DA INCREASE FROM MAY 2020 is 2 SLAB i.e 0.20% FOR BANK EMPLOYEE

On 30.04.2020, Consumer Price Index (CPI) data for the month of Mar'20 announced and there is decrease of two points in CPI Index declared for this month. On the basis of CPI data announced by the Govt for the months Jan'20 to Mar'20 (as tabled below) the percentage of increase in DA is 0.20% (2 slabs) and total revised DA slabs is 761 and total percentage of DA payable is 76.10% for the period May 20 to Jul 20

Jan 2020	7532.55
Feb 2020	7486.89
Mar 2020	7441.24
Average CPI
For the Quarter Jan - Mar 2020 as above = 7486.89
For the Last Quarter Oct - Dec 2019 as above = 7479.29

BANKING DECLARED AS PUBLIC UTILITY SERVICE FOR NEXT SIX MONTHS

BANKING DECLARED AS PUBLIC UTILITY SERVICE FOR NEXT SIX MONTHS

Dated 26.04.2020 : As per notification dated 17.04.2020 of Ministry of Labour and employment , Government of India , the banking services would be considered public utility service for a period of six months for the purpose of Industrial Disputes Act ( 1947 ) effective from 21.04.2020 .

With this notification , Government of India has prohibited bank employees and officers from going on strike for next six months .

DA is not paid at the will of Govt , it is a compensation for price rise

NO DA HIKE FOR CENTRAL GOVT EMPLOYEE AND PENSIONER TILL JULY 2021

As government's finances come under pressure during the Covid-19 pandemic and lockdown, the finance ministry today announced that it has put on hold a hike in dearness allowance (DA) for central government employees and dearness relief (DR) for central government pensioners till July next year.

"In view of the crisis arising out of Covid-19, it has been decided that the additional installment of dearness allowance (DA) payable to central government employees and dearness relief (DR) to central government pensioners, due from 1st January, 2020 shall not be paid. Additional installments of DA & DR from 1 July 2020 & 1 Jan 2021 shall also not be paid," the Ministry of Finance said in a memo.

However, dearness allowance and dearness relief at current rates will continue to be paid, it said.

As and when the decision to release the future installment of DA and DR due from July 2021 is taken by the government, the rates will be restored prospectively and will be subsumed in the cumulative revised rate effective 1st July 2021. The government will not pay any arrears for the period in between 1st January 2020 and 30th June 2021.

The Union Cabinet had last month hiked the DA and DR by 4%, from 17% of basic pay/pension to 21% of basic pay/pension for central government employees and pensioners.

There are at least 50 lakh government employees and 65 lakh pensioners. The DA and DR hike would have cost the exchequer ₹37,530 crore in the current financial year and 2021-22.

The finance ministry had recently clarified that it is not making any cuts in central government pensions as salaries and pensions will not be affected by government cash management instructions.

OYO cuts pay of all employees in India by 25% for 4 months

 Softbank Group-backed OYO Hotels and Homes has cut the salaries of all employees by 25% for four months starting April and also sent some of its people on leave with limited benefits, according to an internal memo seen by Reuters.

The move comes soon after OYO furloughed thousands of its international employees earlier in April after the coronavirus outbreak brought global travel to a halt, wreaking havoc in the hospitality sector.

"Our company is taking a difficult but necessary step for India, whereby we are asking all OYOprenuers to accept a reduction in their fixed compensation by 25%," the company's Chief Executive Rohit Kapoor said in a note on Wednesday,

Some employees will also be placed on leave with limited benefits from May 4 and until August, Kapoor said.

No penal interest on farm loan dues in moratorium; RBI extends interest subvention benefit to farmers

In an extension to the earlier relief related to term loans moratorium, RBI has today announced that the farmers will not be charged penal interest on their crop loans till the end of May. Earlier, the RBI had given moratorium for three months on payment of installments falling due between March 1 and May 31, 2020, however, interest was accrued on the non-payment of dues. Now, with the latest announcement, RBI said that the farmers do not have to pay penal interest and at the same time they will continue getting the benefits of the interest subvention scheme. 

It said that the government has decided to continue the availability of 2 per cent interest subvention and 3 per cent prompt repayment incentive for an extended period of repayment up to 31 May, or date of repayment, whichever is earlier. The decision has been taken as many farmers are not able to travel to bank branches for payment of their short term crop loan dues due to nationwide lockdown and resultant restrictions imposed on the movement of people.

