Letter to H N Sinor IBA Chief

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


Shri. H N Sinor, 3rd May , 2007
Chief Executive,
Indian Banks Association,
Mumbai

Dear Sir,

On seeing your e-mail, I could not resist replying immediately and hence sent to you one mail back without expressing my sentiments. You surpassed all normal Parsi tradition and heritage by going through all the feed back I gave you on the various issues in spite of all constraints. I am now confident that whatever emerges as outcome will be the most befitting thing and will free from flaws. Each one in the industry will be in a position to call you “Sinor the Great”. Trade unions in the industry were divided on the issue of second option on Pension and were drifting away from it even if they included in the charter of demands for quite some time in the past. They were at default in addressing the cardinal issue of the members by keeping themselves non performing on it either at the time they got the “forfeiture of service clause” scrapped from the Pension Regulations or afterwards. It was only after I had issued my circular countrywide on 10th January, 2006 that they became alert on the item and started the campaign. I have no trade union background at all. Things dawned upon me by way of His command only. Every step was quite unintentional and this has sown in me the firm belief that justice and fair play will be restored in all areas where the industry went wrong. I have made it abundantly clear that Pension could be extended to all the present employees just by showing a positive approach to the issue and without the industry feeling a pinch by containing the expenditure within the 1995 level. The key men also need not worry about any increasing costs as no one has infused any capital from their ancestry into the industry to turn its wheels. The issue can be splendidly solved.


In the process of doing things I could make wonderful contributions to the industry too. Most of the public sector banks are now showing fantastic working results in spite of the increase in costs. During the period from April to August2006, I had been sending letters criticizing unscientific and unethical things that took place in the industry to different platforms. All of us know the take over mania that ruled in the banks for the past three to four years during which, forgetting all business ethics, even the government owned banks extended interest concessions and squandered the bank’s money for the cosmetics of the key men. People who stood under the banner of IBA as a group pulled the legs of one another and brought about loss of an alarming proportion to the industry. The life blood of the industry was oozing out and the system was getting debilitated. Benefits went to potential people and to those who indulged in unfair practices. The extent of loss to banking system was and could not be measured. Everything went unchecked. Luminaries in the industry lacked vision and suffered from cataract on account of ambitions and personal motives. Following several letters I sent to the Ministry and to the other forums like RBI, the practice of extending undue interest concessions for attracting business was curbed. Banks are now showing excellent working results netting several Crores of rupees as profits. It does not matter whether my work is acknowledged or not by any one.

The Banking Regulations Act underwent some amendments in August, 2006. I have legitimate reasons to believe that my work, whether acknowledged or not, has played a role in the amendments. I had pointed out the deficiencies in the monitoring function of RBI with reference to New Bank of India that vanished into obscurity in spite of the RBI having a close surveillance by placing its working director on its Board. RBI changed the nomenclature of its director from “Working Director” into “Nominee Director” to save its face in future.



Inadequate provisions for meeting terminal benefits resulted in conversion of establishment expenditure into profits. I had taken up the matter with the ICAI stating that the working results banks published for the past several years failed to reflect a true and fair position of its affairs. . ICAI dealt with the issue in August, 2006 by insisting upon banks to comply with AS -15 norms as per the news flashes in the CNBC TV. Though there is no documentary proof, I have valid reasons to believe that I have a role in these developments and my claim is not a tall or fake one.

While the people inside who were drawing fat compensation for their work indulged in several undesirable things, I have been making significant contributions to the industry that nurtured me, keeping myself out of it and forgoing my emoluments. The mental satisfaction accruing to me is so great and would compensate the trouble and the huge expenditure I incurred out of pocket on the mission. If my work results in procuring the benefit of Pension to the 8 lakhs people who are now devoid of it, it would not be a small thing. The industry too can enrich itself and rejoice if it does justice to all those who contributed to it by extending them second option to all as given to a section of people now. . This is what law abiding people who have self respect ought to do since their own existence and the powers they exercise are derived from some law or other.


Banks so far did things as they pleased and not as per the rules. They framed rules to cover up their mistakes and accountability aspects. This is the case with amendment to regulation No.28 of Pension Regulations. By mistake or arbitrarily, they paid pension that was payable on attaining the age of superannuation to Pension Optees from the ensuing month of Voluntary Retirement without the Pension Regulations having an enabling provision. They amended the Regulation No. 28 with retrospective effect from 01 September, 2000 through publication in the Gazette of 13th July, 2002. But in the process, it has been stated without any ambiguity, that an employee ( without stating “ who has opted for Pension” ) who retired, after rendering minimum service of 15 years, through any scheme formulated by the Bank and approved by the government shall be paid Pension also. The amendment had no relevance to those who were paid Pension already and it prima facie appears that the amendment is made to extend the benefit of pension to those who retired without the Pension Benefit. The payment of superannuation Pension before attaining the age of superannuation to a section of employees who retired through VRS before they attained the age of superannuation without the Pension Regulations containing an enabling clause, non payment of pension to the remaining VRS retirees in spite of the clear and unambiguous amendment stating that pension shall also be paid to those who retired through any scheme formulated by the Board and approved by the government , after rendering a minimum service of 15 years, etc. show that banks arbitrarily make payments outside the rules and they do not make the payments provided under the rules. The notification was given on a 13th of a month a number that is generally considered unlucky or bad. All those who retired remaining in the PF segment became eligible to Pension also from the effective date without refunding the Bank’s PF share of PF received as part of the Scheme of retirement. This can be attributed to the existence of a just God who governs the universe. The miniature gods on earth despised the PF optees by sending them out without Pension benefit in spite of the fact that they had also done work identical to that done by the Pension Optees. But the Supreme God made a provision for them and asked them to take it as a third benefit without refunding any benefits given to them under the scheme of retirement. The Bank itself sent to me the extant Staff Circular in response to the requisition I made to the Ministry of Finance, GOI who transferred my applications under the RTI Act made to them to the Bank. Inflow of fresh vital information, the presence of my erstwhile senior colleague Shri. Sinor at the helm of affairs etc. show that the wind is changing its direction and that He Himself is managing the show to give a better shape to things. As for me, I am just an instrument in His hands and obeying His command.

Whereas the pension Scheme commissioned in 1995 took under its purview all those who retired on or after 01 01 1986 , just for ensuring pension to a trade union leader (What other relevance the date has got?) there is absolutely no point in denying the benefit to any one in service in 1995. and Pension option has to be extended in its original form to all existing employees. Some practical suggestions for reducing future expenditure are the following:

The future recruits can be placed under any new Pension or PF Scheme since there are no privities of contract of any kind with them.
Wage revision can be deferred for a year or two in case of need
The compensation normally payable under exit scheme can notionally be worked out in the case of any employee who goes out without any compensation package and the amount can be shifted to Pension Fund of the bank. This can be done since a good percentage of employees would flee on getting a second option. This will facilitate trimming the size of the banks, a step many a bank is eying upon.


I once again thank you for your mail that conveyed a message to me that you are evincing a keen interest for taking corrigendum measures in the industry.

With warm regards, I remain.

Yours sincerely,




C N Venugopalan