BANK WISE GROSS NPA % PSU VS PRIVATE

PSB NPAs piling up
In fact, 12 banks had gross NPA ratio of above 10%—all 12 are PSBs. Five banks had a ratio of less than 2% and another five between 2-5%—all these are private sector banks.

 
The 11 state-owned banks undergoing prompt corrective actions are focusing on growing their retail book and paring down their corporate loans.

The gross NPAs of state-owned banks continue to pile up. Quarterly results of 14 such banks, including SBI, that have announced their results show these banks contributed nearly Rs 6.16 lakh crore to the total bad loan pile in the quarter ended March 2018. The ratio of gross NPAs to gross advances of state-owned banks increased to 13.41% in March 2018 as compared with 9.94% in March last year.

The gross NPAs of 12 private banks that have announced their results were Rs 1.14 lakh crore, a CARE Ratings report showed. For the 26 private and public sector banks put together, gross NPAs rose to Rs 7.31 lakh crore, or 10.14% of gross advances. It increased by Rs 2.3 lakh crore this year over March last year.

In fact, 12 banks had gross NPA ratio of above 10%—all 12 are PSBs. Five banks had a ratio of less than 2% and another five between 2-5%—all these are private sector banks.

The rest four had a ratio of above 5%, of which two each are private and public sector banks. The total provisions made during the year increased from Rs 43,611 crore to Rs 1,05,150 crore, an increase of 141%.

The 11 state-owned banks undergoing prompt corrective actions are 

Tata Steel buying Bhushan Steel is a Good Start, But a Long Journey Awaits for NPA recovery

One of the themes that we have regularly written on, over the years, is the huge amount of bad loans accumulated by Indian banks, in particular public sector banks.

Looks like there might be some light at the end of the tunnel, which isn't an oncoming train. Tata Steel has bought Bhushan Steel as a part of the proceedings of the Insolvency and Bankruptcy Code, to resolve the bad loans of banks.

Let's look at the features of the deal and how it benefits the banks:

1) Tata Steel has got a 72.65% stake in the company through a wholly-owned subsidiary company, Bamnipal Steel Ltd.

2) As on February 1, 2018, Bhushan Steel owed banks Rs 56,051 crore. Tata Steel will pay Rs 35,200 crore to the banks, as a part of the deal. This means banks will have to take a haircut of Rs 20,851 crore (Rs 56,051 crore minus Rs 35,200 crore) or 37%, on the loans they had given to Bhushan Steel.

3) The banks have also been offered a 12.27% stake in Bhushan Steel. As we write this, the market capitalisation of Bhushan Steel is around Rs 690 crore. The value of a 12.27% stake works out to around Rs 85 crore. Obviously, if the banks were to sell this stake immediately, it wouldn't make much of a difference to their overall haircut. Nevertheless, if they were to hold on to it, in the years to come, they might be able to recover some more of the loans they had given to Bhushan Steel.

4) The financial services secretary Rajiv Kumar tweeted: "Reduction of non-performing assets[BAD LOANS] in individual public sector banks ranges from about Rs 500 crore to over Rs 10,000 crore.

Also, banks would have already written off some portion of these bad loans. Now with the recovery they can write back these loans. Kumar also tweeted to say that public sector banks would earn an income of Rs 7,500 crore from the write backs.

What does this mean? When banks suffer from loan defaults, if the loan is not repaid for a specific period of time, the banks write off the loans. These write-offs are adjusted against the profits/capital of the banks, with the profit/capital of the bank coming down to that extent. With a portion of the loans being recovered, the banks can write back the loans that they had written off. This adds to the income of the bank.

Now let's take a look at how does the deal benefit Tata Steel, which paid Rs 35,200 crore for Bhushan Steel. Given that we do not follow specific companies, we reached out to Sarvajeet Bodas, the steel analyst at Equitymaster, and this is what he had to say, based on information available in annual reports and company websites:

1) Bhushan Steel's Odisha plant is close to the Kalinganagar plant of Tata Steel. The distance between the steel plants is around 150 km. This is expected to generate synergy benefits due to consolidation of its position in the east.

2) Bhushan Steel has an iron ore mine in Sundergarh, Odisha. This will add to Tata Steel's existing captive mines of iron ore at Jharkhand and Odisha and reduce the vulnerability of price movement of iron ore in the market, which is an important input into the making of steel.