Accordingly, banks are also advised to extend the benefit of interest subvention of 2 per cent and prompt repayment incentive of 3 per cent for short term crop loans up to Rs 3 lakh to farmers whose accounts have become due or it will
become due between March 1 and May 31, 2020.  Meanwhile, all the other terms and conditions will remain the same. RBI’s announcement has brought a big relief to the farmers who were concerned about the increasing interest on their loans, despite the three-month moratorium announced earlier for deferring installments of EMI.

Bankers: The forgotten heroes of Covid-19 battle

The threat of corona is not going to end soon.

Just got this message from one of Dr. Friend from Ganga Ram Hospital *please read carefully*

_*Some important points..*_

_*1.* Postpone travel abroad for 2 years.._
_*2.* Do not eat outside food for 1 year.._
_*3.* Do not go to unnecessary marriage or other similar ceremony.._
_*4.* Do not take unnecessary trips.._
_*5.* Do not go to a crowded place for at least 1 year.._
_*6.* Completely follow social distancing.._
_*7.* Stay away from a person who has  cough.._
_*8.* Keep the mask on.._
_*9.* Be very careful in the current one week.._
_*10.* Do not let the mess around you.._
_*11.* Prefer vegetarian food.._
_*12.* Do not go to the cinema, mall, crowded market for 6 months now.  If possible, park, party, etc. should also be avoided.._
_*13.* Increase immunity.._
_*14.* be very carefull while at Barber shop or at beauty parlor.._
_*15.* Avoid unnecessary meetings, keep in mind social distancing.._
_*16.* The threat of corona is not going to end soon.._

_*Thank You..*_

Webinar by IMF, Chaired by Raghuram Rajan, this morning. Key takeaways are as follows:*

*Webinar by IMF, Chaired by Raghuram Rajan,  this morning. Key takeaways are as follows:*

 *General Outlook*
1. India seems to have supressed the curve so far. It looks like it might escape the worst of the pandemic, but will have to be cautious about it.
2. Possibility of W Curve – i.e. There is a good chance of re-occurrence of the virus, which could see a possibility of regular lockdowns. Businesses need to plan accordingly.
3. Capital will look for countries that are less battered. Western economies are badly battered while countries like India, Indonesia, etc are not so battered. Global Capital could flow into India, if we can act efficiently to pull it.
4. Emotional and Economic backlash against China is expected. Already, countries and companies are working on strategy to pivot away from China as part of their supply chains. Japan Govt has announced packages for it’s companies bringing back manufacturing home. Businesses need to keep this in mind and work accordingly.

*Discretionary Spending.*
1. For individuals, health and safety will become No.1 on their agenda from the 3rd of 4th place. There will be more spending on this area and reduction in other discretionary spends.
2. The ticket size of spending will drop for a while. People will spend on cheaper goods than on expensive goods, or delay spending for a while.
3. Extreme acceleration in digital economy. I.e. Home education, home entertainment, home fitness, etc
4. Loyalty shock. People will be less loyal towards brands as other aspects will take over. People will switch brands faster due to various other concerns like safety, etc.
5. General Trust deficit. There will be trust deficit amongst stakeholders like vendors, customers, employees, borrowers, banks, etc. Banks will have trust deficit with borrowers, companies will have trust deficit with suppliers, etc.

*Liquidity and P&L*
1. Segregate Good Costs and Bad Costs
a. Good costs (Eg. Digitization, tech costs, digital marketing, best employees, etc) need to be insulated and protected
b. Bad Costs (Eg. Fancy office, unnecessary spending, bad performers, traditional working methods) need to be ruthlessly eliminated. Don’t be emotional about non-core businesses. Concentrate on core business.
2. Be Frugal – Not necessary to have fancy office, fancy cars, excess employee strength, etc. Remove all the flab and be lean.
3. Maintain Good behaviour – have frank and open conversation with all stakeholders like suppliers, employees, etc and try to find the middle ground, so that the burden can be shared justly.
4. Be Future Ready – In this crisis, there will be winners and there will be losers. Those who re-orient their strategy will be winners.


