the increased difficulties faced by workers.
Staff efforts

The Union said even though banks were short staffed, employees have “successfully” steered schemes such as the financial inclusion programme Jan Dhan, among others.

By We Bankers

Activists of We Bankers are Facebook Tigers

You all have seen that those who call themselves as Majority and Mighty Union call We Bankers Activists as Facebook Tigers.

Today in Historical City of Trade Union Movement Kanpur-mighty union d...
ecided to demonstrate at the same place We Bankers had announced i.e. Punjab National Bank Circle Office, Kanpur. Their Demonstration was scheduled for Lunch time between 2.30 to 3 PM and ours at 5 PM.

Let you all see the pictures and decide yourself.

The sad thing is that instead of vacating the place for us, they keep occupied the place converting their demonstration into Dharna. When I reached there around 4.50 PM, I saw 19 persons staging Dharna. We thought they will vacate the place at 5 PM for us as per undefined code of conduct but they did not. We waited up to 5.15 and then decided to shit to adjoining place which was less convenient. Our young bankers wanted to occupy the place forcibly saying we have taken permission from City Magistrate, so now its our place. I some how pacified them saying then what is the difference between We Bankers which wants Unity and these people who have converted them into trade rather than Union? Let them feel super. We have to draw a bigger line across theirs and God will be at our side. By 5.30 we were many times more than them. When We Bankers Tigers started raising Slogans-their faces were worth seeing. They disappeared at 5.45 PM seeing our strength and we continued till 7 PM?

It is worth mentioning that Sri Prabal Pratap Singh, All India President NOBW came in our demonstration and addressed the we banker activists. He assured that in next meeting of UFBU, he will make it a point to attend the same as he could not attend on 13th October at Banglore and he will raise the demand of We Bankers inside UFBU. He added that if Government proposes to bring Bank Employees under CPC, NOBW would consider Government's proposal and would not turn it down as is being done by others.

I salute each and every bank employees for their participation and my special thanks to my close friends from BOB majority union who like other times, stood with me rising above trade union affiliation more particularly S/sri Rajesh Srivastava, Vipin Rao, Aditya Awasthi, from NOBW Sri Arun Mishra ji, Pradeep Rai ji and from my Union Sri Sushil Chak, P. K. Arora, Maya Devi ji, Anju Bhadauriya, Dimple Shukla, Richa Srivastava, Prachi Jaiswal, Neha Srivastava, Umesh Tiwari, Yogesh Gupta and many more.
Appointment of 8 Public Sector Bank CMDs By November end-Business Standard

After scrapping the selection of six UPA-appointed bank chiefs, the government has now decided to make significant changes to the selection process. Three separate screening committees with two members each will now interview eligible candidates on November 13-14. It is also looking at changing the selection process of statutory auditors of public sector banks (PSBs).

The committees will comprise the banking secretary, Reserve Bank of India (RBI) deputy governor and four experts. An
board, headed by Governor Raghuram Rajan, will hold interviews of eligible candidates for the post of of eight PSBs.

"Our efforts would be to complete our part by November 14 and send the shortlisted names to the finance minister for further action. Appointments in these eight positions will be hopefully be over by November-end," Financial Services Secretary G S Sandhu said on Friday.

He said the selection process would be more objective and transparent as there would be more external members and the selection would be vetted by the three sub-committees.

A member of one sub-committee would not be part of the other panel.

Eligible candidates will have to go through all these screening panel separately. The final selection will be made by the appointment board on the weighted average marks given by the sub-committees.

The National Democratic Alliance (NDA) government on Monday had scrapped the selection of six chiefs of PSBs, recommended under the United Progressive Alliance (UPA) regime, following a high-level panel finding irregularities in the process followed.

During the UPA regime, a panel headed by the RBI governor and including the financial services secretary had shortlisted CMDs for Bank of Baroda, Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce, United Bank and Vijaya Bank. The names selected by the panel had been sent to the finance ministry for ratification by the Appointments Committee of the Cabinet.

On selection process of statutory auditors, Sandhu said, "The objective of this is to have smooth audit and give autonomy to banks. At the moment, there are some issues."

Currently, auditors are being appointed by a panel headed by the additional secretary of the Department of Financial Services, chairman of the Indian Banks' Association and a representative of CAG. So, there is no representation from the bank.

On recapitalisation of PSBs, Sandhu said the department would seek additional Rs 10,000 crore from the Budget. This would be over and above the Rs 11,200 crore announced in Budget 2014-15.

On whether the government is contemplating bringing down its equity from 58 per cent to 52 per cent in PSBs, he said the ministry is in the process of seeking the Cabinet's nod for it.

Appointment of eight public sector bank CMDs by month-end: Sandhu

After scrapping the selection of public sector bank (PSB) heads made during the previous government’s tenure, the Narendra Modi-led government will begin a fresh selection process, and is hopeful of finalising the candidates for eight PSBs within this month.

A panel, headed by RBI Governor Raghuram Rajan, would hold interviews on November 13 and November 14, Financial Services Secretary G. S. Sandhu said here on Friday.
“Appointments in these eight positions will be hopefully over by November end,” he added.
Other members of the interview panel would include RBI Deputy Governor, Department of Financial Services Secretary and a few external members.
The name of the candidates, once short-listed, would be sent to the Appointments Committee of Cabinet (ACC).
The vacancies include heads of Bank of Baroda, Canara Bank, IOB, Oriental Bank of Commerce, United Bank, Punjab National Bank and Syndicate Bank.