3) Also, Bhushan Steel, which is mainly into the production and supply of flat steel products, has been a long-term supplier to OEMs (original equipment manufacturers) in the automobile sector such as Maruti Suzuki, Tata Motors and Honda Cars. This acquisition will complement the focus of Tata Steel on the automobile segment.

4) One of the company's plants is at Khopoli which is near JNPT (Jawaharlal Nehru Port Trust at Nhava Sheva, outside Mumbai). This would enable Tata Steel to capture the export market in Africa, West Asia with minimal logistics cost.

All in all, it seems like a good deal for Tata Steel. But what does it mean for India's public sector banks, is a more important question here. Let's look at it, in detail:

1) Bhushan Steel was the largest among the 12 defaulting companies that the Reserve Bank of India, had identified for immediate resolution. These 12 defaulting companies constituted nearly one-fourth of the overall bad loans of banks. These companies are Bhushan Steel Ltd, Bhushan Power & Steel Ltd, Essar Steel Ltd, Jaypee Infratech Ltd, Lanco Infratech Ltd, Monnet Ispat & Energy Ltd, Jyoti Structures Ltd, Electrosteel Steels Ltd, Amtek Auto Ltd, Era Infra Engineering Ltd, Alok Industries Ltd and ABG Shipyard Ltd.

The total amount of bad loans recovered from these 12 defaulting companies will set the tone for the remaining 75% of the defaulters.

2) The haircut in case of Bhushan Steel was 37%. This basically means that 63% of the outstanding loans were recovered. Of course, the lenders have also got 12.27% equity stake in Bhushan Steel, but that stake as of now is practically not worth anything, in the overall scheme of things.

A rate of recovery of 63% is pretty good in comparison to what banks are able to recover in the general scheme of things. As we have pointed out in the past between April 2014 and December 2017, Rs 29,343 crore of the bad loans that have been written off (Rs 2,72,558 crore) have been recovered by public sector banks.

3) The question can this rate of recovery be maintained? The Press Trust of India has quoted a finance ministry official as saying that from the remaining 11 companies, a total of Rs 1 lakh crore can be recovered.

The 12 companies account for 25% of the overall bad loans of banks. The overall bad loans amount to close to Rs 9,00,000 crore. One-fourth of that works out to Rs 2.25 lakh crore. Of this, Bhushan Steel owed a little more than Rs 56,000 crore to banks. That leaves us with Rs 1.69 lakh crore (Rs 2.25 lakh crore minus Rs 56,000 crore), which still needs to be recovered. The finance ministry expects to recover Rs 1 lakh crore of this. The rate or recovery works out to close to 60%, which is very close to the rate of recovery from Bhushan Steel's loan defaults.

This is an extremely optimistic assumption, given that in more than a few cases, the companies which have defaulted do not have the solid assets like Bhushan Steel did. This means that they will have to be liquidated (i.e. whatever assets are there will have to be sold piece by piece). And liquidation will not lead to the same level of recovery that an outright sale does.

4) The Insolvency and Bankruptcy Code(IBC) has a 270 day deadline for settling disputes which are referred to the National Company Law Tribunal (NCLT). A Business Standard report points out that in 11 out of the 12 cases, the deadline of 270 days has already passed, with no action.

Of course, given that the IBC is work in progress, things will take in time. Having said that, it is important that things are settled quickly, because the moment delays start happening, the hope that the defaulting companies have of getting away with it, soars. Also, given that these 12 cases will set a precedent, it is important that long-delays do not happen.

5) Also, one high profile settlement shouldn't take attention away from the fact that the overall bad loans still remain huge, and haven't settled down as yet.

To conclude, Tata Steel acquiring Bhushan Steel, and helping banks recover a significant portion of their loans, is a good start to a process, which is likely to be long drawn. Also, this again proves that solutions come out only when the market is allowed to works its way through, which never really happens in India.

Hence, it is important that the focus is maintained because it is only when you don't know where you are going, the journey is the reward.

