Medical Insurance Scheme for Bank Staff

Medical Insurance Scheme for Bank Staff

Now PS  Banks Are Trying to Cheat Retirees, in Violation of Govt of India Guidelines, by Extracting Heavy Premium for Medical Insurance- 
By S Ramachandran 
Letter by Mr S Ramachandran 

S.  Ramachandran                                                                      Kunal Icon, Building no. A8,                               

Former  General Manager Bank of Baroda.                            Flat no. 104, Pimple Saudagar,  

Former Chairman & CEO - The Sangli Bank Ltd.                    Aundh Camp, Pune 411027

(Now merged with ICICI Bank Ltd.)                                          Tel: 020 27201012.

Former Administrator Madhavpura Mercantile                       E-mail id-ramans1938@gmail.com                              

Co-op Bank Ltd (Ahmedabad)                                                                 

Former Director General Maratha Chamber of Commerce            

Industries & Agriculture, Pune.

 

                                                                        By Speed Post/ Mail

 

 To,                                                                                                                                                        

16^th Aug 2015

Shri .Hasmukh Adhia

Chief Secretary, Ministry of Finance,

Government of India, Dept of Financial Services,

3^rd floor, Jeevan Deep Building, Parliament Street,

New Delhi, 110001.

 

Dear Sir,

 

SUB:-URGENT INTERVENTION SOUGHT AS GOVERNMENT GUIDELINE IS  IGNORED AND A FRAUD IS BEING COMMITTED ON THE RETIRES WHILE IMPLEMENTING THE MEDICAL INSURANCE SCHEME FOR RETIREES.

In pursuance of the 10^th Bipartite Settlement / Record Note, Public Sector Bank’s  have started notifying on their web site a Medical Insurance Scheme which covers  both the  existing employees as well as the retirees  based on a Medical Insurance Scheme “negotiated” by Indian Bank’s Association(IBA).

In terms of this Medical Insurance Scheme both retirees and existing employees are required to exercise one time option for joining the Medical Insurance Scheme which provides for Medical cover as under:

 

Sr.NO.	Category of  Employees	Insurance amount	Insurance Premium
1.	Officer’s	Rs.4 lacs	Rs.7,493 /per  year
2.	Clerks	Rs.3 lacs	Rs.5620/-per year
3.	Sub-staff	Rs.3 lacs	Rs.5620/- per year

Bank of Baroda has announced the above scheme on their web site and the existing employees as well as the retirees have been advised to exercise their option by 31^st August, 2015.

 It is rather unfortunate that IBA has formulated this scheme  in spite  ofand disregarding the directives issued by  the Department of Financial Services, Government of India in their letter bearing  no. F. No .14/7/92-IR(VoII) dated 24^th February 2012 addressed to Mr. K. Unnikrishnan, Deputy Chief Executive, Indian Bank’s Association, Mumbai on the issue of STAFF WELFARE FUNDS IN PUBLIC SECTOR BANK’S. This letter has been signed by Mr. Manish Kumar, Under Secretary to the Government of India.

 While enclosing  a copy of the letter, I have to state that the Indian Bank’s Association INTENTIONALLY AND DISHONESTLY DISREGARDED/FLOUTED THE DIRECTIVE OF THE GOVERNMENT IN LETTER AND SPIRIT WITH SCANT RESPECT FOR THE MAJORITY SHARE HOLDER NAMELY THE GOVERNMENT OF INDIA.  HERE IS HOW THEY HAVE FLOUTED THE DIRECTIVE / GUIDELINE:

Para.

 

In the above letter of 24^th February 2012 (Click here to download the letter of GoI ) while accepting the Khandelwal committee recommendation to raise the maximum ceiling limit for staff welfare fund, the Ministry of Finance also stipulated the following conditions:

 

1.      NO CASH PAYMENTS SHALL BE MADE TO EMPLOYEES EXCEPT FOR MEDICAL AND EDUCATIONAL PURPOSES;

 

2.     BANKS MAY CONSIDER THE OPTION OF GROUP INSURANCE POLICIES FOR BOTH SERVING AND RETIRED EMPLOYEES INSTEAD OF DIRECT PAYMENT OF BENEFIT FROM THE FUND.

Each year the Banks may devise a Scheme for apportionment of funds with the prior approval of their Board of Directors, as per specific needs of the Bank.

 

It is requested that IBA may take appropriate steps to inform all concerned Banks accordingly.

 

NOW you will observe from the above that there are two important directive of the government:

 

One is that there should be NO CASH PAYMENTS TO EMPLOYEES; and second when the bank has considered the option of group insurance to both serving and retired employees, THE PAYMENT IS TO BE MADE FROM THE FUND. 

 

IT IS THEREFORE CRYSTAL CLEAR THAT THE CIRCULAR OF THE PUBLIC SECTOR BANKs DEMANDING PAYMENT OF INSURANCE PREMIUM FROM THE RETIREES IS CONTRARY TO THE ABOVE GOVERNMENT GUIDELINE/DIRECTIVE.  THE BANK HAS TO PAY THE INSURANCE PREMIUM IN RESPECT OF RETIREES ALSO OUT OF THE STAFF WELFARE FUND IN THE SAME MANNER IN WHICH THEY ARE PAYING FOR THE EXISTING SERVING EMPLOYEES.  

