"Wilful default of bank loans should be made a criminal offense,”

The top 30 bad loan accounts in the case of 24 banks add up to ₹70,300 crore.

Mumbai, July 18:

Banks should spring into action by recovering cash from their top 30 bad loan accounts instead of just monitoring them, according to the All-India Bank Employees Association (AIBEA).

The Association has assessed that the top 30 bad loan accounts in the case of 24 banks add up to ₹70,300 crore.

Speaking on the eve of the 45th anniversary of bank nationalistion, Vishwas Utagi, Vice-President, AIBEA, said, “If banks mount recovery efforts in the case of top 30 accounts and resolve cases which have piled up in the corporate debt restructuring cell, then the Government need not recapitalise State-owned banks.

“Moreover, these banks will not be hard-pressed to go to the public by issuing shares.”

As at March-end 2014, the CDR cell was trying to resolve 280 corporate accounts aggregating ₹2,42,259 crore.

The Association wants huge bad loans due from large companies recovered by taking strong action against the defaulters.

“The list of such bank loan defaulters should be published by the RBI. Wilful default of bank loans should be made a criminal offense,” said the Association in a statement.

Though the Budget announced the setting up of 6 more Debt Recovery Tribunals, Utagi said this is inadequate. Thousands of cases of bank loan defaults are already pending and unless an enlarged and effective mechanism is built up, banks would not be able to recover their dues.

Hence, more D R Ts and Fast Track D R Ts have to be set-up to deal with high volume loan defaults so that banks will be able to recover the loans.

Government rejects P J Nayak panel view of cutting stake below 50%

NEW DELHI: The government today said it has rejected P J Nayak committee recommendations of lowering government holding in banks below 50 per cent even as it is considering other suggestion on providing greater autonomy.

"That particular part of the P J Nayak Committee has not been favourably considered because we want to keep the shareholding of the government at minimum 51 per cent," Department of Financial Services Secretary G S Sandhu said.

"It has been clearly announced in budget also that the government wants to maintain public sector character of the banks," he said on the sidelines of an event organised by PHD Chamber of Commerce and Industry here.

However, the government is considering issues related to greater autonomy to bank including raising tenure of Chairman and Managing Directors (CMDs) of banks.

"We are looking at providing longer tenure to CMDs. We are proposing five-year tenure. Then separation of chairman and managing directors. These are proposals yet to be decided," he said.

Besides, he said, better quality of independent directors with domain knowledge is also one of the proposals for strengthening of board.

RBI set-up a committee under chairmanship of former Axis Bank chairman P J Nayak to Review Governance of Boards of Banks in India. It gave various recommendations including diluting government stake below 50 per cent.

On the capital raising issue, Sandhu said the Finance Ministry would come out with detailed blue print for disinvestment of the public sector banks in a month or two.

Public sector banks requires Rs 2,40,000 crore of equity capital over next 5 years to comply with Basel-III norms.

The government would disinvest in two or three PSU banks in the current fiscal itself, he said.
He also said that there is a proposal to create a asset reconstruction company (ARC) where some of these banks and the power companies can join hands and can set up a company that will revive incomplete projects and hand it over back to the promoter after revival.

"Similarly for the road sector there is a proposal from the National Highways Authority of India which we have welcomed. They also want to form an asset reconstruction company for the road sector. Because a large number of road projects they are incomplete...and they have not been put to commercial use," he said.

"So with the help of ARCs these projects can be completed they can be put to commercial use and then money can start flowing back. That is another thing that we are looking at," he added.

http://economictimes.indiatimes.com/news/economy/policy/government-rejects-p-j-nayak-panel-view-of-cutting-stake-below-50/articleshow/38382047.cms

“Make top executives of the public sector banks accountable in respect of sanctions of credit etc ”: AIBEA