PNB faced another big trouble, further slip rs 15200 cr

Punjab National Bank’s trouble: Wilful defaults by big borrowers slip further to Rs 15,200 crore

State-run Punjab National Bank (PNB) saw wilful defaults by big borrowers slipping further to Rs 15,199.57 crore in April this year over the previous month, soon after suffering a record loss of more than Rs 13,400 crore for January-March due to frauds and bad loans. The bank which posted a record loss of more than Rs 13,400 crore for the last quarter of 2017-18 closed the fiscal with big wilful defaults of Rs 15,171.91 crore, according to the PNB data.

Big wilful defaulters are categorised by PNB as those borrowers with loan outstanding of Rs 25 lakh and over. The country’s second-largest public sector lender is already in troubled waters due to the Rs 14,357 crore fraud allegedly carried out by celebrity jewellery designer Nirav Modi and his associates. Major defaulters in big borrowers category include Kudos Chemie Rs 1,301.82 crore; Kingfisher Airlines Rs 597.44 crore; BBF Industries Rs 100.99 crore; ICSA (India) Ltd Rs 134.76 crore; Arvind Remedies Rs 158.16 crore and Indu Projects Ltd Rs 102.83 crore. Jas Infrastructure and Power Limited Rs 410.96 crore; VMC Systems Ltd Rs 296.08 crore; ICSA Pvt Ltd Rs 266.17 crore also figured in the list. These borrowers were part of the consortium lending by PNB.

Those among key borrowers who borrowed money solely from the bank included Winsome Diamonds and Jewellery Ltd Rs 899.70 crore; Zoom Developers Rs 410.18 crore; Forever Precious Jewellery & Diamonds Ltd Rs 747.98 crore. Of the others are Surya Vinayak Industries Rs 133.96 crore; Nafed Rs 224.24 crore; and Mahuaa Media Rs 104.86 crore. The scam-hit bank earlier last week posted a standalone net loss of Rs 13,416.91 crore for the January-March period of 2017-18, the biggest ever by any domestic lender, as bad loans surged.

As a result, provisions for the bad loans jumped four-fold to Rs 16,202.82 crore for the quarter under review compared to Rs 4,910.39 crore parked aside in the same period a year ago. For the full fiscal 2017-18, the bank posted a standalone loss of Rs 12,282.82 crore against a profit of Rs 1,324.80 crore in 2016-17. Bank’s asset quality has witnessed sharp deterioration as gross net performing assets (NPAs) or bad loans, hit 18.38 percent of gross advances at the end of March this year, as against 12.53 percent a year ago. Net NPAs were also soared to 11.24 percent against 7.81 percent year ago. In absolute term, the gross NPA of the bank surged to Rs 86,620 crore in the fourth quarter as compared to Rs 55,370 crore in the same quarter a year ago. Similarly, the net NPA also rose to Rs 48,684.29 crore from Rs 32,702 crore at the end of March 2017.

conciliation meeting UFBU and CLC(C) regarding two days bank strike will be held on 28.05.2018

Centre promises to help public sector banks come out of PCA framework

The Finance Minister, Piyush Goyal, on Thursday expressed confidence that the 11 public sector banks (PSBs) that are under RBI’s Prompt Corrective Action (PCA) framework would be able to overcome their “legacy issues” in a very short period of time.

“The Centre would over the next few days ensure that every possible support is given to strengthen the resolve of these banks to come out of the PCA framework as quickly as possible,” Goyal told reporters after a meeting with the heads of 11 PSBs who are under RBI’s PCA framework.

These 11 banks will be able to continue to serve the common man through more aggressive banking, maintaining the highest standards of ethics and integrity, Goyal said.

The 11 banks under PCA are Dena Bank, Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce and Bank of Maharashtra.

PCA is the process or mechanism to ensure that banks don’t go bust. Under the process, RBI has put in place some trigger points to assess, monitor, control and take corrective actions on banks which are weak and troubled.

Why union demand Wage Revision upto Scale VII instead of scale III? and What will happen if the WR is restricted to Scale III in Bipartite?

ALL INDIA BANK OFFICERS’ CONFEDERATION

Circular No. 2018/22 Date: 13.05.2018

To All Affiliates/State Units/ Members

Dear Comrades,

An appeal to our Young and Senior Comrades – Strike on 30th & 31st
May 2018.

You were the back bone of the organization and built up the strong edifice
and you continue to be the pillar.
The Govt and Management will try their age old game of divide and rule. I am sure you will understand and act.