*Govt Stimulus.*
1. Economy was in poor shape even before Covid. The govt has little leeway to provide large stimulus.
2. Govt earns about $60-70 billion a week from taxes. Imagine what a hit a 5-week lockdown will have. Size of Indian economy is about $3 Trillion. In some scenarios, it is predicted that Govt could take a hit of nearly $1 Trillion.
3. Inequality has already sharpened. The gap between rich and poor has further increased. Govt needs to concentrate on mass health and mass welfare. If not, 200 million people could sink into poverty.
4. Govt must explore printing currency (Quantitative easing), but there are limitations here. It has side effects like inflation, etc. Rich countries have more leeway for such quantitative easing.
5. Govt must concentrate on grabbing more capital from outside and do reforms to enable that.

*Result of backlash against China*
1. Internationally, there could be an emotional and economic backlash against China.
2. Businesses with supply chains passing through China will need to keep this in mind and insulate themselves and build alternatives.
3. India and Indian businesses need to try to become the contract manufacturer of the world, just like China is. India needs to make use of this opportunity smartly.
4. All big wealth funds and soverign funds will be awash with Liquidity. This liquidity needs to be attracted to India.
5. In every sector, there are good and bad companies. Management has to invest correctly in manufacturing and modern tech, be honest and fair to all stakeholders, etc., Those companies with good management and displaying good behaviour will come out victorious.

*Export Business*
1. Indian exporters need to build trust. They need live up to promises made. They need to deliver on time and deliver the promised quality. They shouldn’t make incorrect promises just to get more business.
2. Bangladesh export business has built trust and a good reputation. Despite a chequered past (low quality, human rights issues, etc) they have managed to overcome and are winning.

*Wholesale, Retail, etc.*
1. More people will prefer to buy from retail stores where there is perception of safety (Eg. Sanitation, cleanliness, crowds, etc). They will move more towards malls away from markets. Many will move towards online stores. Wholesale suppliers also need to concentrate on such retailers.
2. Customers also need to be ringfenced:
a. A high end restaurant in Delhi is giving 40% of bill value as a gift coupon to be used anytime upto December 2020.
b. Car companies are giving buy back offers, incase the customer loses his job in the next one year.
3. Pricing needs to be re-approached. People are looking for cheaper prices or cheaper goods.

*Brick & Mortar in Discretionary Spends.*
1. Cinemas could take a big hit in the near future. Entertainment could move home.
2. Because of this, cafes and restaurants might see some increase in business. Many chains are implementing measures like social distancing like lesser furniture, etc, to build confidence to consumers.
3. Smaller retailers need to send a message of safety. Eg: Have sanitisers, put up notice of no Covid positive employee found in the store, maintain social distancing, etc.
4. Since travel and tourism will take a big hit, connected purchases will also shift. Purchases that happened abroad will happen at home. (Eg. Electronics, Luxury goods and apparel, etc.,). But travel related purchases will drop.

*Real Estate*
1. Indian real estate economy is sitting on a huge inventory with a huge cost-of-carry
2. The industry is highly leveraged with low margins.
3. Unsold inventory is considered as an appreciating asset, but might turn out to be a flawed view.
4. Market was already overdue for a huge reset, which will be accelerated by the pandemic.
5. Also, the sharing and co-working space could be hit as more businesses try to have their own smaller spaces and more WFH employees.

*Jewellery etc.*
1. Gold-as-an-asset could see appreciation.
2. Jewelry, as a discretionary spend, will take a hit.
3. The Indian wedding industry will take a hit, as social distancing, cost consciousness, travel avoidance, etc., will prevent fat weddings, destination weddings, etc. This will hit all connected industries. (Eg. Silk, partywear, etc)

*Financial Markets*
1. There will be value destruction and value creation in different companies in the same sector.
2. High Debt low margin companies will find it difficult. (indicates risky or unscrouplus management)
3. High Debt high margin companies could be rewarded, but caution needs to be exercised. (may indicate sharp or dynamic management)
4. No debt high margin companies are best rewarded now.
5. Know more about the CEO and management and their actions and activities.
(Eg: 3 branches of Starbucks were kept open in India for last few days. The CEO of Starbucks India sat in the Fort (Mumbai) branch throughout the day to give his employees confidence and motivation)
6. New tech unicorns will be born. Those involved in cyber security, cloud services, online education services, etc.