To reign in the ballooning non-performing assets (NPA) in public sector banks, chairman and managing directors (CMDs) and executive directors (EDs) should be made accountable, a leading bank union has demanded.
"A system has to be evolved to ensure accountability and responsibility on the part of the CMDs and EDs of the public sector banks in respect of sanctions of credit etc. which ultimately become distressed assets," All India Bank Employees' Association (AIBEA) said in its pre-budget memorandum submitted to the government.
"We are making the demand formally for the first time though we have been asking for the same for a long time," C.H. Venkatachalam, AIBEA general secretary told IANS Saturday.
He said the CMDs and EDs of government-owned banks are not subject to service/conduct/disciplinary rules on the pretext that they are hired on contract.
"But they do grant loans and there is nothing to hold CMDs and EDs responsible if their decisions hurt the banks and the loans turn bad," he said.
Recently AIBEA released a list of 406 bank loans amounting to Rs.70,300 crore that went bad and had demanded declaration of wilful default a criminal offence and investigation of the nexus between the borrowers and bank officials.
"A review should be made to identify the beneficiaries whose debts/loans availed in the banks with interest was written off," said the union in its pre-budget memorandum.
The AIBEA has also demanded that the bank loan defaulters should not be permitted to contest assembly or parliamentary elections.
According to AIBEA, floating of asset reconstruction companies (ARC) as a tool to reduce non-performing assets (NPA) should be discouraged and the NPAs should be actually recovered.
"Auction of NPAs should also be stopped as the same involves huge write offs ultimately resulting in heavy losses to the banks," the union has said. 

http://www.business-standard.com/article/news-ians/make-top-executives-of-government-banks-accountable-union-114062100511_1.html#.U6XAbfnQdSQ.facebook

 

OUR STAND POINTS ON APAR AND BATCH CONCEPT UPHELD BY HON’BLE MADRAS HIGH COURT

AIUBOSA CIR GS: 185 / 2013-14 dated 06.06.2014

ALL INDIA UNION BANK OFFICER STAFF ASSOCIATION

(Affiliated to AIBOA) Phone: 9381036405 / 9791027140

Email: dsganeshanaiboa@gmail.com : dsganesanubi@gmail.com

Address: Don Flats, I Floor, No.19, SRP Colony 7th Street, Peravallur,

Chennai 600082

Cir.No.GS:185 / 2013 - 14

06.06.2014

To

All Officers

Dear comrades ,

OUR STAND POINTS ON APAR AND BATCH CONCEPT UPHELD BY HON’BLE MADRAS HIGH COURT

The issues confronting the officers in our Bank are:

1. APAR Marks: It is our organisation in our Bank, through judicial intervention in 2012, brought substantial relief to officers in the matter of APAR marks which is considered an importantingredient in the promotion process. Not only that, we have brought in, in the process, anappeal provision against the APAR marks awarded by the higher authorities, as an element ofbias prevails in awarding marks to officers. In the last process of promotion (2013-14),management had implemented sincerely the procedure established by our organisation inthe bank.

But this time (2014-15), the bank has altered the “applicability of APAR marks” only for thepromotion process from Scale 1 to 2 and Scale 2 to 3, i.e., instead of average of 75% marks

for the preceding three years, prescribed in the Government Guidelines, every year theabove mentioned officers are to secure 75% marks. Our organisational contention is that in

the same promotion process (2014-15), there cannot be two different yardsticks for selectionpertaining to APAR marks. Our sincere appeals have not evoked the reasonable response

from the management to correct the unscientific application of rules.

2. UNIFORM APPLICATION OF BATCH CONCEPT FOR PROMOTION:
   Bank while recruiting the Scale 1 officers in the year 2011 permitted the new recruits to join on or before 04.07.2011. There were officers who had reported for duty in July 2011.
   As the number of eligible officers is falling short, the bank has considered a relaxationof 3 months and 1 day. The government guidelines provide inclusion of batch for the
   purpose of promotion. We have requested the Bank to include the entire batchof officers so as to enable them to participate in the process of selection.
   Bank has failed to see the reasoning behind our arguments.

3. CONVERSION OF RDOS – A REPEAT EXERCISE DEMANDED:
   The promotion policy for officers provides conversion of specialized category to main stream on completion of five years. Accordingly, we have taken up the issue of conversion of Specialized Category of Officers to

Main Stream. The paradox of conversion exercise is that a RDO having 5 years of service to his credit to head the branch as Branch Manager is declared ineligible to join main stream based on 3 to 5 minutes personal interview. In our Bank, a directly recruited officer on mere completion of 2 years is eligible to move to Scale 2, whereas even after completion of 5 years of service and handling the branch as a Branch Head is denied of conversion in the same scale.