Q. Why we demand Wage Revision upto Scale VII ?

The 7 Scales were the outcome of the Pillai Committee Recommendations. 
After the PCR we have all along had Wage Negotiations upto Scale VII. Even in the last Wage Negotiation IBA insisted on restricting negotiations upto Scale III. Some Managements also gave restricted mandate. But we turned it down and achieved our target. We also got an additional 
increment for Scale IV. Though we tried the same for Scale V also we could 
not achieve the same. But we had been ensuring decent wage hike for all.

Q:What will happen if the WR is restricted to Scale III in Bipartite? 
The individual Managements will have the freedom to decide. Uniformity will be lost. Relativity will be given a go by. Performance will be made criteria but performance mark will be decided by the Boss. Unless you please the boss you will not get better pay or promotion. You will be left to the mercy of the Management. Discrimination will increase. Humans are 
not perfect. Performance depends on the environment. Already in some banks this is happening and the resentment is increasing day by day. Hence this will only lead to divide and rule and later the officers will be left to the mercy of the Management. 
Today the Associations are the watch dogs which Protest & Protect. 
A rich man had 2 dogs which were guarding the house watchfully in the 
night. One day a friend told him that he is wasting so much of money to 
feed the dogs. So the rich man gave away the dogs. Sold for a price. 
Within a week robbers came. They looted all his money and jewels. Now 
the rich man cried. Regretted that he did not realize the role of the watch dogs. 
Same will be our position. When the role of the Association is taken away 
the Management atleast most of them will bounce on you. Step by step , 
stage by stage. By the time you will realize, you will be at great loss. 

Q. What are the arguments of AIBOC for continuing these scales?

1. The Pillai Committee Recommendations and the acceptance of the
same by Govt & Banks.
2. Officers Service Rules are same upto Scale VII and they can’t be
tampered with as salary structure is part of the OSR.
3. It is the Association which defends these officers in case of a charge sheet.
4. Managements want us to demand that Officers upto Scale VII should
be outside the purview of CVC and CBI. The same should be the case
for Wage Negotiation.
5. If not us who will negotiate for them?
6. Officers are recruited under IBPS. They should have same service
conditions. Leaving it to individual managements will create
disparity.
7. Many Officers upto Scale VII are members of the Association. They
have to be given Wage Revision on the same formula.
8. No Management will give a better salary if there is no negotiating
body.
9. If the Managements want to give more really, they can provide the
amenities apart from salary which will be tax free too.
10. No Govt- No Management is benevolent. Without an
Association they will become oligarchy. They will discriminate on
Caste, Creed, Religion, Language; everything will come to play.

Q. Why Can’t you prevent the Management from giving individual
letters?
Managements can’t support the strike. It is mandatory to issue
letters asking not to join the strike. But no Management can take
action against an individual for a collective action. The Trade Union Act protects us. Hence you need not worry.
Q: Managements can transfer?
Transfers take place as per transfer policies and when you go up in the ladder it is mandatory. Can a Management transfer everybody who participates in the strike?
Q. Can I participate in the Strike when I am under probation?
Yes. We all have participated during probation. Probation can’t be extended for that. All under probation should join the strike.

Comrades,
We appeal to you. It’s a question of life and death. We have to stand
united as we have done all along. Take the plunge.
Join the strike.
Ensure a brighter future.

Comradely yours,

(D.T.FRANCO)
GENERAL SECRETARY

IDBI unions to go on four-day dharna from tomorrow

Officers and employees of IDBI Bank will revive an agitation programme under the banner of United Forum of IDBI Officers and Employees to protest the ‘unreasonable delay’ in the settlement of long-pending issue of wage revision.

Following a ‘black day’ on May 10, office-bearers of the constituent unions of the United Forum have proposed to stage a four-day dharna from Wednesday to Saturday in front of the IDBI Tower premises at the Corporate Office, Mumbai.

Participation of general members in the dharna is voluntary. Officer members have already proceeded on a work to rule from May 10, union leaders said.

They have been directed to strictly follow office timings and withdraw from extra efforts being put in for life insurance, general insurance and mutual fund businesses.

Further course of action, including sustained strike action, would decided upon by the United Forum during the course of the dharna programme.

Wage revision in IDBI Bank, a government-owned bank, is due from November 1, 2012. Employees and officers are not party to the industry level wage settlement between Indian Banks’ Association and United Forum of Bank Unions.