DA For Bank Staff From November 2014

Dearness Allowance Increase  for Bankers from November 2014 to January 2015-By Rajesh Goyal

Now CPI for all the three months has been announced for relevant months and the same is as follows:-
July 20145752.13
August 20145774.95
September 20145774.95
Based on the above calculations the new DA is to be @ 109.80%, for the months of  November,  2014 to January  2015.   [The DA for August  2014 to October  2014 was  102.45% ] i.e. increase  of  7.35%. (increase of 49 slabs)  We give below the DA for November,  2014 onwards vis a vis existing DA, alongwith  the increase in DA at various levels of scales :-
Officers Staff :- [ All the calculations are based on present scales which are likely to be revised as per Xth BPS which is under negotiation. ]

Click On This Link To See Full Chart Of DA Payable From November 2014

Bank Should Also Follow Austrity Drive Of Prime Minister

In Modi govt's new austerity drive, no front-end cabins, 5-star lunches for bureaucrats-Financial Express 30th Oct 2014

The Narendra Modi government has issued a set of austerity measures, including bans on first class air travel and hosting conferences in five star hotels, and a bar on reviving posts that have been vacant for more than a year, with the stated objective of cutting down non-plan spend by up to 10 per cent. The measures are in line with steps that were announced by the previous government. 
“Such measures are intended at promoting fiscal discipline, without restricting the operational efficiency of the government. In the context of the current fiscal situation, there is a need to continue to rationalise expenditure and optimise available resources,” Ratan Watal, expenditure secretary, said in a missive.

With fiscal concerns on the forefront for the last few years, the finance ministry has been routinely issuing such guidelines, the last being in September 2013.

In 2014-15, the Centre has pegged its fiscal deficit at 4.1 per cent of the GDP. But it is facing an uphill task as it had already touched 75 per cent of the target in the first five months of the fiscal despite a significant cooling in global crude oil prices. While the finance ministry is set to begin pre-Budget consultations for 2015-16 from next week, it had also met financial advisers on Wednesday to take stock of spending by different ministries.

“For the year 2014-15, every ministry/ department shall effect a mandatory 10 per cent cut in non-Plan expenditure,” said the finance ministry listing out a number of steps for the purpose.

Non-plan expenditure consisting of payments including those on subsidies, interest and salaries is pegged at Rs 12.19 lakh crore this fiscal. However, government officials said that many of the guidelines are symbolic in nature and result in minimal savings.
While first class air travel has been barred, officials have also been advised to exercise economy in booking tickets and have been encouraged to use video-conferencing instead of making trips where ever possible. Officials would also not be permitted to get free companion tickets for domestic or international travel.

The missive has also advised against creation of new posts and has said that posts that have been vacant for more than a year should not be revived. Similarly, it has also barred purchase of new vehicles, adding that these would be allowed only to meet the operational requirement of defence and paramilitary forces. 
Further, officials have also been told to avoid hosting conferences in five star hotels except ministerial bilateral and multi-lateral meetings. The finance ministry has also asked the departments to avoid bunching up expenditure in the last quarter to ensure that there is no wasteful spending.


It is praise worthy that Mr. Naendra Modi Prime minister has issued guidelines to all offices to cut short spending  on meeting, tours and travel, and on gifts. Bank officials in public sector banks will take lessons from directives issued by government on austerity and try to follow the same in banks too. It is well known that  meeting of top officials, Branch Managers, Regional Heads or even Marketing Officers are conducted in 3 star or five star hotels and some times meetings are organised at tourist spot so that participants may enjoy the days of meeting lavishly without focussing on real agenda of the meeting.

There are examples when business plan meetings are organised at Lonawala  or Kashmir or at Gangtok and lacs of rupees are spent on entertainment including drinking costly wine. It happens at all level, at Regional level meetings or Zonal or central office level meetings. Huge expenses thus incurred on such meetings but usually are shown as expenses on meeting details of which will never include expenses on wine or other enjoyments. Banks in general book erosion in profit or book loss but do not hesitate in spending lavishly in meetings and tours.

Officials travel from one place to other by plane and stay in five star hotels. Not only this , it is also true that if a top ranked officer of a bank has to attend wedding or birthday function of his relatives, he or she will arrange an official work and in record they are on official duty but in fact they are on personal visit. Such tours are managed even for travelling abroad. I am fully confident that now in view of changed culture of central government under the leadership of Narendra Modi , Bank management will also take required step to reduce avoidable expenses and take part in austerity drive launched by great Mr. Modi.

Now when technology is in advance stag , they can conduct all meting through video conferences or chatting arrangement through phones and mobiles. I hope , leaders of various trade union associated with bank staff will also take care of it and make efforts to reduce load of expenses on bank balance sheet .