The so called officers’ federation has already enjoying the comfort of hibernation. As advised by the AIBOA leadership, our organisation having committed to the welfare of officers’

community in our Bank has sought relief through Judicial Intervention.

 “We are happy to report that the Hon’ble High Court of Madras has passed an order directing the Bank to allow the members of our organisation who were affected by APAR as well as Batch Concept to participate in the examination”.

Please await for further communication.

With Greetings,

Yours Comradely,

(D. S. GANESAN)

General Secretary

PLEASE CIRCULATE AMONG ALL OFFICERS

PROMOTION PROCESS – REDUCTION OF APAR MARKS.

	Canara Bank Officers’ Union[Regd.] [AFFILIATED TO ALL INDIA BANK OFFICERS’ ASSOCIATION] A.K.Nayak Bhavan, 2nd Floor 14, Second Line Beach, CHENNAI-600 001

Mobile: President 9444967883 / General Secretary 09488905783 / Phone: 044-25265511 FAX: 044-25249081

Email: cbou.hq@gmail.com / web: www.cbou.org

REF : CBOU: 15: 2014

DATE : 13 05 2014

SRI R K DUBEY

CHAIRMAN & MANAGING DIRECTOR

CANARA BANK

112 J C ROAD

BANGALORE 560 002

Dear Sir

Sub : PROMOTION PROCESS – REDUCTION OF APAR MARKS.

We would like to bring to your kind notice that Government of India vide their letter dated 14 3 2012 issued uniform guidelines on Promotion in Public Sector banks covering various provisions , including the eligibility years of service for participation in scale promotion process in PSBs.

According to the guideline issued by the Department of Finance and their subsequent relaxations, the GOI issued guidelines under APAR (Annual Performance Appraisal Report) a candidate should have secured 60% whenever the written test is conducted by IBPS and minimum of 75% marks where no test is stipulated, with enabling provision for reduction /relaxation by the board with the prior permission of the Finance Ministry.

However, taking into consideration the following ground realities, witnessed during the Special Promotion process 2013, we feel that there is strong case for further reduction/relaxation of APAR Marks in our Bank so as to enable maximum number of eligible officers/Managers to be the beneficiaries of the promotion process.

• The Number of eligible candidates gets drastically reduced.
• In respect of Scale I to II Promotion number of candidates qualified in the written test was far below the number of declared vacancies.

In this connection, we wish to bring to your kind notice and consideration, that Corporation Bank also a Public Sector Bank, has very recently declared reduction/relaxation in APAR Marks, with the permission of the Bank’s Board, for both Merit and Seniority Channels to 40% ( for SC/ST 35%) from 75%/60% respectively.

It is also not out of place to mention that our national organisation AIBOA, has taken up the matter with Department of Finance in this regard for uniform guidelines in this regard and copy of their communication is enclosed for your perusal.

Kindly do the needful for reduction/relaxation in the APAR Marks so that maximum number of officers would be beneficiaries of the promotion process.

Kindly acknowledge the receipt.

Thanking you

Yours faithfully

M A SRINIVASAN

GENERAL SECRETARY

- AIBOA OPPOSES BACKDATED BACK DOOR PRIVATISATION OF BANKING BY STATE BANK OF INDIA

Phone: 25265511 / M 9840645081 / FAX: 044-25249081 / e mail: aiboa.hq@gmail.com www.aiboa.org

PRESS STATEMENT ISSUED BY

S.NAGARAJAN, GENERAL SECRETARY,

ALL INDIA BANK OFFICERS ASSOCIATION

BACKDATED BACK DOOR PRIVATISATION OF BANKING

BY STATE BANK OF INDIA - AIBOA OPPOSES

Our attention has been drawn to a report pertaining to the State Bank of India management entering into an agreement with Reliance Money Infrastructure Ltd., on 25^th February 2014 giving retrospective effect for the said understanding with effect from 5^th October 2013 to handle the all the front office Banking assignments to a Private company viz., “Reliance Money Infrastructure Ltd.,” as a business facilitator/correspondent.

The basic function of a Banking company is to take the money as deposit and lend the same to the needy individuals as advances. Banking Institutions have already forgotten this basic important function and slowly succumbing to sell third party products like mutual funds, Insurance and Units etc., resulting in the Institutions now are “also do Banking”.