Twitter campaign

Repeated attempts mounted by All India IDBI Officers Association (AIIDBIOA) and All India IDB Employees Association (AIIDBEA) since July 2016 have proved futile.

Hence, the decision to resume the agitational path, said Ratnakar Wankhade, General Secretary, AIIDBEA, and Vithal Koteswara Rao, General Secretary, AIIDBIOA, both joint convenors of the United Forum.

The union leaders received good response from members to the request to observe the ‘black day.’ The agitation programme is being tweeted under two hastags, #WageRevisionIDBI2012 and #RecoverCorporateNPAs.

The wage revision continues to remain unresolved despite AIIDBIOA and AIIDBEA having given ‘sufficient time’ to the bank management to settle it amicably.

Two independent directors, Ninad Karpe and S Ravi, have resigned from the board of state-owned IDBI Bank days after CBI filed FIR

Two independent directors, Ninad Karpe and S Ravi, have resigned from the board of state-owned IDBI Bank days after CBI filed FIR in connection with Rs 6 billion loan given by the bank to former Aircel promoter C Sivasankaran, his son and companies controlled by him.

Karpe and Ravi cease to be independent directors of IDBI Bank with effect from May 11 and May 12 respectively, an official said.

These directors had informed the board, which took note of their resignations yesterday

The CBI's FIR had also named many officials including some of the independent directors including these two.

The case pertains to loans of Rs 3.22 billion and Rs 5.23 billion given to the companies of Sivasankaran, who was at the centre of Aircel Maxis probe for alleging that the then telecom minister Dayanidhi Maran had put pressure on him to sell his company to a Malaysian telecom tycoon, a case in which Maran brothers have been discharged by a special court.

The loans later turned non-performing assets or NPAs.

The loan of Rs 3.22 billion was allegedly issued to Finland-based Win Wind Oy (WWO) by IDBI Bank in October 2010 which turned NPA three years later, the CBI has said in its FIR.

CBI has named 15 bank officials who worked at senior levels at IDBI Bank in 2010 and 2014 when loans were sanctioned to the companies controlled by Sivasankaran in its FIR registered on a complaint from the Central Vigilance Commission, they said.

Managing Director and CEO of Indian Bank Kishor Kharat (who was then MD and CEO of IDBI Bank) and his counterpart in Syndicate Bank Melwyn Rego (then Deputy Managing Director in IDBI Bank), along with then Chairman-cum-Managing Director of IDBI Bank M S Raghavan have been named in the FIR.

PNB Reported net loss 13416.91 cr with net NPA 11.24%

Punjab National Bank has reported a net loss of Rs 13,416.91 crore for the fourth quarter ending March 2018.
The profit was dragged by spike in provisions by three times towards bad loans, which was taken upfront during the quarter.

For the full year ending March 2018, PNB’s net loss stood at Rs 12,130 crore as against a net profit of Rs 1187 crore in FY17.

Gross non-performing assets (GNPAs) worsened substantially to 18.38 percent as on March-end 2018 as compared to 12.11 percent in December 2017 and 12.5 percent as on March-end 2017.
Net NPA ratio also deteriorated to 11.24 percent from 7.55 percent in the previous quarter and 7.81 percent in the year-ago period.
In absolute terms, gross NPAs jumped significantly to Rs 86,620 crore, up from Rs 57,519 crore in the December quarter.
Net NPAs were at Rs 48,684 crore as on March end 2018, up from Rs 34,075 crore in December.

Next Bipartite Talk on 16.05.2018 with IBA

DENA Bank under PCA by RBI . If the bank does not show improvement then it could be either be merged or taken over by other bank.

The Reserve Bank of India (RBI) has initiated prompt corrective action against Dena Bank in view of high non-performing assets (NPAs), restricting the bank from giving new loans and new hiring.

The public sector bank had on Friday reported widening of its net loss to Rs1,225.42 crore in the March quarter on mounting bad loans and higher provisions to cover them. The net loss stood at Rs575.26 crore in the January-March quarter of 2016-17. Sequentially, the loss widened from Rs380.07 crore in December quarter of 2017-18.