Thursday, October 30, 2014

Double Taxation And Black Money

By    pannvalan 
What is ‘Double Taxation’?
Any income, if subjected to taxation twice is double taxation.  This income could be salary or remuneration for the services rendered.  Or, it could be fees or charges.  Or, it could be interest on deposits/investments made.  Or, it could be profit on sale of fixed assets or movable assets like shares, gold etc.
Following are some examples of double taxation.
  1. Income earned by a citizen in one country, when remitted back to his home country is taxed there again. 
  2. Capital gains made by a citizen of one country, by selling his shares of a company located in another country.
  3. Profit on sale of immovable properties situated in a foreign country made by a resident citizen.
  4. Corporate Profits are subjected to tax and when the same (or a part of it) distributed as dividends to the shareholders is taxed again in their hands as their personal income. (After the Dividends Distribution Tax was introduced in India in 2007, this tax is also paid by the companies themselves and the individual shareholders do not pay any tax on their dividend income).
  5. Profit of a Partnership Firm is taxed and the applicable tax is paid by the firm.  Then the retained profit is credited to the individual partners of the firm, in the agreed ratio as mentioned in the ‘Partnership Deed’.  Suppose this money (share of profit) is treated as the personal income of the partners and taxed again, it amounts to double taxation.  However, as per Sec.86 of Income Tax Act, 1961, income/profit subjected to tax in the books of a Partnership Firm and the tax is paid by the firm will not be taxed again, when it is apportioned between the individual partners.
What is ‘Double Taxation Avoidance Agreement’ (DTAA)?
A country enters into a treaty with another country, in order to encourage enterprise and intellectual capital of both the countries.  This is done through DTAA.  In terms of DTAA, income of a person subjected to taxation in one country (the alien country/country of residence) is not taxed again in another country (home country/country of origin).  This is the most common feature of DTAA.  However, in some exceptional cases, the individual is required to pay tax to the country where his income was earned.  This is called ‘Withholding Tax’.   Usually, ‘withholding tax’ is deducted at source.
Then, the country which received the tax payment issues a ‘Tax Credit’ to the individual and it will be accepted as a valid ‘Tax Credit’ by the country of his residence, at the time of computing the total taxable income of the individual and his tax liability in his home country.
According to the tax treaty between India and Mauritius, capital gains arising from the sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a company resident in Mauritius selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in Mauritius, the gain will escape tax in both the countries altogether.
As on date, India has entered into DTAA with 88 countries.
Why is DTAA most talked about today, in India?
We are all aware that there are a lot of debates and discussions going on in the print and electronic media during the past few days about repatriation of black money stashed away in foreign banks (tax havens).  Both UPA and the present NDA government have submitted an affidavit to Supreme Court stating that if we disclose the information relating to individuals having bank accounts in countries with which we have DTAA, it will amount to breach of confidentiality of the persons concerned and will be viewed as violation of the terms of DTAA between two countries.  It will hamper further flow of information from these countries.  Then, India cannot succeed in its mission of unearthing huge black money lying abroad.  Mere accusation like “Assets disproportionate to the known sources of income” will not be accepted as a valid reason for sharing the information by the other countries with India.
My Understanding is –
  1. Tainted money and Ill-gotten wealth stashed away in foreign banks are not covered by the confidentiality clause.
  2. Especially when it can be proved that the money was earned through illegal means by tax evasion, corruption, arms trade, terrorism finance etc., the countries are bound to offer full co-operation to the investigating agencies and the countries to find out the true origin of such money.
  3. When a person does not respect the laws of the country where he lives and amasses wealth without disclosing it to the law enforcement agencies, he automatically loses the cover of secrecy available to protect his true identity.
  4. If it can be proved that the black money lying in the banks could be used for dreadful activities like financing and promoting of terrorism networks across the world, procurement of arms that may be used for overthrowing elected governments, manufacture and trade of psychotropic substances etc., every country will come forward to disclose the true identity of the individuals having deposit accounts.
  5. So, once we receive the information from other countries, we must investigate and establish that the money actually belongs to our country and not the individual depositors.  This task is not an easy one and it is the most challenging part of the whole process.  As soon as the charge-sheets are filed before Indian courts, the foreign countries will be prepared to co-operate with us further, so as to reach the logical end i.e. punishing the culprits and confiscating their wealth.
  6. However, it must be our endeavour to target the really huge money first.  Then, we may come to catch the small fish.
Date: 29-10-2014                                                                                                    pannvalan 

Role Of Media Men And Black Money ----By Danendra Jain

Media men on TV especially ABP News, Aaj Tak and NDTV tried their best to malign BJP government and Prime Minister Mr.. Narendra Modi using Supreme Court approach on Black Money. The were rebuking participants of BJP in each Debate as if they (media men) were inspectors in Thana and BJP personnel were thieves caught red handed.

I admire participants on behalf of BJP who more often than not remain cool minded, maintain peace and not get provoked by absurd, prejudiced, improper, inappropriate , abusive and irrelevant logic submitted by participants of other parties and sometimes also by some media experts who are called experts on the subject.

(I laugh when such media men give their improper logic on matter related to banking also. Media men who do not know ABC about banking do not stop maligning any bank or praising any bank in their whimsical and arbitrary style. Volume of bad debts in PS banks is rising quarter after quarter, but media men sometimes praise CMD on progress said to be achieved by a bank and sometimes malign a bank with their prejudiced eyes. I get astonished when media men advocate increase in salaries of executives and CEOs of public sector banks and demand to make it equivalent to their counterpart in private banks. I get shocked because they think it better to keep mum on demands made by junior bank staff  who have been fighting for respectable hike in their pay for last two years.)

