Evaluate the Fantastic Contribution to Banking System

C N Venugopalan Ex-Manager, Union Bank of India	Nandanam Kesari Junction, N Paravoor, Kerala – 683 513
Phone. 0484 2447994 Mob: 9447747994 E-Mail: ceeyenvee@gmail.com

No.20100511 (a) 11^th May, 2010

The Principal Secretary, Office of the Prime Minister, Government of India, New Delhi – 110 001

Kind Personal Attention: Shri. T K A Nair,

Dear Sir,

EVALUATE THE FANTASTIC CONTRIBUTION TO BANKING SYSTEM -HAS ANY ONE MADE IDENTICAL CONTRIBUTION TO FINANCIAL SECTOR IN HISTORY?

Seventeen listed PSBs made incremental profits of 22,502 Crores over 2006 during the three ensuing years. During 2003 -2006 the Chairmen of different banks fought themselves ignoring national goals for their own cosmetics, pulling the legs of one another most unethically using the deregulated interest rates, allowing interest concessions up to 6 percent to potent borrowers.

When IBA said, banks did not have financial muscles to bear the burden of fresh Pension Option, I criticized them and pointed out the process of debilitating of the Banks by those who are to strengthen them. In 2006 August, the lethal interest rate war and take over mania almost came to an end. I mooted vehement criticism to RBI, MOF etc. saying that "thanks to the efficient monitoring of Banks by RBI by keeping their men as directors on board the different banks, even a PSB viz. New Bank of India vanished into obscurity; RBI changed the nomenclature of their director as "Nominee Director". The change was announced by CNBC Channel in August, 2006.

The take over of accounts offering lesser rates of interest stopped almost as a result of my efforts. The stoppage of the interest rate war resulted in soaring profits for all Banks in Public and Private Sector. The incremental Profits over the year 2006 for the next three years for 17 listed PSBs were to the tune of Rs.23,670.00 Crores. SBI, Associate Banks and Private Sector Banks too must have made incremental profits totaling double of the amount for the 17 Banks. It is after contributing to the Indian Banking system about Rs.70,000 Crores that I pressed the demand for Pension Option. The actuarial assessment of the deficit in Pension Fund was Rs.6,000 Crores, i.e. just 10 percent of the incremental profits of the three years.

Profits of Eighteen listed Public Sector Banks in India (excepting banks that are not listed) during the past five years:

	March	March	March	March	March
	2005	2006	2007	2008	2009
Punjab National Bank	2707.21	2874.77	3230.64	4006.24	5744.35
Bank of India	340.05	701.44	1123.17	2009.4	3007.35
Union Bank of India	719.06	675.16	845.39	1387.03	1726.55
Central Bank of India	357.41	257.42	498.01	550.16	571.24
Canara Bank	1109.51	1343.22	1420.81	1565.01	2072.42
Indian Overseas Bank	651.36	783.34	1008.43	1202.34	1325.79
UCO Bank	345.65	196.65	316.1	412.16	557.72
Syndicate Bank	402.90	536.50	716.05	848.06	912.82
Allahabad Bank	541.79	706.13	750.14	974.74	768.6
Vijaya Bank	380.57	126.88	331.34	361.28	262.48
Bank of Maharashtra	177.12	50.79	271.84	328.39	375.17
Corporation Bank	402.16	444.46	536.15	734.99	892.77
Indian Bank	408.49	504.48	759.77	1008.74	1245.32
Dena Bank	61.00	72.99	201.56	359.79	422.66
Bank of Baroda	676.84	826.96	1026.47	1435.52	2227.2
Andhra bank	520.1	485.5	537.9	575.57	653.05
Oriental Bank of Commerce	760.81	803.16	826.81	840.94	905.42
Total	10562.03	11389.85	14400.58	18600.36	23670.91
Profit above March 2006 level (Incremental Profit)			3010.73	7210.51	12281.06
Total Profit hike for all the three years					22502.30

The Loan waiver for helping farmers in difficulties in the pre-election period was Rs.70,000/- Crores. Benefits mostly went to willful defaulters with ample means. Decision makers were bank managers who extended on the basis of status of the account and as per their whims within the limited time frame. The normal loan waiver for the past three years by banks was to the extent of Rs.25,000 Crores. While banks could easily accommodate Rs.95,000 Crores on write off, banks were pleading paucity of funds to meet the Pension burden in spite of the progressive and cumulative Net Profit figures. A major portion of the incremental profits of Rs.70,000 Crores can be reasonably attributed to my work as the take over mania of banks and unethical competition by using the lethal weapon of reduced interest rate stopped almost as a result of my criticisms put forth. Any one may evaluate whether any individual has made such a fantastic contribution to the Banks and Financial Sector of the country without taking any remuneration or compensation, while those responsible for strengthening banks were fighting with each other and debilitating the Banks. The actuarial deficit of Rs.6000 Crores in Pension Fund was a mere statistical gimmick, a product of those who were paid for it by Banks.

It is only after strengthening the banks and the banking system of the country so much that I made the demand for a fresh Pension Option which meets with the aspirations of our Great Prime Minister from legal and socio economic angle. My work is resulting in redeeming the deprived social security benefit to more than five lakhs Indian families from the banking community, presently working as also the retired who are in utter financial distress. It is my belief that you will kindly appreciate it as the most laudable achievement of an individual - a Keralite - at least in the first decade of the century benefiting a vast number of families in India as I have been fighting relentlessly for it single handed for past nine years.

Thanks and Regards

Yours faithfully,

C N Venugopalan