It should not escape the attention of the Public at large, that Reliance capital is one of the “aspirant” for the “Banking License” another extended arm of Anil Ambani Group Company, which could not get the same in this recent release of sanction given by Reserve Bank of India.

AIBOA strongly opposes the action of SBI, of non-recruiting the required number of staff members to handle the business of the Bank, resorting to this exercise amounts to “back door privatisation of the Bank with back dated effect” to a company, which was not considered for new Banking license by the controller of Banking system.

This move of SBI Management is nothing but “outsourcing of essential services” coupled with affecting the privacy of the individual account holder, as they are already handling very many similar services of Banking activities.

AIBOA, urges upon the authorities in Central Bank of the Country and also the Government of India to step in the process of reversal as the past experience of the private entities are not worth mentioning.

/S.NAGARAJAN/

GENERAL SECRETARY 05.05.0214

REDUCTION IN “APAR” MARKS UNIFORM APPLICATION TO ALL BANKS REQUESTED

ALL INDIA BANK OFFICERS’ ASSOCIATION CENTRAL OFFICE] A.K.Nayak Bhavan, 2nd Floor 14, Second Line Beach, CHENNAI-600 001

Phone: 25265511 / M 9840645081 / FAX: 044-25249081 / e mail: aiboa.hq@gmail.com /web: www.aiboa.org

MIN:RBI:57:2014

May 7, 2014

The Secretary

Department of Financial Services

Government of India

NEW DELHI

Sir,

REG: GUIDELINES ON PROMOTIONS IN PUBLIC SECTOR BANKS

REDUCTION IN “APAR” MARKS

UNIFORM APPLICATION TO ALL BANKS

REF: 1. Your communication dated 14.03.2012

2. Your communication dated 04.04.2013

The guidelines for promotions in Public Sector Banks was issued on 14.03.2012, wherein various provisions were dealt with, notable amongst them are

[a] Channel of promotion and minimum experience requirement at various levels

[b] Minimum 75% marks to be secured in Performance appraisal for fast track/merit channel

2. Subsequently, vide the second communication referred herein above, the minimum requirement of “APAR marks” relaxation, with approval of the Bank Boards, to an average of 75% marks of APAR with a minimum of 60% in each preceding five years.

3. The above guidelines are applicable to all Public Sector Banks without any exception or deviation. We have been given to understand that Corporation Bank having its headquarters in Mangalore, has taken up with your department the subject matter of APAR marks and the Ministry has reported to have relaxed the eligible marks under APAR to 40% / 35% to general category /SC/ST category respectively.

4. Accordingly the Board of the Bank has reduced the Annual Performance Appraisal Report marks to 40% marks for the General category and 35% marks to for SC/ST category and issued the circular for initiating the promotion from Scale III to IV, Scale IV to V, Scale V to VI and Scale VI to VII, by relaxing the eligibility years of service.

5. There are certain contradictions in implementing the above guidelines. They are:

[a] When the eligibility years for participation in the promotion process is reduced to 2 years or less than 5 years, obtaining 5 years APAR marks is incorrect and non-implementable one.

[b] Relaxation in APAR marks from 75% to 40% / 35% should be made applicable to all banks and to all channels.

5. As the Banks are getting into the “promotion mode” subsequent to the finalisation of yearly accounts, we request you to issue appropriate instructions to all Banks immediately.

Please expedite the instructions so as to enable the eligible officers with the revised/reduced marks of “APAR” from the present stipulation of 75% or 60% / 40% / 35%.

Yours faithfully,

/S.NAGARAJAN/

GENERAL SECRETARY

cc to:

The Chairman, Indian Banks’ Association, Mumbai

All Chairman and Managing Director, Public Sector Banks

CBOU's suggession for the Annual transfers 2014.

REF : CBOU: 12: 2014 DATE : 04 04 2014

The General Manager

CANARA BANK

HR Wing

Head Office

Bangalore

Dear Sir

Sub : TRANSFERS 2014 – OUR SUGGESTIONS

Further to our letter CBOU: 02: 2014 dated 08 02 2014 we suggest the following for the Annual transfers 2014.