“Reserve Bank of India, vide their letter dated May 31, 2017, has initiated Prompt Corrective Action for Dena Bank and imposed certain restrictions, in view of high Net NPA and negative RoA ( return on assets),” the bank said in a regulatory filing. In continuation to the above, “we wish to inform that the RBI vide their letter dated May 07, 2018 (received by the Bank on May 08, 2018) has restricted the Bank from assuming fresh credit exposure and recruitment of staff,” the central bank added.

Dena Bank said it was put up to the board in its meeting held on 11 May 2018. Bank’s asset quality has worsened with the gross NPAs hitting a high of 22.4% of the gross advances as on 31 March 2018, from 16.27% as of end-March 2017. In value terms, the gross NPAs, or bad loans, rose to Rs16,361.44 crore from Rs12,618.73 crore.

Net NPAs were also up at 11.95% (Rs7,838.78 crore) from 10.66% (Rs7,735.12 crore)

In January, Allahabad Bank had informed about being placed under RBI’s PCA mechanism. The central bank has initiated similar action against other public sector banks, including IDBI Bank Ltd, Indian Overseas Bank and UCO Bank before this.

The banking regulator had in April 2017 issued a new set of enabling provisions under the revised PCA framework with a clause that if the bank does not show improvement then it could be either be merged or taken over by other bank.

ALL INDIAN BANK STRIKE ON 30TH AND 31ST MAY 2018 , PARTICIPATE 10 LAKH BANK EMPLOYEE FROM ALL OVER INDIA

Employees of public sector banks have threatened to go on two-day nation-wide strike from May 30 against “a meagre” 2 per cent hike offered by the management body, Indian Banks’ Association (IBA).

During the negotiations held on May 5, IBA made two unacceptable propositions including an offer of 2 per cent hike in the wage bill cost as on March 31, 2017, United Forum of Bank Unions (UFBU) said in a statement.

Besides, it adamantly maintained that the negotiations on officers demands would be restricted up to Scale III only, AIBEA General Secretary CH Vekatachalam told PTI.

In the last wage revision, IBA provided an increment of 15 per cent.

UFBU is an umbrella body of nine unions, including All India Bank Officers’ Confederation (AIBOC), All India Bank Employees Association (AIBEA) and National Organisation of Bank Workers (NOBW).

AIBOC joint general secretary Ravinder Gupta also questioned the rationale of this meagre hike at a time when inflation is uncontrolled.

“When prices go up unabated, can wages be depressed. Is it fair to deny reasonable wage increase?” Gupta asked.

NOBW Vice-President Ashwani Rana said unions also demanded that all scales or grades of officers should be included in the wage revision as has been the practice since 1979.

Unions also demanded that as advised by the government, the IBA should complete the process without further delay, Rana said.

Vekatachalam said the government is also aware that despite their repeated letters, there is no progress in the negotiations and no offer was made to the Unions till the meeting held on May 5, 2018.

This shows that the government is also not serious about early wage settlement in the banks, he said.

“It is unfortunate that when the government wants and expects bank employees and officers to extend all co-operation to implement all the schemes of the government through the banks, when it comes to the legitimate demands for a reasonable and fair increase in wages, the government is not paying serious attention,” he said.

Canara bank loss Rs 4860 cr ALB reported a net loss of Rs. 3,510 cr and UCO Bank a Rs. 2,134 crore loss.Total loss of public sector bank in Q4 Rs 11729 cr

  

Four Indian state banks reported on Friday a combined net loss of R
s.11,729 crore ($1.74 billion) for the fiscal fourth quarter due to a jump in bad-loan provisions following a tightening of central bank rules.

Bengaluru-headquartered Canara Bank Ltd, the biggest of the four, said its net loss was Rs.4,860 crore for the three months to March 31, compared with a net profit of Rs. 214 crore a year earlier.

Allahabad Bank reported a net loss of Rs. 3,510 crore and UCO Bank a Rs. 2,134 crore loss. Dena Bank, the smallest of the four, made a net loss of Rs. 1,225 crore.

Indian banks, already burdened by a near-record Rs. 9.5 lakh crore of soured loans as of last year, were expected to report a further rise in bad loans in the March quarter after the central bank withdrew half a dozen loan-restructuring schemes and tightened some rules in February.

New Delhi owns majority stakes in 21 lenders that account for the bulk of the sector's bad loans, forcing the government to announce a $32 billion bailout package to help the lenders set aside funds for the soured loans and kickstart new lending.

