Letter to Banking Division 27 12 2007

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

The Principal Secretary, 26^th December, 2007

Banking Division,

Ministry of Finance,

Govt. of India,

New Delhi – 110 001

Dear Sir,

Leaping in Darkness and Banking upon blunders

Through Gazette Notification dated 13^th July, 2002 Public Sector Banks in India amended Regulation 28 of the Pension Regulations as follows:

“Superannuation Pension shall be granted to an employee who has retired on his attaining the age of superannuation specified in the Service regulations or Settlements. Provided that, with effect from 1^st day of September, 2000, pension shall also be granted to an employee who opts to retire before attaining the age of superannuation , but after rendering service for a minimum period of 15 years in terms of any scheme that may be framed for such purpose by the Board with the approval of the Government.”

This was done at the behest of Indian Banks Association, the representative body of Indian bankers and the Government sanctioned the amendment blindly. Prior to the amendment also, banks were paying the superannuation pension to employees who retired prior to reaching the age of superannuation and with a service of 15 years, notwithstanding the fact that the Pension Regulations provided for payment of Pensions to those with a qualifying service of 20 years that too after attaining the age of 60 years. To ratify the erroneous and arbitrary payment the bankers made, the IBA mooted the amendment and the Government blindly approved it. It all amounted to creation of new law to cover up the misdeeds of the people who have power of the purse and authority. Prudent bankers know the need of legal backing for anything they do and still they disregard the laws of the land which form the premises of their existence.

The issue of granting second option on pension to bank employees, whom banks illegally and arbitrarily denied it while they amended the Pension Regulations in February, 1999 by deleting clause relating to “forfeiture of service for participation in strike” (on account of which, they did not join the Pension Scheme earlier when it was offered) is still pending in several High Courts across the country. This is a contingent liability that may increase the establishment expenses substantially. Without settling such old and important issues, IBA is in the process of mooting wage revision in the industry with substantial rise in Basic Pay and perks. A liberal wage hike will naturally increase the pension liability also to an unimaginable extent. Hence the earlier pending issue relating to second option on pension is to be considered in isolation first before thinking upon a wage revision in the industry.

The experts and luminaries in the banking field have, in the past committed many unscientific, arbitrary, illegal acts that axed the provisions of the Constitution of the democratic India, which resulted in the following anomalies:

1. Many a retired people who went out through VRS (remaining in the pension Segment) got salary and Pension concurrently for the left over service. They took up alternative assignments and are earning salary from other avenues.
2. Those who joined other banks after retiring from the parent institutions are drawing salary from the latter and Pension from the latter. In fact banking industry is paying them Salary and pension simultaneously.
3. The above category got the Pension which would otherwise be payable to them payable to them only after attaining the age of 60 got it much earlier.
4. The people who retired through VRS from the PF segment got deprived of the PF (employer’s share) that would have otherwise payable to them till the age of 60 from the date of retirement.
5. IBA has all along been signing separate wage pacts in respect of employees of SBI and employees of other banks, conferring distinct advantages to the former and the Government has been approving it blindly in spite of the fact that workmen from both segments were doing identical work. IBA and the government were discriminating identical people, thwarting the essence of the democratic nature of the Constitution of India.
6. IBA and Government have been instrumental in extending three retirement benefits ( Gratuity, PF and Pension) to SBI employees and only two retirement benefits ( Gratuity and Pension or PF) to other bank employees which is also a matter of utmost injustice and discrimination that has no parallel.

I hereby urge upon you to instruct the IBA to settle the issue of second option on Pension (on which a number of suits are pending in several High Courts) before considering any wage revision in the industry as otherwise, the prudent bankers would be committing further imprudent steps that will topple the budgets. There had already been two agitations, one on 27^th July, 2006 and 27^th October, 2006 over the issue and the agitation that was planned from 28^th March, 2007 has been stalled on an understanding that it would be settled before June, 2007. The matter is still pending and IBA may be asked to settle it before coming with any fresh wage pact without settling it.