*Forex Markets*
1. No doomsday scenario (i.e. Dollar will become 90 rupees etc). Such scenarios don’t seem realistic
2. Govt should be buying as much oil as possible, as such prices may never be seen in the future of oil.
3. As the western economies are more battered and Indian economy is less battered so far, there is more liquidity coming in. That’s why there is a rally in the market. This scenario could change depending on the spread of the disease in India.
4. Watch out for sharp spikes in the market. Better to avoid the spikes.

*Outlook for near future.*
*A. Large Companies*
a. Huge concern seen for employees. Companies are paying the employees even when closed.
b. HUL Decided not to cut a single rupee for their suppliers, service providers, etc. No haircuts.
c. Safety of employees and customers is becoming a major point of focus.
d. This is possible because they have reserves of funds, etc that have been built up over the years.

*B. Medium and Small businesses.*
a. They have to work with thin capital reserves. Excess capital is taken out of the business and applied into personal assets.
b. Small businesses take out the surplus and purchase personal assets instead of re-investing in the business. There are various factors and motivations here.
c. Because of this, they are unable to meet the cash expenses of even the next month.
d. A high end restaurant chain in Delhi (with Rs.40 crore annual turnover) is unable to pay the salaries of the current month as it has no liquid reserve. Owner has invested in personal assets like house in London, etc.
e. Medium and Small business need to have a look at how they can build some business reserves to endure such disruptions.

*“Force Majeure” in Contracts*
1. Should force majeure clauses be triggerd in various contracts like rent, supply, etc? It will lead to litigation, but there is no point in getting into litigation now.
2. All parties have been affected by the crisis. The tenants, the landlords, the lenders/financiers, etc.
3. Parties need to sit across the table and find a common ground and mutually decide upon the costs, rentals, etc. Burden has to be shared.

*Work From Home Scenario.*
1. It is possible for lot of employees to not visit the office and still be productive.
2. In RBL corporate office, it is found that it is enough that only 30% staff stay in the office. Others can be connected from homes. This leads to lesser commute expense, stress of the commute, time wasted, etc.,
3. Parents can take care of children more effectively when WFH. There can be dark hours when no calls will be made, etc.,

*Optimism*
As per a McKinsey survey of entrepreneurs released few days ago, 53% of Indian entrepreneurs are optimistic, while only 25% of Japanese entrepreneurs are optimistic.
It seems to be a mild U-Curve for the Indian economy. But the descent has not stopped yet.

BANK MANAGEMENT SENT NOTICE TO EMPLOYEE - NOT TO POST ANY OVERCROWDING PICTURE OF BANK OR ANYTHING REGADING FUNCTIONING ON SOCIAL MEDIA

State-owned banks in India have barred employees from posting pictures, video clips or messages on social media on issues such as overcrowding at bank branches during the coronavirus crisis, according to multiple sources and documents seen by Reuters.

Banks have seen a surge in traffic after Prime Minister Narendra Modi outlined a package of anti-crisis measures including direct cash payments to millions of poorer Indians, who have been queuing at branches to access the funds.

Some branch staff have complained on social media of the difficulty in imposing social distancing in such conditions, earning a rebuke from employers and even from the police.

State Bank of India, the country's largest lender, said in a notice sent to its employees that disciplinary action would be taken for violating the code of conduct if they spoke on social media about the functioning of its branches.

"On scrutiny of these posts it is observed that many of these social media users are our employees," said the letter, adding that some posts had made disparaging comments about the bank, its management and policies.

A similar memo warning employees against social media posts has also been issued by other state-owned banks including Punjab National Bank, a communication seen by Reuters said.

Emails sent to both banks seeking comment remained unanswered.

Asked about the memos, a spokesman for the Finance Ministry said the Department of Financial Services, which oversees state-owned banks, had not issued any gag orders and was "always looking for honest feedback to improve the customer services".

THREAT OF ARREST

Bankers say they are now also being harassed by police for failing to ensure the social distancing required to help curb the spread of coronavirus.

"Instead of helping us the police are threatening to arrest us," said one bank official, who asked not to be named due to the restrictions imposed by the state-owned bank where he works.

The All India Bank Officers' confederation, a union of bank employees, has raised the matter with federal and state authorities, requesting them not to penalize bank employees.