Canara Bank's gross non-performing loans as a percentage of total loans rose to 11.84 per cent at the end of March, compared with 10.38 per cent in the preceding quarter and 9.63 per cent a year earlier. Provisions for non-performing assets almost tripled from a year earlier to Rs. 8,763 crore.

Allahabad, UCO and Dena also saw their bad loans and provisions for bad loans rise sharply in the quarter.

Union Bank of India, also state-run, reported on Thursday a Rs. 2,583 crore net loss for the fourth quarter.

2COMMENTS

Top state lenders State Bank of India, Punjab National Bank, Bank of Baroda and Bank of India are due to report fourth quarter results in the coming days

10 lakh bank employees to go on two-day strike ; UFBU rejects 2% hike

In view of failure of talks held between United Forum of Bank Unions (UFBU) and Indian Banks' Association (IBA) on the wage revision at Mumbai on Saturday, about 10 lakh bank employees will go on a continuous two-day strike by end of this month.

UFBU, which consists of all the 9 bank unions (AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW, NOBO) took part in the talks.

The strike call is given against the meagre offer of wage increase for Bank Employees.

All India Bank Employees' Association (AIBEA) General Secretary Ch Venkatachalam told UNI that Bank employees and officers’ wage revision is due from November, 1 2017. The Finance Ministry had advised Bank managements and IBA to complete the discussions well in advance and release the revised wages w.e.f. 1-11-2017.

Even though the discussions between Indian Banks’ Association and Bank Unions started in May, 2017 and several rounds of discussions have taken place, IBA was not coming forward to make any offer of wage revision. Hence Unions gave the call for strike on March 15, 2018. Since IBA offered to re-commence the talks, the strike was deferred.

In this background another round of discussions between IBA and Bank Unions took place at Mumbai on Saturday, he said.

Mr Venkatachalam said during the discussions, the IBA offered an increase of 2 per cent over the total wage bill of the Banks as on 31-3-2017. Under the last 10th Bipartite Wage Settlement that was made effective from 1-11-2012, IBA had agreed for a hike of 15 per cent increase over the total wage Bill.

Hence the Unions felt that this offer of IBA was too meager and did not make any basis for further negotiations. In view of this, the Unions outrightly rejected this meager offer of two per cent hike, the top Union leader said.

He said it is regrettable that while the Government has been asking the IBA to conclude the wage revision settlement before 1-11-2017, the IBA has been delaying the same and the present meager offer shows that IBA is not serious and they do not want any meaningful negotiations or to conclude the wage settlement early.

In view of this, it has been decided to take up the issue with Union Finance Ministry immediately for their intervention.

The Unions has given a call to organise massive demonstrations by bank employees all over the country on May 9, 2018, Mr Venkatachalam said, adding that If the Finance Ministry fail to intervene to advice the IBA to make their improved offer, it has been decided to call for a 48 hours continuous strike by end of this month.

It is a matter of shame that while thousands of crores of rupees are written off from the profits towards bad loans of big corporate companies, the genuine demands of bank employees are being denied in this fashion, the AIBEA General Secretary said.

Bank Unions are toothless and can only bark and not take action

Why IBA dared to make mockery of Bankers?

IBA has realised that Union Leaders and Bank Unions are toothless and can only bark and not take action. They can at best go for one or two days strike, which can result in loss to customers but will save hundreds of crores of rupees to banks in the shape of deductions in salaries.

Union leaders have sold their soul and are ready to bend backward to any extent to keep their bosses happy so that they allow their fiefdom to continue. They issue circulars after month / two months just to keep their cadre engaged.

Clubbing of issues like Stopping of Banking Reforms alongwith Wage Revision has sent a message to IBA and GoI that unions are least bothered for wage revision and more interested in stopping bank reforms to save their respective territories.

GoI feels that paying reasonable salaries to bankers will lead them empowered to raise their voices on other matters like corruption, NPA etc. and thus pay them low so that poor talent is attracted to banks and they can enjoy the fruits of public money. This is on similar premises wherein politicians love to keep large population below poverty line so that they keep on struggling for day to day requirements and find no time to raise voice against the corrupt political class.

The future does not seem to be rosy for bankers, as in the given circumstances, it is unlikely that bankers can expect increase of over 12% or so inspite of strikes for few days. There is a need for drastic steps (even beyond indefinite strike) - may be throwing of the old unions.