Thanking You,

Yours faithfully,

C N Venugopalan

cc.to: Charirman, IBA, Mumbai

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

Letter to Finance Minister 17th April, 2006

C N Venugopalan Ex- Manager, Union Bank of India & Co-ordinator of PF Stream Bank Staff	“ Nandanam” Kesari Junction North Paravoor Kerala – 683 513
Phone No. 0484 2447994 Mobile: 9447747994

The Hon’ble Minister for Finance, Government of India, Ministry of Finance, New Delhi

17th April,2006

Dear Sir,

Denial of Pension Option and Pension to a segment of Bank Employees and Granting of Pension enhancement to State Bank of India employees – Discrimination and injustice involved

I invite your kind attention to my petition dated 20^th June, 2005 and a subsequent follow up letter dated 15^th December, 2005 in the matter of Union Bank of India, a public sector bank not extending me the benefit of pension through a fresh option for Pension that is legally to be extended to me. I note with much regret that the Government has neither acknowledged my letters nor given me any information regarding the disposal of the petitions. Copies of both the petitions are enclosed to facilitate quick reference. The details may kindly be kept on record so that I can obtain the status information / action taken report from the CPIO under the Information Act, 2005.

I inform in this connection that a new threat of strike is looming large in the banking industry with the sanction of enhancement of Pension in State Bank of India (“SBI” for short), which is a third retirement benefit in SBI in the context of a majority of the remaining bank employees not given Pension even as a second retirement benefit in lieu of Contributory Provident Fund. It is a matter to be known whether the employees of SBI enjoy any backward status so as to get three retirement benefits in sharp contrast with the employees of other commercial banks who are granted only two retirement benefits.

The understandings reached at the meeting of the Minister of Finance along with the officials of the Ministry with the management and staff of State Bank of India reportedly “in furtherance protecting public interest” for granting revision in Pension which is a third retirement benefit becomes a gesture of gross discrimination to the remaining employees in the industry, both serving and retired. The Government has bowed before the militancy and force of the striking employees and granted them about 250 percent of rise in the Pension, which is a third retirement benefit in addition to Gratuity and Contributory Provident Fund to SBI staff. The employees of other Public Sector Banks and Private Banks in India enjoy only two retirements benefits viz. (i) Gratuity and (2) either Contributory Provident Fund or Pension. Pension is not given to all employees alike. A good percentage of employees are forcefully retained in PF segment by illegally denying them a chance to exercise option for Pension. Under such circumstances, the understanding arrived at in the meeting on 9^th April, 2006 is discriminatory and unconstitutional involving infringement of fundamental rights enshrined in the Constitution. The government that has a responsibility to extend uniform compensation package to workmen doing the same work has now shown a partisan attitude in favour of SBI staff and enhanced the gap in the pay packets of SBI vis-à-vis that of other staff in Banking Industry. Creation of two segments of employees among workmen doing the same work is a gross injustice; quite opposed to the statute of the country as Equal Pay for Equal Work is the dictum to be followed.

SBI was a continuity of the Imperial Bank of India where Pension Benefit to employees existed. However, all the employees of the Imperial Bank retired. Though none of the present staff are in any way related to the erstwhile institution, the might of the SBI staff ensured continuance of Pension Scheme in SBI. Thus the employees of SBI enjoy Pension as third retirement benefit in addition to Contributory PF and Gratuity. Wonderfully, “to bring about parity with the other Bank Staff and their Pension Scheme”, they put up a demand for enhancement in Pension Rate and the Government granted their demand by granting 250 percent rise in the Pensions.