I praise BJP participants because they try to put facts and figures without any biased attitude even though media men who organise debate push them in corner and give them minimum time and even though media men wilfully do not stop frequent abruptions and disturbance posed by participants of Non-BJP parties. These media men allow uninterrupted time to Non-BJP precipitants and crate all disturbances when BJP men start responding. This is media style torture.

.Media men have perhaps , why perhaps they have certainly forgotten their duty towards country. Their role to expose truth of any and every act of the government and that of opposition parties without any prejudices is rarely followed by media men .They should not try to brush ruling party with their ill-conceived or ill-motivated ideas and conspiracies, and should not try to put their views forcefully in the mouth of BJP to please their mentors in previous ruling party or to leaders in Aam Admi Party.

After much hue and cry by media men on many Television channels and Crocodile Tears shed by leaders and spokesmen of Congress Party on Black money name disclosures , Supreme Court has vindicated the stand of BJP and the court thought it fit not to disclose names of account holders enlisted in list obtained from foreign banks to give due respect to sanctity of various international treaties and to enable the government move in direction which will enable India to procure more and more name of account holders from other tax heaven banks.

Supreme Court did nothing new on 29th October and simply handed over the sealed envelopes submitted by ruling party to SIT which contained the same list which was already handed over to SIT by BJP when they formed it in June 2014.Court punctured the hope of various media men created in minds of viewers by their illogical stand and who created a hype on black money.

I also tried a lot through my little blogs to enlighten on issue of black money but failed to do anything. It is only court which can save India from dirty men of Television channels and journalists who consider them above all dignitaries of Government of India. I get disheartened when TV channels like NDTV or Aaj Tak or ABP news which telecast debate to malign BJP and which do not keep the sanctity of Free Journalism are awarded with prize.

This is India where more often than not evil doers are promoted in majority of government department , PSUs and banks. Similar is the position of media men who are also victim of flattery and bribery like public servants. This is a great curse on democracy. I hope all right thinking persons and NGOs will take steps to correct the attitude and approaches of journalists in India. I hope media men will now stop mudslinging and making remarks sarcastically against BJP participants at least on Black money issue in views of latest stand taken by Supreme Court.

Last but not the least , media men , leaders of NON-BJP parties and some blind supporters of Non-BJP parties tried their best to malign the image of Narendra Modi in particular and Bhartiya Janta Party in general by using secular or communal card for last almost a decade. But the common men who understand the truth better and who can decide and choose the best among the available options of politicians during election times though it wise to vote Modi and BJP for power.

Some so called experts of Media men try to divide the society on communal or caste by portraying the probability of victory of any candidate on the basis of population based on caste and community. It is They who always talk of caste and community but always put blame of BJP for dividing the society. During last Parliamentary election, BJP and its leaders almost avoided talking on caste and community but media men always tried to forcefully introduce their prejudiced ideas in the mouth of BJP participants during almost all TV debates on some selected TV channels. 

Black money: Centre gives apex court list of 627 account holders -Hindu Business Lin 30.10.2014

J Venkatesan 

New Delhi, Oct 29:  
The Centre on Wednesday submitted a sealed cover to the Supreme Court containing a list of 627 Indians holding black money in bank accounts abroad along with a status report on the investigation conducted against them.
The three-judge Bench of Chief Justice HL Dattu and Justices Ranjana Desai and Madan B Lokur, which had hardened its stand on Tuesday against the Centre for non-disclosure of all names, decided not to reveal the names.
The Bench made it clear to Attorney-General Mukul Rohatgi that it did not intend to open the three envelopes submitted by him and asked the Registry to send them to the Special Investigation Team. It directed that the envelopes should be opened only by SIT Chairman Justice MB Shah and Vice-Chairman Justice Arijit Pasayat, for a further probe in respect of the 627 names.
The Bench also empowered the SIT to evolve its own procedure in accordance with law after hearing the grievances and difficulties of the Centre with regard to treaties with various countries and the submissions of petitioner Ram Jethmalani and his counsel.
Earlier Rohatgi told the court that the first document contained details of correspondence, treaties and agreements India had signed with France and other nations where the money was said to be stashed; the second contained the 627 names; and the third gave the status report on the investigation in these cases.
Rohatgi said that more than half the people in the list of 627 were Indian nationals while the rest were Non-Resident Indians. He said that most people named in the list had their accounts with HSBC Bank, Geneva.
The Attorney-General added that the details of account holders with entries dated up to 2006 were supplied by the French government to the Centre in 2011. He said that the information was stolen from HSBC Bank in Geneva and reached France from where the Government got the information.
The AG said the income-tax law had been amended to extend the period of limitation for launching a prosecution, and that the investigation should be completed by March 31, 2015. He said the Centre was not interested in protecting anybody and would follow the court’s orders.
When the CJI asked the AG whether the Government was pressing the application seeking modification of the orders, the AG said he was not doing so.
The Bench asked the SIT to submit a status report on the probe by November 30 and posted the matter for further hearing on December 3.
AAP’s intervention petition

Meanwhile Arvind Kejriwal of the Aam Aadmi Party, through his counsel Prashant Bhushan, filed an intervention application stating that he had personal knowledge of some of the names having black money stashed in foreign bank accounts and was also in possession of the statements made by such persons before income-tax authorities.
Bhushan told the court that at the time of raids of their premises, these persons had confessed to holding black money in foreign accounts and also disclosed the modus operandi of how the ill-gotten money was transferred from India to their foreign accounts, and further, how this money was brought back through hawala transactions.
Kejriwal said that though the Government had revealed eight names, the list did not contain the names of the three who had given statements. He said he was placing all such names/information, obtained through a whistleblower, before the court so that a thorough investigation could be ordered and effective steps taken to check such illegal transactions of black money. The Bench said it would consider the application on December 3.