IMMEDIATE  SETTLEMENT OF 
XIth BIPARTITE  to BANK EMPLOYEES“ WE DEMAND

waiting for INDEFINITE STRIKE only

The Genuine demands of  Bank Employees are denied while 1000s of crore of Rs of BAD LOANS of CORPORATES were WRITTEN OFF

Growth in bank deposits falls to five-decade low

Bank deposit growth fell to a five-decade low in fiscal year ended March 2018 as the demonetisation bonanza withered away and the lure of other savings instruments such as mutual funds and insurance eroded banking competitiveness. 

Data from the Reserve Bank of India (RBI) website shows aggregate deposits in the banking system grew a mere 6.7% in 2017-18, the lowest since fiscal 1963. Bankers say the reversal from the huge deposits collected in light of the November 2016 demonetisation demonetisation together with the steady movement of savings away from bank deposits has hit growth. 

“Deposits soared after demonetisation, which is why growth last year was higher. But most of that money has gone out of the banking system last fiscal and that is reflecting in the slower deposit growth numbers,” said PK Gupta, managing director, retail and digital banking, SBI. 

During November-December 2016, banks received Rs 15.28 lakh crore as people deposited highdenomination currency notes that were withdrawn from circulation. As a result, aggregate deposits in the fiscal ended March 2017 grew 15.8% to Rs 108 lakh crore. 

This pace of growth has now come down by 6.7% with deposits aggregating Rs 114 lakh crore. Savings have also moved to other asset classes from bank deposits. 

 

11th Bipartite negotiation on 5th May-Latest update

 Bipartite_updates.....

The approach of the IBA in the1 1th Bipartite negotiation on 5th May had very seriously damaged the pride of bank employees. Such approach of IBA is arising out of goverement's direction and it's attitude towards bank employees. The IBA's shameless offer of 2% increase in Payslip components is nothing but adding salt to the wounds. The goverement that was issuing direction after direction through its DFS finance ministry to Banks to conclude the Bipartite settlement before it's expiry is now silent over the IBA's ridiculing offer. This would not have been possible from IBA without the blessings of the government. So for the Bank employees who worked for the nation by implementing the demontisation excercise, covered so many people under Goverement's Bhima schemes, opened accounts to make Jan dhan Yojana successful gave mudra loans to promote self-employment scheme of the government, worked and collected taxes on Sundays and holidays and issued Aadhaar card and ceeding the same this treatment of IBA and government is nothing but an insult to the Bankmen of the country. The time has come to teach all those including the goverement to show and get what we rightfully deserve. So prepare and March on to 2 days strike of UFBU in the month end. Hold meeting at all levels and explain the situation to the employees to prepare for massive strike action. Let us show those as to what we are made of. Our determination, courage, conviction and unity will make our struggle more successful. Move on to revolutionary strike and make it a thundering one.

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SATURDAY, 5 th May, 2018
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XI th BIPARTITE STTLEMENT TALKS

Today at IBA office at Churchgate talks regarding XI th Bipartite Settlement were held between IBA Negotiation Team and BKSM.

On behalf of IBA following Officials were present :
1. Mr. R. K.Thakkar, IBA Chairman & Chairman UCO Bank.
2. Mr. Jayakumar, Chairman BOB
3. Mr. Rajkiran Rai, Chairman Union Bank
4. Mr. Kannan, CEO of IBA.
and other executives.

Details of discussion :
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1. About 'Medical Insurance Scheme', various options were discussed at length. Discussion remained inconclusive. It was decided to have separate meeting on this issue.
2. Discussion on Variable Pay remained inconclusive. We opposed the notion of Variable Pay.
3. IBA made it clear that talks will be held for upto Officer Scale III. Because of fractured mandate received from Banks.
4. Initial Offer for Salary Revision :
IBA said,"Due to deteriorating financial condition of Banks revealed by recent quarterly results and also disappointing results are expected for forthcoming quarters." IBA made initial offer of 2 % hike in Pay Slip.
UFBU protested and refused the paltry offer. IBA asked about our expectations. We told them to go by 'Charter of Demands' , which states our expectations. We asked IBA to stop wasting time by making such offer which is mockery.

There was no conclusion on any issue.

Let us hope for better during next round.

Thanking you,