About 50 percent of the remaining employees in the Banking Industry in Public Sector and Private Sector are not given eligibility to Pension even as a second benefit. They are arbitrarily, illegally and forcefully detained in Provident Fund Segment by not allowing them to opt for Pension. In 1995, they were asked to exercise an option either in favour of Pension Scheme or to continue in PF stream. While extending the Option, the Pension Regulations of Banks contained a clause to the effect that participation in strike even for a single day would enable the Managements to forfeit past services of an employee. Joining the Pension Scheme entailed immediate lapse of the Contributory PF so far an employee has gained into the Pension Fund of the Banks. Moreover, forfeiture of past service for participation in strike would result in want of qualifying service to be eligible for Pension. In view of the twin disadvantages of losing CPF and Pension, many employees could not opt for Pension. The forfeiture of service clause was later scrapped from the Pension Regulations in the year 1999. But the Bank Managements are not fulfilling the legal onus on their part to extend fresh Pension Option to those who could not opt for Pension on account of the existence of the deleted clause in the Pension Regulations by extending a fresh chance of option.

Payment of Pension – a mandatory requirement.

I further bring to your kind attention the following decision of the Constitution Bench of the Supreme Court that makes payment of Pension mandatory for employees:

Constitution Bench of Supreme Court in Nakara Case (17 12 2002).

“Pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and it creates a vested right which is statutory in character because the Pension Rules 1972 are enacted in exercise of the power conferred by the proviso to Article 309 and clause (5) of Article 148 of the Constitution”.

“That pension is not an ex gratia payment but it is a payment for past services rendered”

“It is a social welfare measure rendering socio-economic justice to those who in the hey day of their lives carelessly toiled for the employer on an assurance that in their old age they would not be left in the lurch. The pension payable to a government servant is earned by rendering long and efficient service and therefore can be said to be a deferred payment or the compensation for service rendered”.

“Pension is not a charity doled out to the retired employees, but it is their legitimate and inalienable right earned by the sweat of their brows”.

In view of the above decision, banks do have a statutory liability to extend the benefit of pension to all the employees. Pension is a legitimate establishment expense that the employer has to meet invariably.

The specific grounds entitling the employee to a fresh option in favour of Pension Scheme are enumerated in detail in the petition dated 20 06 2005 submitted to the Hon’ ble Minister (Copy enclosed).

Significant Accounting Policies.

Banks being financial institutions, have to prepare the correct working results that have to be published for the information of the Public. Significant accounting policies make it imperative that Banks make adequate provision for meeting all legitimate establishment expenses for determining the actual profits. Unless and until adequate provision is made in respect of the Pension obligation which is a legitimate establishment expense, the profits reflected in the Balance Sheets would be unduly inflated ones. Distribution of such inflated profits as dividends would be quite inappropriate. In the process, the amount payable as Pension to retired employees and the funds to be transferred to Pension Fund (representing future employers’ PF contribution in respect of the employees on the rolls of the Bank at the time of commissioning the Pension Scheme) are also treated as part of the Profits and distributed to shareholders as dividend. It tantamount to an action analogical to robbing Peter to pay Paul.

Cost aspect and Pension

Extension of fresh option is something, which Banks can do without incurring any additional costs. The financial obligations can well be met without incurring any extra expenditure than the committed costs at the time of commissioning the Pension Scheme in the year 1995 for the following reasons:

1. At the time of commissioning Pension Scheme, Banks had the liability to make PF Contributions in respect of all employees on the rolls in 1995 till their retirement. This was an already committed cost. Such contributions should, notionally be worked out and ploughed back into the Pension Fund to augment it. There is a backlog of about one decade. The amount will work out to Rs.10, 000 Crores to Rs.20, 000 Crores.

2. The balances available in the PF accounts of the present PF stream employees who may opt for Pension through fresh Pension Option which will be in the range of Rs. 2.5 lakhs to Rs. 5.00 lakhs. This can augment the Pension Fund of Public Sector Banks by about Rs.50, 000 to Rs.60, 000 Crores on a rough estimate. This amount along with the future contributions in respect of such employees till their retirement (which was also a committed cost of the Banks at the time of commissioning the Pension Scheme) should also be made available for augmenting the Pension Fund in all fairness.