"So far we're neither getting help to manage the crowds, nor are we being allowed to voice complaints... about the critical lapses and failures of social distancing at banks," said another bank employee who also requested anonymity.

The Finance Ministry spokesman said the government had ordered state authorities "to render all possible help to the bankers in implementing social distancing".

Bank unions said they had also asked for protective gear for branch officials but this had not yet been provided as India is still struggling to meet the safety requirements of health workers.

India has extended a lockdown on its 1.3 billion people until at least May 3 to combat the spread of coronavirus. India has so far reported more than 10,000 cases of the Covid-19 disease caused by the virus, including 358 deaths.

Banking system provides services seamlessly during COVID-19 crisis

RBI governor Shaktikanta Das on Friday said that banks have been required to put in place business continuity plans to operate from their disaster recovery sites and identify alternate locations for critical operations so that there is no disruption in customer services. Further, he said that the payment infrastructure is running seamlessly, and there was no downtime of internet or mobile banking.

On an average, ATM operations stood at over 91% of their full capacity. “Banks have risen to the occasion by refilling ATMs regularly, despite logistical challenges,” the governor said. The average availability of Business Correspondents (BCs) is over 80%, he added.

Earlier, the Business Correspondent Federation of India (BCFI) had said that while the BCs were offering services of cash withdrawal, very few are depositing money in the wake of the current lockdown. The deposits in the banking system grew at the slowest pace of 7.93% year-on-year during the fortnight ended March 27, after private lenders took a hit following the Yes Bank crisis.

Even as banks urge people to use more digital payments, negligible digital payment infrastructure makes this impossible, leaving the rural population in the lurch,” the industry body had said.

RBI moratorium: 10% provisioning may shave Rs 35,000 cr off bank profits

The Reserve Bank of India's directive asking banks to make 10 per cent provisions on all moratorium loans will shave at least Rs 35,000 crore off their profitability in financial years 2019-20 and 2020-21, according to a report.

On Friday, the central bank, in its second set of liquidity-enhancing measures announced Rs 1 trillion specifically targeted fund infusion to small- and mid-sized shadow banks, home financiers and micro-lenders, which will ultimately go a long way in offering some succour to the small and medium enterprises.

"While the liquidity boosters will help the small lenders, the RBI has also stipulated banks to create a 10 per cent provisioning on all loans that are overdue but not yet NPAs (non-performing assets) wherein the moratorium is on, over the March and June quarters. This will impact their profitability by Rs 35,000 crore in the March and June quarters," Brickwork Ratings said in a weekend note.

The new provisioning requirement has to be made for the March and June 2020 quarters and this will impact their profitability in 2019-20 and 2020-21.

The agency said its assessment is based on its assumption that at the system-level banks' ability to manage asset quality in the near-term post the moratorium remains a critical monitorable concern even though they could be able to manage the funds for the provisioning by adjusting against the provisioning for slippages to NPAs in the financial year 2020-21.

Banks will have to categorise the moratorium loans as special mention accounts (SMA) wherein loans are in the 0-90 days overdue buckets.

"As per our estimates, the stipulation on additional 10 per cent provisioning could increase total provisioning by Rs 35,000 crore in the March and June quarters. This assumes SMA accounts are around 4 per cent of total system level advances and are in moratorium.

"Such a large hit on profitability will also impair the capital positions of banks, especially state-run banks many of which continue to report losses for nine months ending December 2019. It may also necessitate further capital infusion into them," the agency said.

After pumping in almost 3.2 per cent of GDP worth liquidity into the system since the February 6 monetary policy to help the economy fight the COVID-19 pandemic spawn disruption, last Friday, the RBI announced another Rs 1 trillion of liquidity boost specifically for NBFCs, housing finance companies (HFCs) and MFIs, which analysts and shadow bankers will ultimately help small businesses the most.

The latest measure has come as two of its most innovative liquidity measures worth Rs 2 trillion since February 6 did not elicit the desired effect.

On Friday, in the second COVID-19 booster dose, the RBI announced a new targeted long-term repo operation (TLTRO), under which it will pump in Rs 50,000 crore into the system, and made it mandatory for banks to invest 50 per cent of the money in lower-rated debt being issued by small and medium NBFCs, HFCs and MFIs.