PTI reports:
SIT report will be submitted on time: MB Shah

Investigations against over 600 people accused of stashing money abroad illegally are going on and a status report will be submitted on time, said MB Shah, chief of the Special Investigation Team (SIT) on black money.
“We have already filed the first report (on black money) in August. Certainly I am hopeful about it (timely submission of the second report),” he said on Wednesday.
On a day the Attorney General submitted a list of 627 names having accounts in HSBC Bank, Geneva, to the apex court, Shah told a news channel that the list was already known to the team.
“Investigation is going on. Without investigation it is very difficult to say that a person is guilty or that person has done something wrong. A person is required to be heard first,” he said.
Shah, a retired Supreme Court judge, said investigation in these cases is not easy. “It is not easy because when a department also issues a notice, it takes time. The concerned parties and assessees’ replies take time,” said the SIT chief.

No Improvement In Bbank's Health

Outlook for Indian banking system remains negative: Moody's

Moody's Investors Service says that its outlook on India's banking system is negative, reflecting its view that high leverage in the corporate sector could prevent any meaningful recovery in asset quality over the next 12-18 months. ''The negative outlook on the Indian banking system pertains mainly to the public-sector banks, which represent more than 70% of total banking-system assets,'' says Gene Fang, a Moody's vice president and Senior Credit Officer.

''These banks have experienced higher growth rates in nonperforming and restructured loans, as well as greater weakening in profits, than private-sector banks, and these trends are unlikely to improve for public-sector banks,'' adds Fang. ''Going forward, India's corporate sector will remain highly levered, representing an obstacle to a cyclical recovery in asset quality.''

The report-whose outlook expresses Moody's expectation of how bank creditworthiness will evolve in this system over the next 12-18 months-looks at India's banking system in terms of five factors: Operating environment (which is classified as stable); asset quality and capital (deteriorating); funding and liquidity (stable); profitability and efficiency (deteriorating); and systemic support (stable).

While Moody's expects economic growth will pick up moderately, growth remains constrained by the high interest rates needed to contain inflation. Moody's base-case forecast is for GDP growth of 5.0% for the fiscal year ending March 2015 (FY2015) and 5.6% for FY2016, compared with 4.7% in FY2014. According to Moody's report, India's broad corporate sector is highly levered, with a debt-to-equity ratio of more than 3.0x.

 In particular, corporates engaged in infrastructure projects face both structural and cyclical challenges. Without a stronger economic recovery, significant deleveraging will only occur beyond the horizon of this outlook. And although the new government of Prime Minister Narendra Modi may formulate some policies within the 12-18 month horizon of this outlook, it will take longer to see an impact on the real economy.

Profitability will also remain under pressure as banks continue to provide for problem loans. This is particularly problematic for public-sector banks, which have lower pre-provision margins and greater asset quality problems. However, funding and liquidity will remain stable, given high domestic savings rates and a low reliance on market funding.

Moody's expects that a high degree of support from the Indian government for bank creditors will remain in place over the outlook horizon. The Reserve Bank of India issued a set of recommendations aimed at compliance with the Financial Stability Board's ''Key Attributes of Effective Resolution Regimes'' by 2015.

However, the Indian government in practice will likely opt for other resolution mechanisms, such as assisted mergers, instead of ''bail in''. If senior creditors of an ailing public-sector bank were required to absorb losses, this could easily risk contagion of financial distress to other public-sector banks, given their similar business models and credit characteristics.

Moody's rates four private-sector and 11 public-sector banks in India that collectively account for 67% of system assets. The negative outlook on the Indian banking system is consistent with the negative rating outlooks on the bank financial strength ratings (BFSR) of 10 of the 15 rated banks. -

Public sector banks hiding bad loans’ size: Ex-CVC-ET

NEW DELHI: Restructuring of loans on easy terms may not be the best solution to tackle the bad loans of public sector banks (PSBs), former central vigilance commissioner Pradeep Kumar said, and expressed concern that state-run banks were probably suppressing the size of the "real crisis involving NPAs (non-performing assets)".

For over two years, the CVC has been pursuing several cases of NPAs, many of which are suspected to be the result of an organized fraud, and has played a key role in referring some of the cases to the CBI for criminal investigation. He has conducted detailed vigilance inquiries into some of the biggest bank loan defaults, and has recommended disciplinary action against dozens of bank officials.

"Willful defaulter is a process. There are two types of things happening — one is the declaration of someone as a willful defaulter, the other is restructuring of loans. Restructuring of loans is taking place with easier conditions. Both are of concern. NPAs are getting suppressed — the RBI has taken note of it," Kumar, who retired this weekend, told TOI in an interview. "There is a lot of corporate restructuring happening, but even then loans are not getting alright," said Kumar.