 

I AM ASTONISHED THAT IBA WHICH HAS RECEIVED THIS GOVERNMENT DIRECTIVE  DIRECTLY IS THE AGENCY WHICH HAS WORKED OUT THE HEALTH INSURANCE SCHEME BY FLOUTING THE ABOVE GOVERNMENT OF INDIA, MINISTRY OF FINANCE DIRECTIVE.THIS IS YET ANOTHER INSTANCE WHERE IBA HAS MIS GUIDED THE BANK IGNORING THE DIRECTIVE OF THE MAJORITY SHARE HOLDER NAMELY THE GOVERNMENT. IBA IN THE LIGHT OF THE ABOVE CIRCULAR OF MINISTRY OF FINANCE SHOULD HAVE CLEARLY AND CATEGORICALLY ADVISED THE PSBS TO FOOT THE BILL TOWARDS INSURANCE PREMIUM IN RESPECT OF RETIREES ALSO FROM THE STAFF WELFARE FUND. INSTEAD THEY HAVE LEFT IT TO THE MERCY OF INDIVIDUAL BANKS.

 

I HAVE ALREDY BROUGHT TO  THE  NOTICE  OF THE READER AS TO HOW IBA HAS BEEN MIS GUIDNG PSBs  WITHOUT ANY ACCOUNTABILITY SUCH AS STEALTHILY REMOVING THE WORD ‘UPDATION FROM THE PENSION SCHEME IN 1995 ALTHOUGH THE SAME WAS PRESENT IN THE EARLIER VERSION” OF 1993. STEALTHILY ADDTING THE WORD “SUPPERANNUATION’ AFTER RETIREMENT WHILE OFFERING SECOND PENSION OPTION TO VRS OPTEES ETC.,

 

Further, the Insurance Premium prescribed under the policy is very high because for a Health Insurance cover of Rs.5 lacs, National Insurance Company is charging Rs.7079/- only which is inclusive of Service Tax.  This is for the individuals who approach for obtaining the policy from the National Insurance Company through Public Sector Banks who are selling third party products. For obtaining the Health Insurance policy for such large number of Employees’ of Public Sector Banks, the premium could be easily lesser  but cannot more for lesser Insurance coverage.

 

Therefore, the officials of IBA including Mr. Unnikrishnan are responsible for:

 1.      Not following the Government of India, Ministry of Finance directive  to obtain  Health Insurance   Policies both for serving and retired employees instead of direct payment of benefit from the fund;

 2.     Apparently negotiating for lesser policy cover for higher premium which is questionable.

 Further, I understand that Bank of India and Bank of Maharashtra have come out the Medical Insurance scheme  with a coverage of Rs.5lacs for officers  but they are not collecting any premium from their officers.  Reports are also pouring in of lesser premium being collected by other Public sector Banks. Thus their appears to be no uniformity followed by Public sector Banks in the matter of providing Health cover to its retirees although other components  of Industry level wage negotiation are  uniformly applied to all the employees of Public Sector Banks.  This has happened mainly because IBA has left it to the mercy of individual Banks to decide on the issue thus creating a separate class of Bank employees within the Bank employees’ category  at the industry level which is against the principle of equity as enshrined by Hon’ble Supreme court of India in a number of judgments.

 

I also understand that there is no audit being conducted by the statutory auditors of the staff welfare fund whose corpus is quite substantial. This against financial accounting. It is therefore necessary for the Government of India, Ministry of Finance to issue directives to the Bank to audit the staff welfare fund account and ensure that the same is actually carried out /complied with.

 

I AM EQUALLY AGHAST AS TO HOW THE LEADER OF BOTH THE OFFICER’S ASSOCIATIONS’ AND THE WORKMEN UNIONS’ HAVE AGREED FOR SUCH A SCHEME WHEN THEY ARE SURELY AND CERTAINLY AWARE OF THE ABOVE CIRCULAR OF THE MINISTRY OF FINANCE DATED 24^TH FEBRUAY 2012   AS WELL AS THE PREMIUM BEING PAID FOR HEALTH INSURANCE COVER SINCE IN MANY BANK’S HEALTH INSURANCE SCHEME IS ALREADY IN EXISTANCE FOR THE RETIREES. THE UNIONS AND ASSOCIATIONS HAVE INFACT REPRODUCED THE CONTENTS OF THE CIRCULAR OF 24^THFEBRUARY 2012 TO THEIR MEMBERS. NOW WHEN THE CRUCIAL ISSUE OF DOLING OUT FROM THE STAFF WELFARE FUND TO RETIREES CROPED UP ON ACCOUNT OF UNIFORM HEALTH INSURANCE SCHEME, THEY HAVE TURNED A BLIND EYE TO THE WHOLE ISSUE BECAUSE IN MANY BANKS’ INCLUDING BANK OF BARODA, CASH PAYMENT IS BEING MADE TO EMPLOYEES INCLUDING OFFICERS AT THE RATE OF Rs.10/- FOR EACH DAY OF ATTENDANCE WHICH IS AGAINST THE ABOVE STIPULATIONS OF THE GOVERNMENT. I AM SURE THAT SIMILAR CASH PAYMENTS MUST BE HAPPENING IN OTHER BANKS ALSO.