Apart from the new TLTRO window, the RBI has also opened another Rs 50,000 crore in refinance window for NABARD, SIDBI, and the National Housing Bank by way of cutting the reverse repo by 25 basis points to 3.75 per cent.

Lenders will seek extension of the moratorium on loan repayments beyond June as part of a comprehensive package to support borrowers and revive the economy.

The Reserve Bank of India had on March 27 allowed banks and finance companies to offer a moratorium of three months on payment of instalments of all term loans outstanding as on March 1. This was done in light of the impact of the coronavirus disease (Covid-19). Now, subsequently the nationwide lockdown has been extended till May 3 on Tuesday by Prime Minister Narendra Modi.

Senior bankers said it would get tougher for banks as the onus shifts to them to reactivate the economy. The three-month moratorium allowed to bank borrowers looks inadequate, the bankers said. Borrowers will need comprehensive support covering easing of asset quality norms, tweaking of rules for restructuring.

There is no way that things will limp back till first week of June, said a private banker, adding that the moratorium should be extended for at least three more months from June

False and baseless’: Centre rubbishes reports of 20% cut in central govt pensions

On Sunday, the government said that reports of a 20% cut in central government pensions are “false and baseless” and that the government has planned no such measure.

A tweet posted by the Ministry of Finance read, “It is being reported that a 20% cut in Central Government Pensions is being planned. This news is FALSE. There will be no cut in pension disbursements. It is clarified that salaries and pensions will not be affected by Government Cash Management”.

The Department of Pension & Pensioners’ Welfare also issued a statement on the same stating that such rumours have “become a source of worry for the pensioners”, news agency PTI reported.

“As clarified earlier, it is being reiterated that there is no such proposal for reduction of pension and no action is contemplated by the government in this respect. Instead, the government is committed for the welfare and well being of the pensioners,” the communique issued by the DoPPW said.

In the wake of the coronavirus pandemic, the government had announced that senior citizens, differently-abled and widows who are drawing central government pension will get three-month advance pension in the first week of April under the National Social Assistance Program (NSAP). There are 65.26 lakh central government pensioners.

The Government of India has taken a slew of measures to aid the economy and benefit citizens in the wake of the coronavirus crisis. Last month, Finance Minister Nirmala Sitharaman announced a relief package worth Rs 1.70 lakh crore in the wake of the Covid-19 outbreak.

The government has also released around Rs 30,000 crore in assistance to various sections of the society.

Under a special provision, the government had announced that individuals could now withdraw three months salary from Employees’ Provident Fund (EPF) account amid the coronavirus crisis. The EPF withdrawals have been exempt from service charge.

The government has also introduced measures to provide financial assistance to various sections of the society under its schemes such as PM-KISAN, Jan Dhan, Pradhan Mantri Garib Kalyan Ann Yojana, Ujjawala scheme and National Social Assistance Programme.

The number of coronavirus cases in the country has crossed the 15,000-mark. On April 14, Prime Minister Narendra Modi announced that the 21-day nationwide Covid-19 lockdown will be extended till May 3.

Banks not to make any dividend payment amid COVID-19 stress

Providing relaxation to lenders, the Reserve Bank of India on Friday said that banks shall be exempted from making dividend payment in the light of financial difficulties posed by COVID-19 pandemic.

Making a slew of announcement to ease the pressure on financial sector, RBI Governor Shaktikanta Das said that the 90-day norm will not apply on moratorium granted on existing loans by banks.

To maintain financial health, he said, banks have been exempt to make any further dividend payout in view of financial difficulties arising from COVID-19.

On the inflation front, he said CPI based inflation has declined in March and it is expected to ease further.

RBI will take advantage of the falling price situation and pass on benefit to borrowers, he hinted.

Bombay HC gives order NPa calculation 90 days norms to be excluded lock down period

In a major relief to a Mumbai-based construction company, the Bombay High Court said the period of the lock-down is to be excluded while computing 90 days for the declaration of non-performing assets (NPAs).

The decision of the High Court came on a petition by Transcon Iconica, which took a loan from ICICI Bank, and twice failed to make payments - January 15 and February 15 - and this has not been paid until now

According to the RBI circulars and notifications if payment is not made and the accounts are not regularised within 90 days of the date of default, then the borrower's account gets classified as NPAs. But before the completion of this period, the lock-down was announced. The RBI also announced the moratorium on loan payments, which would start from March 1 to May 31.