The former CVC's comments come at a time when sources in the CBI and other investigating agencies are also pointing out that PSU banks may be suppressing the extent of bad loans in the sector.

Kumar said, "It comes as a concern when the banking sector is taken for a ride by corporates in connivance with bank officials. There have been a number of cases of bank frauds and that is an area we are looking into closely."

The former CVC said bank officials must act responsibly and have to be accountable for their actions. Kumar said the appointment of bank directors have to be fair and transparent "as they are ultimately responsible for all large decisions of the banks".

A senior investigator recently said banks were reluctant to declare loans as frauds despite overwhelming evidence because of its implications — for its senior staff and the balance-sheet.

CVC inquiries have revealed several cases — Winsome Diamonds which has an NPA of Rs 6,500 crore, Biotor's Rs 1,100 crore and Mahuaa TV with almost Rs 1,800 crore. The government has taken several steps to tame the problem of bad loans. It is also amending laws to help banks recover their dues and stop the fund flow to suspect companies.


Former CVC is right: There is a cancerous growth in Indian banks – hidden NPAs-First Post

The comments of former central vigilance commissioner (CVC) that state-run banks were probably suppressing the bad loans on their books by restructuring these loans with easier conditions is highly critical and gives a hint on how frightening the actual bad loan situation can be in India’s banking system.
“NPAs (non-performing assets) are getting suppressed—the RBI(Reserve Bank of India) has taken note of it,” said Pradeep Kumar, former CVC, in an interview with Time of India on Friday.
What Kumar said is something which every stakeholder in the banking system — the bankers, the companies, the regulator and the finance ministry (which effectively controls 70 percent of the banking industry through public sector banks) knows very well for long, but has conveniently ignored for their own interests.

For several years now, the banking industry, in particular state-run banks, have been subjected to severe, frequent misuse by a nexus of crony capitalists, corrupt bankers, middlemen and politicians.
This typically happened in two stages.
First is when the loan is being sanctioned. The nexus is at work then in the case of companies, which originally didn’t merit the loan. The banker is bribed or influenced by the politician or the firm through the expert middleman, who seal the deal for the beneficiaries.
This happens typically in state-run banks, where officials lack accountability, power, autonomy in their functions and are prone to flouting rules when bribed or pressurized by those with money power.
Logically, a company which secures the loan through this mechanism wouldn’t be able to honor its repayment obligations for long since in the first place, the firm didn’t deserve the loan. If it did, there was no need to trigger the nexus to operate.
Two, when the crores of money thus lent and not repaid by the unworthy borrower are about to turn an NPA, the nexus again returns to work and push the banks to offer additional assistance/ relaxation to the same faulty borrower through some easier terms (slashing lending rates, extending repayment period, offering a moratorium and taking a haircut), commonly known as loan restructuring.
This is something, again, the company doesn’t deserve, since loan recast facility is originally intended for companies in genuine trouble not cronies.

As Firstbiz has argued in the past (here and here), there are strong reasons to believe that a sizeable chunk of the current stressed asset mess is attributable to criminals in the banking system.
If one take a closer look at the major bad loan cases that have been now investigated for charges of wilful defaulting/ criminality/ fraud such as Rs 7,000 crore loan owed by Vijay Mallya-led Kingfisher Airlines, Rs 6,500 crore loan of Winsome Diamonds and Rs 40,000 crore of Bhushan Steel, Rs 2,500 crore loan owed by Mumbai-based Tayals and several other similar cases, one needn’t take much effort to understand how the current pile of publicly stated bad/ restructured loan happened.

Bankers have been well aware of several cases going into loan recasts without merit but kept silent until recent past for fear of their jobs and for the sake of their own career development/ post-pension vocation programmes.

A change in this scenario happened only in the last 2-3 years, when the lead lenders at the corporate debt restructuring (CDR) forum took up the issue with the RBI seeking change in rules to prevent companies from misusing the system.

But that’s about companies. What about banks themselves misusing credit recast facility to rescue a non-meritorious firm? That’s what the former CVC has highlighted now.
If indeed banks were honest in stating the actual status of many of their loan accounts and showed the guts to call a spade a spade, the actual figure of bad loans would have been much higher than the Rs 2.5 lakh crore gross NPAs disclosed by them till June.

As RBI governor Raghuram Rajan said in the post monetary policy presser on last Tuesday, banks shouldn’t postpone the bad loan problem for tomorrow and instead deal with it today, because “tomorrow will be worse”.

But that’s precisely what banks have done all these years. The total chunk of loans restructured in the banking system is about Rs6 lakh crore (Rs 3 lakh crore through CDR and the rest through bilateral route).
Only a thorough investigation can reveal how much of this chunk is actually hidden NPAs. Identifying the problem is critical to find remedies. A Firstbiz estimate shows about 14 percent of the loans given by banks until June is under the stressed asset category. That’s not a good signal for an aspiring economy like India.
Bad loans make banks weak.
If banks fail to detect or pretend not to have them on their books, that can be even more fatal for the whole economy at a later stage. Banks are the backbone of an economy and the managers of public money. Hence, safeguarding them should be the utmost priority of the policymakers.

