MAIL SENT TO HON'BLE FINANCE MINISTER BY ALL INDIA RETIRED BANK EMPLOYEES ASSOCIATION

COPY OF THE MAIL SENT TO HON'BLE FINANCE MINISTER BY ALL INDIA RETIRED BANK EMPLOYEES ASSOCIATION :

Respected Madam,

On behalf of Bank Pensioners, we take this opportunity to immensely thank you for not only your words about need for improvement in their pension, but also the empathy and sympathy you have showered on them. Perhaps, for the first time after the introduction of pension in Banks, we are feeling such warmth. These words have brought smiles on the faces of Bank pensioners. These words have also brought confidence in them. Now, they are sure about improvement in their pension, with your kind support. When your kindself has full knowledge about the need for improvement in pension, we do not want to take valuable time of yours, explaining about the need for improvement. Thank you very much, Respected Madam

Instead of explaining the reasons or grounds for improvement in pension, we would like to submit or offer our suggestions, which may help in arriving at an early and positive decision. Based on what is stated in communications with regard to updation of pension in Reserve Bank of India, including speaking order of Department of Financial Services dated 23.10.2009, we believe that our pension would also be updated on the lines of improvement in pension in Reserve Bank of India, duly incorporating such required modifications.

We are also aware of requirement of maintaining Accounting Standards with regards to Pension Funds in Banks and also outgo affecting Profit and Loss Account and Balance Sheets of Banks, when our pension is improved. We are also aware that the provisioning is one of the barriers we need to cross. In this direction, we request you to kindly consider the following submission and kindly order/approve improvement of our pension on the lines of updation of pension in Reserve Bank of India :

a. Amortisation of enhanced liability for a long period of time, whereby amount to be provided is almost equivalent to early outgo. With this, there is minimum effect on profitability of Banks, while following norms stipulated in Accounting Standard 15/ Ind Accounting Standard 19. We have precedence in this regard ;

b. Since most of the Bank Pensioners are from Public Sector Banks, Government may guarantee payment of enhanced portion of pension, which would address the aspects relating to following Accounting Standard 15/Ind Accounting Standard 19. This will not affect the profitability of Banks on account of provisions affecting Profit and Loss accounts. Guarantee would come into play only in the event of liquidation of Banks, which are most unlikely to happen. When banks are guaranteeing various loans, perhaps, chances of invoking of this guarantee is remote and may not arise ;

c. The Government may pass appropriate orders exempting enhanced portion of pension from the provisions relating to maintenance of Accounting Standards in respect of AS 15/IAS 19 ;

d. Marking lien over Government of India Bonds invested by these Banks over and above prescribed limits to the extent of additional liabilities. In any case, Superannuation benefit liabilities have the first right over the assets of the Banks in case of liquidation of Banks. Over a period of time, the Banks continue to invest in GOI Bonds over and above stipulated minimum limits on account of poorer credit offtake.

In this direction, we would like to bring to your kind notice that the profitability of Banks is affected by provisioning. These Banks are also providing for Standard Assets, including loans against securities, such as Banks’ own deposits, Gold Loans, Government Securities such as National Savings Certificates/Indira Vikas Patra, etc. Even though Banks are incurring loss/reducing profit on account of provisioning for these loans, such monies are in the Banking system and Banks continue to deploy and earn on these amounts also. In any case, Banks are compelled to provide for systemic risks. Making provisions for improvement of pension of their former employees who have laid a strong foundation with their sweat and blood, is certainly a necessity, like making provisions for fully secured Standard Assets. These former employees have contributed and ensured that these Banks make profit and pay Dividends to the Government during last sixty years. Banks were earning substantial profits, till recently.

In the Bipartite Settlement and Joint Note dated 11.11.2020, it is agreed for enhancement of contribution by Banks to NPS from 10% to 14%. Therefore, it would not be difficult for the Banks to undertake improvement in pension by providing additional amount for improvement in pension, as most of the employees who are entitled to pension in terms of Bank Employees’ Pension Regulations, 1995 would retire in next few years and the maximum outgo would be towards contribution to NPS only.

We request you to kindly order and/or approve improvement in pension in Banks, keeping in view what is stated (supra). We humbly submit and request your kindself to ensure that your empathy and sympathies are translated in improvement of pension in Banks. We request your kind indulgence.

Respected Madam, there are many pensioners who are drawing pension of Rs.3,000/- to Rs.4,000/- per month. We are aware that it is extremely difficult for them to live with meager pension. Many of them do not have support of their Children. Some are also living as destitutes. Therefore, we once again appeal and request your kind indulgence and improve pension including increasing minimum pension substantially.

Thanking you,

With warm regards,

R K Dhoot

Secretary General