Letter to IBA Chairman 9th July, 2008

C N Venugopalan Ex- Manager, Union Bank of India & Vice President, UBI Retired Officers’ Association (Kerala)	“Nandanam” Kesari Junction North Paravoor Kerala – 683 513
Phone No. 0484 2447994 Mobile: 9447747994

No. 20080709 09^th July, 2008

Shri. T S Narayana Swamy,

Chairman,

Indian Banks’ Association,

Block No. 2 & 3,

6^th Floor, Stadium House,

81-83, V N Road,

Mumbai – 400 020

Respected Sir,

Issue of Pension Option in Banks

I am writing to you in continuation of my letter dated 3^rd July, 2008 sent to you, and bringing to your notice some of the absurdities IBA committed in the past as it will enable you to take suitable corrigendum steps swiftly. I am citing the details with reference to the happenings in the institution I worked for viz. Union Bank of India, a member Bank of IBA :

• The Bank circulated the draft Pension Regulations calling for option letters from the employees stating that “the option, once exercised shall be final”.

• Subsequently the Bank circulated among employees the final Pension Regulations, sanctioned by Central Government and adopted by the Board, once again calling for option letters within a set time frame stating once again that “the option once exercised shall be final”. The staff circular circulating the final Regulations stated that the options submitted are “irrevocable” and further clarified that that those who exercised options in response to draft Regulations need not submit option letters again.

• The Pension Regulations did not contain a provision in any of the Regulations for revocation of an option.

• The Bank later circulated that IBA had advised it to extend a chance for revocation of the option to employees if they wished to do so for any reason and collected revocation letters from certain employees.

• IBA is not having powers to intercept the Pension Regulations of the Bank that carried previous sanction of the Central Government and approval of the Board. The Staff Circular calling for revocation letters and the proceedings contemplated thereunder are null and void in the absence of a provision for revocation of option in the Regulations.

• The Bank has rejected Pension to a number of employees on the strength of the revocation, which action is not having a backing of the Regulations. Revocation was not on terra firma and is null and void.

• In the case of employees who did not exercise options in the wake of the Regulations containing the penal clause for forfeiture of entire past service for participation in strike at the time of calling for options letters, when the particular clause was deleted from the Regulations in February, 1999, the bank illegally refrained from extending a fresh option. The fact of deletion of the particular clause was circulated in the Bank only through Staff Circular No. 4904 dated 8^th October, 2002, after the implementation of the “VRS”. None of the employees who took Voluntary Retirement are advised about the scrapping of the penal clause and of their legal eligibility for a fresh option in the wake of the amendment. This is an unscrupulous action on the part of the Bank quite unworthy of an institution founded on public trust. The action of deceiving its own people who have contributed for its growth is quite unbecoming of an institution that raises tall claims of serving the nation and its people.

While implementing the so called “VRS”, which was in fact an abetted scheme through incentives offered, the Bank contemplated breach of all cardinal conditions:

• The compensation Ex-gratia that was offered in Bonds (50 percent) was not at all given to the subscribers. It was not made known whether the bank varied the package or paid the entire amount in cash. Non-issuance of the promised 10 percent bond which was one prime condition was breached. Many are affected by it.
• Gratuity payable was not paid in full and the Bank released about Rs.6.00 Crores as gratuity only in a subsequent instalment to the retirees, only through the intervention of the ALC (Central) after I invoked and established the claim. This condition also was breached.
• The additional notional service of 5 years to be added to actual service put in for reckoning the qualifying service for Pension under regulation 29 was not reckoned for paying pension to those who retired through VRS. This is yet another breach the Bank contemplated in respect of the offer to grant pension as per Pension Regulations.
• In the case of pensioners, the Pension that was payable only after attaining the age of 60 was paid much earlier, from the ensuing month of Retirement at the sweet will of the Bank, in spite of the Pension Regulations not containing a provision therefor. This was another breach of the terms and a defect in implementation of the scheme. Subsequently Regulation 28 of the Pension Regulations was amended to ratify the unauthorized payments and to escape accountability of the erroneous payments. Here the condition was breached liberally.
• The document of offer contained vague and loose terms when it stated that the Bank reserved to itself the right to amend any term of the offer and hence was ab initio void legally.
• When all the offer terms were breached by the party who put forth the offer itself, how can the terms thereof become binding on the people who have acted on it?

Whereas all banking transactions right from the acceptance of deposit, payment of a cheque, sanction of a loan, the conduct of the officers and employees, directors etc. are subject matter of a law and requires legal backing, how can one validate the above absurdities the Bank and IBA have committed? It is ironical that the Banks contribute the profits they make - by deceiving their own people by converting establishment expenses into profits - to the exchequer for paying pension to the politician who serves a short span of two years or more in the Assembly and Parliament and to all government servants and even to employees of private run schools and colleges, putting their own sons and daughters to starvation by not paying pension. It is high time that bankers who claim to be apostles of progress of the nation adopt a sensible attitude and grant Pension as per the Pension Regulations to all those who possess the qualifying minimum service irrespective of the mode of exit, by counting the notional service also without dilly dallying the settlement on pension in view of the legal onus cast on them. When the banking system can bear the burnt of Agricultural Debt Relief (Rs.70,000 Crores to defaulters) for obliging the political masters who eye votes at the elections and spend on wasteful items like change of logo in several crores ( Rs.1,000 Crores in the case of Canara Bank – incurred by awarding major work to people in close circles of politicians ) and incur immeasurable loss by way of reduced interest rate on loans through unethical competition, pulling the legs of one another, with personal ends of the key men, why the system should be shy in being honest to the people who serve the industry by granting them their dues. I hope wisdom shall take hold of you to correct the sins your predecessors committed and to make IBA an organization worth its name to take up wage related issues of bank men.

Thanking You,

Yours faithfully,

C N Venugopalan