 

THE QUID PRO QUO BETWEEN THE IBA AND THE UFBU IS VERY EVIDENT FROM THE ABOVE. BOTH OF THEM HAVE TRIED TO SILENTLY BURRY THE CIRCULAR OF GOVERNMENT ON THE PREMISE THAT NO ONE IN THIS WORLD WOULD EVER THINK OF THIS CIRCULAR BUT MY GUT FEELING MADE ME TO DOWN LOAD IMPORTANT CIRCULAR FROM THE GOVERNMENT WEB SITE. THIS I SUPPOSE HAS COME TO THE RESCUE OF ESPOUSING THE CAUSE OF BANKERS ESPECIALLY RETIREES.

 

In view of the above, I request the Government of India, Ministry of Finance, Department of Financial Services to have the matter thoroughly investigated for:

 1.      Flouting the directive of the Government as stipulated in their letter dated 24^th February, 2012 by Indian Bank’s Association AND other member banks;

 2.     Non transparent manner in which IBA has negotiated the Medical Insurance for lesser policy cover  with  higher premium;

 3.     How PSBs have been allowed to make cash payment to its employees disregarding the stipulations of Government directive as stated in their letter dated 24^th February, 2012.

 4.     How PSBs have been sending compliance report to the Reserve Bank of India certifying compliance of Government of India guidelines / directives.

It is time that Department of Financial Services of Government of India AS A MODEL EMPLOYER

 

A.    SHOULD INTERVENE AND ADVISE PSBs TO UTILISE THE WELFARE FUND TOWARDS INSURANCE PREMIA OF RETIREES ALSO.

B.    Stopping the practice of cash payment to employees except for medical and educational purposes as stipulated in the circular dated 24^thFebruary, 2012.

C.    Initiate action against CMD of Public Sector Banks and General Manager HR of PSBs for disregarding the above Government of India directives of stopping the practice of cash payment to employees except for medical and educational purposes. If they have retired, action should be initiated to stop their pension and also initiate criminal proceedings against them. If they are employed in other PSBs as directors or as Customer Service officers, their services should also be terminated since it is not only disregarding the Government of India directive but also reflects their dishonesty and criminal bent of mind. This would send the much needed signal to others who are amenable to disregard directives of the Government.

 D.   To issue directives to Public Sector Banks to  provide representation to retired Officer’s Association  and retired workman association on the welfare  committee  of Public Sector Banks in order to safe guard their respective interest ,as the serving workman & Officer directors are not taking steps to safeguard the interest of retired employee;

 

E.    EARMARKING PROPORTIONATE AMOUNT FOR RETIRED EMPLOYEES FROM THE WELFARE FUND OF RS 25 CRORES PER YEAR AVAILABLE ON ANNUAL BASIS.

 F.    To order audit of staff welfare fund through the statutory auditors;

       

G.   Should take note of the unprofessional manner in which IBA has been working disregarding the Government of India directives. The advice tendered by IBA has boomeranged on PSBs who have been made to pay with interest in many cases.

 H.  Should take note of the litigatory tendency of IBA in service matters more specifically in respect of retiree which is against the Government National Litigation  policy;

I.      To bring in outside professionals  from private sector since there is a nexus between the officials of IBA and UFBU;

 J.     In order to make IBA accountable and transparent, IBA should be covered under the definition of ‘PUBLIC AUTHORITY’ ; This is because, Public Sector Banks have been funding the IBA towards all its maintenance expenses by several crores. This is nothing but the PUBLIC MONEY and therefore there is a need for transparency and accountability in their dealings : I am furnishing hereunder, the details of the contributions made by PSBs to IBA for its administrative and operational expenses:      

                                                                                                    

                                                                                                                        in  Rs.

Period	State Bank of India	Bank of Baroda	Canara Bank
2004-05	N A	N A	7,00,000.00
2005-06	16,03,011.00	N A	6,00,000.00
2006-07	12,62,336.00	N A	6,00,000.00
2007-08	25,64,276.00	19,29,039.00	6,00,000.00
2008-09	28,24,601.00	13,45,343.00	6,00,000.00
2009-10	21,48,629.00	11,80,280.00	6,00,000.00
2010-11	4,63,16,079.00	1,11,88,662.00	6,00.000.00
2011-12	19,68,176.00	53,62,082.00	6,00,000.00
2012-13	10,02,723.00	27,51,359.00	6,00,000.00
2013-14	37,61,424.00	31,80,963.00	N A
In May 15	37,40,815.00	N A	N A

           (N A – Not Available)

Further, Public Sector Banks being state instruments are not authorized to make payments to an unregistered body such as IBA. Therefore, there is a need to bring IBA under the definition of PUBLIC AUTHORITY.

 WITH KIND REGARDS,

 S.RAMACHANDRAN

FORMER GM BOB AND SOCIAL WORKER