3. In respect of those who are recruited after inception of Pension Scheme whom the Pension Scheme compulsorily encompasses also, keeping the pay package at the same level, the contributions should be made into the Pension Fund. This also involves no additional cost since Banks had an obligation to make contributions in respect of such employees as per the provisions existing in 1995.

4. The exercise pertaining to the above three items have to be carried out for the past one decade and transferred into the Pension Fund.

5. Judicious investment of the Pension Fund running several Crores or a portion of it in Mutual Funds will ensure substantial returns that will augment the Pension Fund substantially. This will be an additional opportunity for Fund managing Banks like SBI, PNB, Canara Bank LIC, UTI etc.

6. All the employees who opt for Pension are not going to retire in a lot and create a Pension Obligation for the Banks and the liability will be growing only in a phased manner. On account of death and other cessation of Pension of the present pensioners, cessation of family Pension, the liability will be getting extinguished in several cases and some sort of balancing will be available in the process.

7. A fresh Option will ultimately result in substantial establishment expenditure as it may induce a number of employees to quit the present jobs with a less attractive compensation package.

8. Option to remain in PF in other words should be retained as a terminal benefit to only those who need it for some personal reasons or to those who will not have qualifying service to be eligible for Pension.

Financial Constraints –an illusion

It was true that some of the Banks like Syndicate Bank, UCO Bank Indian Bank etc were ailing ones a decade back. All of them have turned corner and some have shown fantastic working results. Want of paying capacity is a fictitious thing. Banks shed several Crores through write off and relief to defaulters in circumstances that are not genuine in many a case. FM has apprised the Parliament that Rs.16, 582 Crores was written off during the past three years as Bad Debts. Ground rules and code of ethics for securing business business are forgotten altogether. Banks competing with each other, take over advance accounts from others by offering lesser and lesser rates and apply cosmetics to the performance of the key men. The banking barons drain out the vital fluid of the Banking Industry in plenty of Crores of Rupees every year through take over of Loan accounts at reduced interest rates from other Banks. Performance should invariably be gauged with level playing ground given. Securing business by giving interest concession is totally absurd. On one side Banks join hands together by sharing ATMs and establish common service network to reduce operating costs. The other side they pull the legs of one another by unscrupulously giving interest concessions to big borrowers. The customers who have bargaining power gain and the amounts they gain represent loss of vital fluid of the industry. The deregulated rates of interest further offer scope for corruption and nepotism. The deserving poor never get a fair treatment. The big industrialists flourish and their workmen also get all good perquisites. The banks which finance in furtherance of such industries claim want of capacity for paying Pension to the staff who toiled through and through for their organizations. This is the sad situation. The amounts payable to them by way of establishment expenses are denied. The benefit is accruing to the key men heading the different Banks who are able to show higher volume of business. The interest rates have been deregulated. RBI and the Government do not impose the required control and they simply sit enjoy the game like watching a Cricket.

We are also aware, several Banks including a PSB viz. New Bank of India monitored by RBI and controlled by stalwarts in the industry vanished into obscurity. Paravoor Central Bank Ltd., Nedungadi Bank, Bank of Madura etc. are some of them. Proper control was wanting. Key men heading such banks had no integrity too. Banking industry has provision to contain the gigantic losses arising out of manipulations and mismanagement and the entire staff burden is shifted to some other Bank. There is however no money to provide a living to those who toiled and sacrificed their entire career for the organizations and made them what they are now. One has naturally to think how Banks would have met the Pension obligation, had all the employees opted for it at the time when the offer of Pension was made. Pension is invariably not a consideration for an option letter given, it is the consideration for service rendered to the organization and a deferred wage payment as underlined by the Constitution Bench of the Supreme Court in the Nakara Case.

All the foregoing will testify that extension of fresh Pension Option and payment of Pension to the serving and retired employees are mandatory requirements and have to be considered expeditiously to do away with constitutional violation and infringement of fundamental rights. The matter may please be examined from legal angle as also from social angle and Banks may be asked to expeditiously extend Pension Option to the staff who seeks it. In view of the extension of Pension as a third benefit in SBI, it may also be considered as a third benefit in other Banks also by paying Pension along with the Contributory Provident Fund benefit for ensuring industrial parity, justice and fair play.