As Firstbiz noted earlier, the only way out to come out of the current situation plaguing India’s private sector banks is to privatise them and change them as better governed institutions.
Putting good money after bad and understating the financial health do not often happen in private sector banks like in the case of state-run lenders.
Hidden bad loans are like cancer. The problem with the cancer is, if left undetected, it lives merrily with the victim for a considerably long period, before manifesting one day with its full might.
That day comes with a cost


Tuesday, October 28, 2014

Join Dharna At Jantar Mantar And Modi's House

Collection of News from Facebook group Namely WE BANEKRS are given above and are As follows

While it is a welcome sign that PM meets CEOs of Public Sector Banks, the meeting will be good for the employees if the following additional points are discussed by the top level executives of Banks with the receptive and thinking Prime Minister.

1. Settlement of Pending revision of wages, Set up of Pay commission instead of dealing the same through IBA, which is indifferent to the sufferings an
d aspirations of the employees and delays the matter abnormally.

2. Expectations of Government and Bank from Employees

3.Facilities to be given by them for fulfilment of the expectations.

4.Expectations of the employees and their commitment to the ideals of Public Service.

To sum up, ways and means making the public sector banks efficient in service and rewarding to the employees, who are prepared to work hard and fulfil the needs of the society in the changing economic scenario.
जरा सोचिये, खुद से सवाल कीजिये:

१. क्या आप अपने वेतन और कार्य की दशा से संतुष्ट हैं?

२. क्या आपकी यूनियन आपकी आशाओं और आकांक्षाओं के अनुरूप वेतन वृद्धि और बेहतर सुविधाएं दिलाने के लिए वचनबद्ध है और उसी के लिए राष्ट्रीय स्तर पर वार्ता कर र
...ही है?

३. क्या आपकी यूनियन की कार्यपद्धति पूर्णतया पारदर्शी है और आपको आपकी मांगों के सम्बन्ध में चल रही वार्ता से पूरी तरह अवगत करवाती है और आपके प्रश्नों का जवाब देती है?

यदि उपरोक्त प्रश्नों के उत्तर न में हैं-तो फिर क्या सोच रहे हैं ? वो कौन है जो आपकी मांगें पूरी करवाएगा? आपके साथ न्याय करेगा?

वो और कोई नहीं स्वयं आप हैं. नयी यूनियन बनाना समाधान नहीं है-अगर आप ये सोच रहे हैं कि सरकार या फिर आईबीए या फिर कोई और बिना कुछ किये धरे आपके साथ न्याय करेगा तो फिर आप मुगालते में हैं. जो अपनी सहायता खुद नहीं करता, जो अपनी आवाज खुद नहीं बुलंद करता-उसकी सहायता कोई नहीं करता. यूनियन का मतलब झंडे डंडे नहीं है, यूनियन का मतलब स्वयंभू नेता भी नहीं है. यूनियन का मतलब अन्याय, उत्पीड़न और शोषण के खिलाफ एक होकर आवाज़ बुलंद करना है, पुरज़ोर संघर्ष करना है और तब तक करना है जब तक न्याय की प्राप्ति नहीं हो जाती. इस मायने में आप यूनियन हैं, मैं यूनियन हूँ, हम सब यूनियन हैं, हमारी एकता यूनियन है.

इससे पहले कि देर हो जाए, इससे पहले कि आपके अधिकारों का सौदा हो जाए, इससे पहले कि आपके सपने नीलाम हो जाएँ, उठिए, जागिये, पूरी की पूरी व्यवस्था को बदलवाने के लिए तत्पर हो जाइए.
आपको बस इतना करना है:

१. अपने कार्यस्थल पर अपने साथियों से वर्तमान दयनीय स्थिति पर चर्चा कीजिये, उन्हें झंडे डंडे वाली यूनियन की मानसिकता से ऊपर उठकर समग्र बैंक कर्मियों के हित में संघर्ष के लिए तत्पर हो जाने पर राजी कीजिये. हो सकता है पहले प्रयास में आपको सफलता न मिले लेकिन निरंतर प्रयास के जरिये आप अपने कार्यस्थल के सभी साथियों को एक जुट करने में जरूर सफल होंगे. अगर आपने इतना कर लिया आपने पहली बाधा पार कर ली.

२. आप जिस भी यूनियन या संगठन के सदस्य हैं, उसके स्थानीय नेता से संपर्क स्थापित कीजिये और उससे यूनियन की भावना से ऊपर उठकर संघर्ष में भागीदारी और नेतृत्व करने का आग्रह कीजिये, अगर वह आनाकानी करे या असमर्थता जताए तो फिर उससे आपके नेतृत्व में भाग लेने और आपका साथ देने का अनुरोध कीजिये.

कोई भी संघठन एक दिन में नहीं बन जाता, हम संघठन निर्माण की प्रारंभिक अवस्था में हैं, आपके अपेक्षित सहयोग और भागीदारी से हम इस आंदोलन को क्रांति में बदल सकते हैं-क्या बैंक कर्मियों के मान सम्मान और स्वाभिमान की खातिर आप इस पूरी की पूरी व्यवस्था बदलवाने के लिए क्रांति हेतु तैय्यार हैं? यदि हाँ, तो अपनी योग्यता, साहस, बहादुरी, दृढ निश्चय, निष्ठा, समर्पण और कुछ कर गुजरने के जज्बे के साथ इस आंदोलन रुपी यज्ञ कुण्ड में आहुति डालने के लिए अपने साथियों के साथ २ नवंबर को ११ बजे जंतर मंतर दिल्ली पहुंचना अभी से सुनिश्चित कर लें.