1. There are 500 Officers promoted from Clerical Cadre during this year 2014 . Such promotee Officers may be provided placement to nearby circles based on the age.
2. It is also a fact that our Bank is going for a substantial expansion of branches and it is expected that by this fiscal end the number of our branches will be around 5700 from the present level of 5000.
3. In view of the opening of new branches especially at Northern states, our young Probationary Officers who are working in South India may be given preference and those who have completed 1 year of service in South India be given their choice of place or their native state.
4. IBPS has released list of selected Officers for bank and these POs who are to join our Bank during this year may be given placement in those areas where Prob Officers have already completed 1 year and above.
5. The Lady Officers/Managers who are transferred out of their state are to be brought back to their native state after completion of 2 years.
6. Allotment of Officers/Managers to all circles including intra state circles.
7. Transfers on one to one basis be done away with except on genuine grounds and

only allotment basis transfers are to be ensured.

Thanking you

Yours faithfully

M A SRINIVASAN

GENERAL SECRETARY

The hard earned savings of the peoples of our Nation is utilised to write off the bad loans in the Banks.

 

ALL INDIA BANK OFFICERS' ASSOCIATION

MIN:RBI:42:2014

April 3. 2014

Hon’ble President of India

Government of India

NEW DELHI

Respected Sir,

REG:   ALARMING INCREASE OF BAD LOANS IN THE BANKING SYSTEM-

            REMEDIAL ACTION TO BE INITIATED.

On behalf of the citizen of our Nation and also as a conscious Trade Union of Officers, believing and practicing the avowed principles of “Nation First” “Institution second” and “individual Third” approaching you, as your are the First Citizen of our sovereign Nation and also majority stake holder in the Public Sector Banks, deem fit to place the facts before you for serious consideration.  The details are as under:

1.    1. Salient Features related to Banking system – Deposits + Advances

[a] Aggregate Deposits                       Rs. 75,49,04,000 crores

[b] Aggregate Advances                      Rs.57,89,92,000 crores

[c] Investments                                       Rs.22,32,24,000 crores

2.    2. Increasing bad loans –Gross NPA

                                                                                                                                                            Rs.  in crores

S No.	Bank	March 2012	March 2013
1	Allahabd Bank	2058	5137
2	Andhra Bank	1798	3714
3	Bank of India	5894	8765
4	Bank of Baroda	4465	7982
5	Bank of Maharashtra	1297	1138
6	Canara Bank	4032	6260
7	Central Bank of India	7273	8456
8	Corporation Bank	1274	2048
9	Dena Bank	956	1452
10	Indian Bank	1850	3565
11	Indian Overseas Bank	3920	6607
12	Oriental Bank of Commerce	3580	4183
13	Punjab National Bank	8719	13465
14	Punjab & Sind Bank	763	1536
15	Syndicate Bank	3183	2978
16	UCO Bank	4086	7130
17	Union Bank of India	5450	6314
18	United Bank of India	2176	2964
19	Vijaya Bank	1718	1532
	Nationalised Bank	64496	95233
20	State Bank of India	39676	51189
21	SBBJ	1651	2120
22	SBH	2007	3186
23	SBM	1503	2081
24	SBP	1888	2453
25	SBT	1489	1750
26	IDBI Bank	4551	6450
		1,17,262	1,64,461

3.    3. First Four Bad Loan Borrowers in Public Sector Banks

                                                                                                              Quantumwise Rs.in crores

	2009-10	2010-11	2011-12	2012-13
Gross NPA	59927	74664	117262	164461
In top 4 bad loans a/cs	8418	16957	17029	22666

4.    Top NPA Accounts of Banks.

  Rs.   in crores

Banks	Gross NPA	Amt.	Top 30 A/cs _% Gross
Nationalised Banks	1,11,209	48406	43.50
SBI Group	71,620	15266	21.30
Public Sector Banks	1,82,829	63,672	34.83

5.    5. Gross NPAs of above Rs.1 crore Number Accounts/Amount: Rs.  in crores

Bank	March 2010		March 2011		March 2012
	A/cs	Amt.	A/c	Amt.	A/c	Amt
SBI	1262	8533	1527	11406	2419	23320
PNB	188	826	133	1803	709	5295
IDBI Bank	234	1598	371	2125	579	3682
Bank of India	350	2809	236	2522	507	4268
All other 23 PSBs	2065	12843	2322	16777	3081	31697
	4099	26629	4589	34633	7295	68262