The strike in SBI for six days from 03 04 2006 to 08 04 2006 over the Pension issue resulted in untold sufferings to the general public. Impending similar action in other banks to secure their right to Pension also may cause extreme hardships to the community. Hence I earnestly request you to settle the Pension Issue in other Public Sector Banks in an expeditious and befitting way to avoid labour unrest.

As Convener of the PF stream employees in Banks, I intend to move a Public Interest Litigation Pension in the Apex Court for getting the issue redressed and for averting the possible inconvenience that may be occasioned to the public as the Trade Unions in other Commercial Banks may follow suit as in SBI. As a pre requisite for exhausting all remedies before it, this representation is submitted

I further request that the receipt of this letter may please be acknowledged and action initiated on it may be kept ready with the CPIO from whom I can obtain requisite information under the Information Act, 2005 and submit to Court, should situation arise.

Thanking You,

Yours faithfully,

C N Venugopalan

Letter to Mr. P Chidambaram 15 January, 2007

C N Venugopalan Ex- Manager, Union Bank of India	“Nandanam” Kesari Junction North Paravoor Kerala – 683 513
Phone No. 0484 2447994 Mobile: 9447747994 e-mail cnvenu@yahoo.com

Shri. P Chidambaram, 15^th January, 2007

Hon’ble Minister for Finance,

Govt. of India,

New Delhi

Dear Sir,

Pension for all bank employees

I take the privilege of addressing this letter to the Finance Minister who has made an indelible imprint through legendary performance for bringing Indian economy to the forefront of progress through a series of financial sector reforms. A versatile genius and a responsible minister committed to the welfare of the subjects as you are, you will be keen to fine tune the system so as to uphold the rich heritage and tradition India has by weeding out anomalies from your territory. Reflexes of the entire subjects shall go with the Minister and take him to towering glory when he renders justice to them by fulfilling the commitment he has given to them while swearing in and assuming responsibilities. Prevalence of glaring anomalies in the scenario will, no doubt, undermine the prestige of the system and belittle those responsible. Being at the helm of affairs in the economic front of the nation, the Finance Minister will be most particular to render justice to the entire subjects. He can not be the minister for the welfare of any particular segment of people an will be the minister for the welfare of each and every citizen. He can not differentiate between the workmen of SBI and the workmen of the rest of the banks. It is my sincere feeling that the Minister having taken solemn oath to protect the sanctity of the constitution, he will take immediate steps for doing away with discrimination of any kind among people doing identical work so as to preserve fairness and equality and to uphold the high values of the constitution. In such a context, I thought it worthwhile to bring to your notice the anomaly in the compensation package on retirement of officers and workmen in the banking industry.

India is drawing itself close to the Diamond Jubilee of independence. It is however dismaying to note that the water that has flown through the holy rivers failed to achieved the requisite amount of cleansing for the country. In the pre independence period, the British were perpetrating atrocities in the country. The British influence has not yet gone. They are now incarnate in the bureaucrats who are percolating discrimination and denying justice to the subjects. In the process, they are shaking the foundation of the constitution. The banking bureaucrats under the banner of the Indian Banks Association carved out an empire of their own, with rules and regulations framed by them applicable to it, and did things that ran counter to the constitution and infringed the fundamental rights enshrined it. The substantive law of the country had little or no application to the territory. They infused discrimination among people doing the same work and conferred distinct privileges to the employees of State Bank of India and extended step motherly treatment to the rest of the banks including the subsidiaries of SBI by signing separate wage pacts. They submitted unsound proposals and got Government approvals for them. The discrimination and disparity went on with each wage revision especially as they signed separate wage pact in respect of SBI and the rest of the banks. They proved themselves to lack credibility through their own wrong deeds.