आहुति बाँकी यज्ञ अधूरा
अपनों के विघ्नों ने घेरा
अंतिम जय का वज्र बनाने
नव दधीच हड्डियां गलाएं
आओ फिर से दिया जलाएं
— with Kamlesh Chaturvedi.

Monday, October 27, 2014

Faulty Promotion Process Of ED And CMD

Why not any of General Manager, Executive Directors and CMD of public sector banks and financial institutes has been suspended till date even though many of them have been found to be involved in Bribe based lending scam exposed by CBI or media or bank staff themselves?

Why properties of corrupt officials of banks who caused loss of crores of rupees not seized till date and how did the get safe retirement during last decade even if they were found involved in bad lending?


Why not RBI officials or Finance Minister have been punished for choosing wrong ED and Corrupt CMD for a bank?

Why GOI did not think it wise to peep into promotion process which took place for ED and CMD during last ten years of UPA rule? 

No purpose will be served only by cancelling the selection board if government of India chooses not to punish members of Interview board who violated norms and who for vested self interest decided to chose bad candidate for the top post like ED and CMD of Bank?

CMD of Syndicate bank was caught in bribe-lending, CMD of Indian bank, Corporation Bank, Bank of India and many other public sector banks have also been found to be guilty of committing serious irregularities in the past and several others have been allowed to retire from bank safely even if they were corrupt, some of them have been given job in other Financial Institute even after retirement with many records of corruption in the past. 

A few years ago , CBI charged several high rank officers of bank and LIC housing Finance Company of lending huge money to real estate builders after taking bribe. Several banks have been charged of wrong lending in case of 2G spectrum related case .Even Supreme Court has passed adverse remarks against bankers.

If RBI and GOI could have taken lesson from above episodes and took corrective steps in real sense and true spirit , they could have stopped assets of banks moving from good to bad and bad to worse.

Unfortunately they have done nothing in the past in real sense. They only played drama and put carpet on all cases of corruption related to top officials and ministers.

In such position how one can imagine that interview processes taking place in these banks for promoting an officer from one scale to higher scale may be true , justified and without involvement of bribery flattery and favouratism.


When ED and CMD of a bank are corrupt , it is but natural all processes taking place in respect of recruitment, promotion, purchase of goods and services and sanctioning or
loans are doubtful . Usually flattery and bribery are two keys for an officer to get success in such promotion processes . It is open secret.
When top bankers are corrupt there is no doubt that a culture of corruption is wide spread in that bank in particular and in PSU banks in general. Still RBI, Ministry of Finance and government of India as a whole is silent on taking punitive action. It is only because Dirty Ganga emanates and originates from Ministry and RBI only.


Had it a been a clerk or a simple officer, top management could have suspended him immediately.

GOI and IBA deny wage hike to bank staff saying that banks have no paying capacity knowing very well that junior staff are not at all responsible for any big loss caused to bank by poor assets. Executives of some banks have also pleaded separate pay revision for executives .

Is Finance Minister not responsible, accountable and punishable for selection of wrong and corrupt ED and CMD for a bank?

Why General Manager rank officers alleged to be involved in corruption and charged by CBI are allowed to continue in their post or even promoted is a million dollar question?


It speaks how much deep rooted is the cancer of corruption in the banking system in particular and in government departments in general.

Banks ask for equivalent or even more amount of collateral security and guarantors even for financing a few lac or a few crores of rupees to common business men. But they think it safe to finance hundreds and thousands of crores of rupees to big corporate houses, telecom companies, power makers and distributors, real estate builders.


Government of India has decided to change the constitution of selection process but has not strike at the root of corruption?
Government has not stopped the dirty selection process of promotion going on for a decade and more for internal promotion in these banks.
It is the culture of bad promotion and ill-motivated posting which has resulted in current sickness of PS banks.
It is the humiliation given to senior officers by promoting juniors based on flattery and bribery which has caused rise in stressed assets to a great extent.


Still GOI is silent on this issue though several complains have been sent in last few years to MOF and RBI and several cases have been lodged in various courts of the country. Clever chiefs of banks spend crores of rupees in putting hindrances and delaying judgement from court of law and they leave no stone unturned to ensure withdrawal of cases by building pressure on petitioners and ensure abortion of Justice before it comes from Temple of Justice.

It will be foolish to imagine of reforming PS banks by carrying out little surgery . Need of the hour is carry on thorough scrutiny of all processes and punish the guilty in all cases so that clear message is conveyed to all government officials, bankers and other concerned officials that corruption at any level will not be tolerated.

It must be kept in mind that stray cases of corruption at high level which came to light in last few years are just indicative . Actually there are hundreds and thousands of such cases. By mistake one or two cases of corruption are exposed when the corrupt officer commit some  mistake . Otherwise game of corruption is normally played very cleverly,safely and cautiously. Obviously corruption at top level is all pervasive and cancer of corruption has engulfed entire banking system.

To read full news click on following link