6.    6. Profit earned and appropriated Rs.In crores

Year	Operating Profit	Net Profit
31.03.2007	42406	20310
31.03.2008	49819	26591
31.03.2009	66604	34372
31.03.2010	76905	39257
31.03.2011	100065	44900
31.03.2012	112289	47483

7.    7 Bad loans written off by the Banking system

                                                                                                                                                          Rs. in crores

Year	PSBs	Old PVT Banks	New Pvt.Banks	Foreign Banks	Total
2007	9189	610	1232	690	11621
2008	8019	724	1577	1334	11654
2009	6966	616	5063	3350	15995
2010	11185	884	6712	6238	25019
2011	17794	682	2336	3083	23895
2012	15551	671	3024	1646	20892
2013	27013	863	3487	855	32218
	95717	5050	23431	17096	141294

From the above it goes to establish that the hard earned savings of the peoples of our Nation is utilised to write off the bad loans in the Banks.

The following actions, considering the requirements of the various agencies, may please urgently be initiated to save the Public Sector Banking and also restore its health.

[a]        An external authority / committee with members of proven integrity and high moral standing should be entrusted with the responsibility of auditing the accounts of Public Sector Banks as at the close of 31.03.2014 within a fixed time schedule and the reports are to be submitted to you.

[b]        Right from 1993, the Chairmen who are responsible to conduct the affairs should be made accountable for their dereliction of duties due to which the present situation has arisen.

            As per the practice in vogue, large loan proposals are considered by the committee consisting of General Manager’s of the Bank.  Hence, even the proposals processed by the GM’s committee often turned as a bad loans.  It is relevant to quote, the RBI’s observations on committee method of sanctioning loans should be done away with, as this did not hold any single individual accountable.  The committee members should also be held accountable.

[c]        Together with Chairman, the Government representative and the RBI representative, who are expected to take care of the affairs of the Public Sector Banks should also be made accountable for their failure to check the deviations during their tenure as the member of the Board.

[d]        Urgent steps are to be initiated to declare the defaulters who have sufficient resources to clear the dues of the Bank and still not cleared the loan as wilful defaulters under criminal procedure code.  Criminal procedure code/Indian Penal code should be suitably amended to define the “wilful defaulters” of the Bank loan including the diversion of Banks funds utilised for the purpose “other than the one” for which it was availed.  It should be treated as “criminal act” with consequent punishment.

            In case of the Limited companies / corporates, full time or part time directors are also to be prohibited to contest the elections in the event of the said Limited company have failed to clear the loan availed from the Public Sector Banks.

            CEO/promotee Director of the defaulting company should not be a Director in any other company.  To give effect the company law should be suitably amended.

[e]        The bank defaulters should be prohibited to contest the elections at all levels and appropriate amendments in the “People’s representation Act 1951” should also be made prohibiting them to participate in the election process.

[f]         Any individual holding the position in the Government and he has not paid the bank dues, they should be directed to relinquish the office immediately and simultaneously clear the loans too.

            Officers, who are holding the office of profit should declare their availment of loan in their yearly statement, failing which, the same should be treated as  a  misconduct under the specified rules of the Government.

            Banks shall have the first charge on the immovable property viz. land and building over the other agencies. Then Professionals who are involved in the loan processing [ie] C.A., Lawyers and Certified Valuers are also appropriately to be dealt with.

            Indian Banks’ Association should meticulously publish the caution list bi-monthly for the benefit of member Banks.

[g]        If an individual in any capacity is a loan defaulter, then he should be disentitled to draw any concession / subsidy of any nature, which is also applicable to senior citizens.

[i]         The entire Banking system should have the “Banking Audit Commission” on the lines of “CAG” to make the people responsible to conduct the affairs of the Banks and the report should be placed before the Parliament.

Our Banking system has weathered  away “2008 global meltdown” and Public Sector Banks are nation building instruments hence it is to be promoted, preserved and protected from the use, abuse and misuse by the people at the helm of affairs.

The list of bad loan borrowers of the Banking system is also sent herewith for your ready reference and doing the needful.

Please acknowledge receipt.

Yours faithfully,

  

/S.NAGARAJAN/

/GENERAL SECRETARY/