 

The single judge bench headed by Justice G.S. Patel observed that the period of the moratorium during which there is a lock-down will not be reckoned by ICICI Bank for the purposes of computation of the 90-day NPA declaration period.

 

"As currently advised, therefore, the period of March 1 until May 31 during which there is a lock-down will stand excluded from the 90-day NPA declaration computation until—and this is the condition—the lock-down is lifted", said the High Court.

 

The court also observed that irrespective of the continuance of the moratorium until May 31, if the lock-down is lifted at an earlier date, then this protection available to the petitioners will cease on the date of lifting of the lock-down, and the computing and reckoning of the remainder of the 90-day period will start from that earlier lifting of the lock-down-ending date.

 

The High Court also clarified that this order will not serve as a precedent for any other case in regard to any other borrower who is in default or any other bank. Each of these cases will have to be assessed on their own merits, it said.

 

After the RBI issued a circular giving liberty to all banks to allow a moratorium of three months on payment of installments outstanding as on March 1, the construction company moved the court seeking moratorium period to be "excluded even for the computation of any balance days of the NPA-declaration 90-day period."

 

Justice Patel clarified this order is not a backward extension of the moratorium to January 2020. "The moratorium period of 1st March 2020 to 31st May 2020 does not per se give the petitioners any additional benefits in regard to the prior defaults, i.e. those that occurred before 1st March 2020. Thus, the relief to the petitioners is co-terminus with the lock-down period, not the declared end of the moratorium. This is the only way to harmonise the present requirements of both sides," observed the court.

 

ICICI bank, through its counsel Viraag Tulzapurkar, had however questioned the maintainability of the petition.

Who Will Save Bankers from Corona, Customers and Local Administration?

 While the government announced a package of measures for the poor, it failed to visualise that this may bring customers to the bank and the social distancing could go for a toss, exposing the bankers to the risk of contracting coronavirus. This is exactly what has happened as revealed in a tweetstream of banker who calls himself Newton Bank Kumar (@idesibanda). He created a hashtag #BankerHaiPoliceNahin, which remained trending  on Twitter for quite some time

How many reminders do u need
sir @narendramodi ji?
Banks are becoming the epicenter of CORONA. pls re-think about economic soldiers and citizens.
Thanks to @ABPNews for this coverage.@nsitharaman @idesibanda @ndtv @WHO @IndiaToday @IndianExpress https://t.co/vcWEnQPgHk pic.twitter.com/MrWfYwooPF

— Anil Kumar Meena (@Anilmeena89) April 13, 2020

Banking is the backbone of economy and so during the corona virus (COVID19) pandemic, it was considered as essential service. Bankers were asked to keep branches functioning with skeleton staff. However, due to lack of protective gears and mostly any security, these bankers are finding it very difficult to handle the situation, and are constantly working under fear of catching corona or facing anger from customers.

 

Several unions and associations of bank employees and officers have been raising voices about the risky environment under which they are forced to function. However, till date there is no respite from the government while number of customers visiting bank branches continue to increase. 

 

There have been some incidents where customers tried to attack bankers as well. Main issue all bank staff is facing is overcrowding in branches and lack of social distancing. However, instead of helping bankers do their jobs at some places like Barabanki, and Meerut. 

In fact, in Gurdaspur in Punjab, one deputy commissioner of police detained a bank manager for failing to enforce social distancing norms. As per report from The Tribune, after seating in the police station for half an hour, the manager was asked why he let the customers break social distancing norms.

In March, Indian National Bank Employees' Federation (INBEF) has raised this issue. Subhash S Sawant, general secretary of INBEF, in a letter to Sanjeev Bandlish, convenor of United Forum of Bank Union (UFBU) had said, "Customers irrespective of their age and gender do attend the branches.

 

We do not know their health status. They do use our banking services including toilets, sofas, chairs, and drinking water, whereby we are exposed to the maximum risk of contact. Branches have not even provided with required sanitisation kits and equipment. Under such circumstances it has become very difficult and vulnerable to work at the branches." 

 

Last week AIBEA sent a letter to Debashish Panda, secretary in the department of financial services on special leaves and providing special insurance to bank staffs. In the letter CH Venkatachalam, general Secretary, AIBEA, says, if bankers are quarantined for 14 days or hospitalised for treatment of COVID19, then this should be treated as special leave. 