In the process of commissioning the Pension Scheme, the banks denied the benefit of the scheme to about 8 lakhs bank men by keeping them out of it. This much employees could not join the scheme within the original time frame on account of the clause relating to forfeiture of entire service for participation is strike and those relating to requirement of minimum qualifying service of 20 years which existed in the Pension Regulations that stipulated surrender of the CPF contribution of the members to the Pension Fund of the Banks as the basic requirement for joining it. Banks illegally denied the employees a chance for fresh option while beneficially amending the Pension Scheme by scrapping the clause relating to forfeiture of past service and reducing the minimum qualifying service from 20 years to 15 years. Ironically, the scheme that compulsorily extends the benefit of Pension to the new recruits taken after 1995 denies the benefit to the existing employees who have already put in years of service even against surrender of their CPF balance of Rs.4.00 lakhs to Rs.6.00 lakhs to Pension Fund. The Pension benefit is thus denied altogether to bank employees who work for banks for 30 to 40 years in a country where the members of the legislature or Parliament earns a Pension out of the public exchequer on sitting for a small term of two years despite their subsequent ouster from office on account of public disapproval or moral turpitude.

Things became worse when the Government conceded to the demands of the SBI employees in April, 2006 by approving hike in Pension in the name of bringing parity with the Pension Scheme obtaining in other banks. While about 70 to 75 percent of employees in the rest of the banks did not have Pension even as a second benefit, the demand of SBI employees was considered, making them eligible for three retirement benefits in sharp contrast with only two benefits in the other banks. Parity was established with something illusory and the principles of equity and equality to similarly placed got tumbled down. All lofty principles the nation and its constitution had envisaged got upset in the sixth decade of independence of the nation.

It really becomes a matter of pity that even on realizing the mistakes, the bureaucrats are not showing the wisdom to admit them and to take requisite corrective steps. It is well known to them that extension of the second option on Pension is something inevitable that can be done without any expenditure in excess of the committed establishment costs obtaining in 1995. What is necessary is only a positive approach to the issue and a willingness to correct the earlier stand taken. The unscientific deeds sans any intelligent reckoning have engendered much turmoil and resentment among the working clause and banking services gets paralyzed frequently on account of labour unrest. The net outcome is inconvenience to the public and bad reputation to the Government. Any further inaction in the matter is effort to patch a hole with darkness. The threat of a nation wide agitation of bank employees is looming large in the banking scenario in furtherance of a second option on Pensions. It is felt ideal that the government shows the magnanimity to settle the issue on its own without driving the work force out of their seats and putting the banking operations to ransom and finally conceding to the demand of the work force as done in the case of SBI employees last year. Pension is to be approved to all those, both working and retired, who have the minimum stipulated qualifying service as a third retirement benefit as in the case of SBI employees so as to remove discrimination. There is cent percent justification for considering the retired also irrespective of the mode of exit like Voluntary Retirement, Resignation or normal retirement since the contribution each employee has made to the organization and to the country is since the same. The Pension Scheme commissioned in 1995 encompassed under it those who retired after 01 01 1986. The members of the Parliament or Assembly who have resigned or expelled after a term of two years earn a Pension. There is no justification in denying the benefit to the retired or resigned or those who are sent out through special packages so long as similar persons get such benefits. It is my sincere desire that the Hon’ ble Minister be pleased do justice to the deceived and avert the possibility of a strike of the employees for second option on Pension in banks.

I shall be circulating copy of this letter through e-mail to the bank employees at large, all over the country, so that the action of the Minister in settling the issue is hailed by each and every one and all of them have allegiance to the Minister and his organization.

I am enclosing a copy of the fortnightly “Business Economics” (Dec.16 – 31 issue), containing the article on Indian Banking Sector: A Saga of labour unrest” contributed by me in its pages 22 and 23 that will give you a correct version of the picture. The annexure to this letter also will give you a clear picture of the anomalies as this will bring home to you the need for immediate corrigendum action by giving appropriate directions to the concerned.

Thanking You,

Yours faithfully,

C N Venugopalan