Letter to T S NArayana Swamy, Chairman of IBA

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


Shri. T S Narayana Swamy, 3rd July, 2008
Chairman,
Indian Banks’ Association,
Block No. 2 & 3,
6th Floor, Stadium House,
81-83, V N Road,
Mumbai – 400 020


Respected Sir,

Congratulations!


I am delighted to hear that you have been enthroned as the Chairman of the Indian Banks Association vesting with you good opportunity to make it a meaningful organization that will meet its laudable objectives. Whereas it has lost its relevance as a progressive body, the task of resurrecting its eroded fundamentals is a formidable one. But I am sure your deft hands will find it an easy task to restore it glory by correcting past sins. Being an ex Unionite, it is my pleasure and duty to wish you all success and glory in the new assignment of making IBA a vibrant organisation.

In Union Bank, I succeeded Shri. P G Prasannakumar, Branch Manager at Vandiperyar in Idukki District controlled by Thiruvananthapuram Region you looked after in Kerala. After working in about seven branches as Branch Manager, I retired through "V R S" at the age of 50. Probably, you may not remember my name since I was a silent member in the family.

Past sins of IBA include several things that do not conform to any logical standards. Members of IBA had been quite unethical in business matters. Standing under the common umbrella of IBA, member banks were
pulling the legs of one other and snatching away the business of their own counterparts, using the lethal weapon of "interest rates" debilitating the banking system. Even the public sector banks themselves competed with each other and brought about serious financial loss to banking system in the scenario of deregulated interest rates. Take-over mania swept the banking system during 2004-2006 draining the profits and profitability. The resultant Loss was immeasurable. Reserve Bank of India remained to be Reverse Bank of India with no role in it. The beneficiaries of the foul game were potent people while deserving poor did not get any. Vehement criticisms I leveled against the unhealthy competition aimed at cheap cosmetics of the key men, put an end to take- over mania by August, 2006 and banks started posing excellent working results since the latter half of 2006-2007. About 10 to 20 percent of the interest income of the banks in India can reasonably be attributed to my work done, remaining outside of the banking system

It was ironical that banks that could afford such big loss of a heavy magnitude, banks that can bear the brunt of write-off to defaulters in the name of agricultural debt relief for pleasing the political masters, banks that can spend thousands of crores for changing a logo plead paucity of funds to pay pension to those who toiled for years together to make Banks what they are now. They have been adopting mean methods to avoid the legitimate dues of the work force in the industry. At the same time, the profits banks make, go to pay pension to government servants and to politicians who serve terms of 2 years and above in Parliament or Assembly. Banks chose to feed the neighbor's baby, putting their own babies to starvation. Banks compelled the employees to exercise option for pension, keeping in the
Regulations a clause enabling forfeiture of entire past service for participation in strike. On deletion of the clause on 27th February, 1999, they illegally acted and did not extend a fresh chance of option and moreover kept the amendment in camera by not circulating the amendment and by confining it to gazette publication. The regulations – draft and final- stated that option once exercised is final and irrevocable. Finally, they stated that IBA advised them to extend a chance for revocation of option exercised by an employee for any reason. They revoked the options at the behest of IBA when the Pension Regulations that were formulated in consultation with RBI and carried the previous sanction of the Central Government never had a provision for revocation of the options, which were final and irrevocable in nature. The process of revocation contemplated is illegal and founded on utter foolishness.

IBA has all along been taking double standard in the matter of compensating SBI staff and the rest of the bank employees by signing separate wage pacts for the two categories. In the matter of terminal benefits also, SBI staff have three benefits viz. PF, Gratuity and Pension as against Gratuity and / or PF in other banks. These are acts opposed to principles of equity and equality enshrined in the Constitution of India. Now that you have taken charge as Chairman of IBA, I implore that the illogical things looming large in the scenario may be eradicated to set IBA on a firm footing and to make the organization worthy of its name. As the talks on extending second option on Pension are reaching a final stage, I sincerely desire that you will use your wisdom and with your humane nature set right all anomalies and deliver justice to the entire banking community. I am eagerly watching to see the swift transformation of IBA under your eminent leadership from a bedlam into a responsible organization committed to the welfare of the bank men also while targeting higher goals of uplifting the entire nation.

With all good wishes and best regards, I remain.

Yours sincerely,



C N Venugopalan