 

"As a welfare gesture the finance minister has announced that all medial, para-medical and other frontline workers and connected staff who are on duty during this period will get an insurance cover of Rs50 lakh for three months.

 

Since bank staff are also facing the same kind of problem and risk possibilities, banks may be advised to go in for a similar comprehensive group insurance cover against risk to health and life during the next three months," the bank employee union demanded.

 

According to Mr Sawant from INBEF, the main reason for overcrowding in banks is relief deposited by government in bank accounts, especially for poor, who have no other source of income during the lockdown. He says, “We had cautioned the government that instead of depositing Rs500 per month in Jan Dhan accounts of women for three months it would have been better to depositing Rs1,500 in one go so that these account holders will not rush every month to withdraw the said amount. Similarly, other direct benefit transfers to farmers, labourers and weaker section have further added to the woes of the bank employees. There is heavy rush in the bank branches across the country, which have violated the norms of social distancing. Incidents of mob violence and man handling of the bank officials have been reported across the country.”

Basically, central, zonal or regional offices of the bank manage security at branches. When there is no security provided by the bank, the local police station is mandated to regularly visit the branch and mark it in a police diary kept in the branch.  

 

“Instead of providing security to bank officials police authorities are seeking explanations and issuing notices to bankers, which is really unfortunate. It is learnt that the ministry of home has issued advisory to all states to provide protection to doctors, medical and para medical staff. We therefore urge the finance minister, to issue similar advisory for bank staff as well,” Mr Sawant says in a letter sent to finance minister Nirmala Sitharaman

BANK EMPLOYYES TO MANAGEMENT REGARDING COVID19

UPTO 30.06.2020-MORE TIME FOR SUBMITTING FORMS 15G, 15H FOR FY2020-21 TO AVOID TDS

The Director (IT budget) CBDT by order u/s 119 permitted eligible tax payers to submit Form 15G/15H till June 30, 2020 for FY 2020-21. As per the order dated April 3, 2020 posted by the CBDT on its official twitter handle, “In case a person submitted valid 15G/15H to the banks/ for FY 2019-20, then this valid form G and 15 H will remain valid up to 30.06.2020 for FY 2020-21 also”.

The order of Ministry of Finance stated that the above decision was taken in view of the pandemic Covid 19 virus outbreak, resulting in severe disruption in the normal working of almost all sectors of the economy including functions of the Banks, other institutions, etc. In such a situation, there can be instances that some eligible persons may not be able to submit form 15G or 15H timely to the banks and other institutions, etc. that may result in deduction of TDS by banks or other institutions. Therefore to alleviate the genuine hardship of such eligible persons who are required to submit the Form-15G/Form-15H where there is no tax liability, the Director of CBDT issued above directions/clarifications by the exercise of its power u/s 119 of the act, it said. It is reiterated that the payer who has not deducted tax on the basis of the said Form 15G and Form 15H shall require to report details of such payments/credit in the TDS statement for the quarter ending 30.06.20 for FY 2020-21

EXPECTED DA FOR BANKER FROM MAY 2020

 Expected DA Calculation Updated on 31.03.2020 on the basis of CPI for the months of  Jan'20 & CPI for Feb'20 announced on 31.03.20 as 7486.89 (two point down from Jan'20) with the assumptions of CPI for the month of Mar'20 as under:-

1. On assumptions if there is an increase of two point of CPI in the month of Mar'20. In this situation the expected (tentatively) increase in DA Slabs would be Zero and the total tentatively revised DA slabs would remain same 759 i.e. 75.90%.
2. On assumptions if there is increase of three points in CPI in the month of Mar'20. In this situation the expected (tentatively) increase in DA Slabs would come to 12 slabs and the total tentatively revised DA slabs would be 771 i.e. 77.10%.
3. On assumptions if there is increase of four points in CPI in the month of Mar'20. In this situation the expected (tentatively) increase in DA Slabs would come to 14 slabs and the total tentatively revised DA slabs would be 773 i.e. 77.30%.
4. On assumptions if there is an decrease of two point of CPI in the month of Mar'20. In this situation the expected (tentatively) decrease in DA Slabs would be six and the total tentatively revised DA slabs would be 7539 i.e. 75.30%.