officers' cause june - 2017 - aisbofaisbof.org/rece/oc-june-2017.pdf · ·...

OFFICERS' CAUSEJUNE - 2017

Vol. 37 No.6 Single Copy : RS. 4/- JUNE - 2017

2NATION FIRST, ORGANISATION NEXT, INDIVIDUAL LAST

ver since the country got independence theBanking Industry in India has been taking

active part in the lending activity keeping thepolicies and programmes of the Government fromtime to time. The accounting system in thebanks before the advent of reforms era in thefinancial sector was being managed within andthe Boards have enormous power in dealing withthe bad debts. The provisioning norms wereliberal and there was no question of any bankcoming into red despite the huge loan portfoliothat was being handled by the banking industry.The introduction of international standards forthe purpose drawing up the balance sheet withthe prescription of prudential norms and capitaladequacy as decided by Basel Commission fromtime to time and during the year 1990’s forcedthe banks to come out with the true picture ofthe bad debts,popularly known as non-performingassets. The capital adequacy norms are thatthe bankers are expected to have their ownstakes in the form of capital in the range of 8%that improved upto 12% over a period of time.A large number of banks could not meet thisstandard. The banking industry for the purposeof the analysis of balance sheet was classifiedinto three groups, i.e. the Banks’ that are makingoperating profits, the banks making net profitsand the banks incurring losses.

NPA – WHITE WASHING

During the middle of 1990’s the Government ofIndia took several stringent steps in the nameof cleaning up of Balance Sheet that enabledthe banks to wipe out nearly ` 1,50,000 croresof bad debts and came out with clean balancesheet to enable them to compete globally. Theaccountability of the banks however continuesto haunt them due to the rigid procedures underthe vigilance which did not undergo any changewith the changing international environment forthe banking industry. In the process a largenumber of corporate accounts have escaped fromthe responsibility of paying back their dues tothe banking system. Due to the continuouspressure on the part of the unions/associationsand also top executives of the bank forempowering the banks for forfeiture of assetscharged to the banks by the borrowers, theGovernment came out with a legislative measureknown as SARFAESI & DRT Acts which enabledthe banks to take possessions of the propertiescharged to them and auction them to realizethe dues. This helped a few of the banks torecover their debts due from the large industrialhouses. Still, some of the defaulters werecapable of escaping from the responsibility ofrepaying the debts to the banking system dueto the indirect support from the Governmentagencies. The unions continued with their efforts

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Editorial

SUCCESS AWAITS AT THE DOOR WHERE DILIGENCE IS

Officers' Cause, June - 2017 3

to highlight the real problems of the recoveryof NPA and how the large industrial houses havebeen escaping from the responsibility in clearingtheir debts to the banking system. In thecourse of ensuring adequate capital to the banks,the Central Government attempted to declaresome banks as weak with the intention to handover them to private operators. This sinisterdesign influenced the unions in the bankingindustry to come together forgetting theirideological differences and thus the United Forumof Bank Unions came intobeing. Since then thisforum is spearheadingthe issue of recoveryof NPA’s from the largeindustrial houses.

The drama is now beingrepeated once again inthe name of recoveryof huge NPA’s which isestimated to be inthe range of over` 5,00,000 crores. Thegross NPAs of publicsector banks as at 30thJune 2016 arefurnished separetely.The central Governmentis insisting that thebanks should come outwith their plan forinfusing of capital,cleaning up of thebalance sheet byrecovery of NPA’s etc.The matter receivedthe attention of theMinistry of Finance inits regular meetings.The executives of theBanks have beeninstructed to come outwith their proposals for the speedy recovery ofNPA’s. The Bureau of Banks Boards also steppedin as the elder brother of the banking industryand overseeing authority of the banking systemin the country insisting for a stringent measuresfor the recovery of dues from the large borrowers

etc., The Reserve Bank of India has beenentrusted under Bankruptcy Code through anordinance with the special responsibility ofcoming out with proper proposal for the recoveryof huge NPA;s in the banking system. TheGovernment has also advised the banks to comeout with top defaulters list that has to beplaced before the Parliament and Public withnecessary corrective/recovery measures.These are known game plans of the Government.We have the past experience, wherethe Government compelled the banks to write

off huge debtswhich are due fromthe Corporateborrowers in thename of keepingthe balance sheethealthy. TheGovernment isalso indicat ingrestructuring ofthe banks with theexperience thatthey have gainedfrom the recentmerger of theAssociate Bankswith the StateBank of India.With the generalelections round thecorner in the nexttwo years, banksare required tocome out with theirplan of action forrecovery of NPA’s.Once, the timetested measures ofrestructuring ofdebts, convertingthe outstanding’sinto equity, onetime settlement

etc., commences, the Government will go withfull preparation to take advantage of the hugedues from the industrial houses by the timethe election process starts in the country. Itis going to be yet another whitewash of thehuge debts that have been locked in the accounts

Gross NPAs of Public Sector Banksas on June 30, 2016

S No. BankGross NPA(Rs. in crore) NPA Ratio (%)

1 Allahabad Bank 18769 12.922 Andhra Bank 14137 10.33 Bank of Baroda 35604 13.234 Bank of India 43935 16.015 Canara Bank 30480 9.786 Central Bank of India 25107 13.527 Corporation Bank 15726 11.018 Dena Bank 9636 11.889 Indian Bank 8690 7.11

10 Indian Overseas Bank 30239 20.2611 Oriental Bank of Commerce 17209 11.4512 Punjab & Sind Bank 4566 7.2313 Punjab National Bank 55003 15.4114 Syndicate Bank 13475 8.0315 UCO Bank 21495 18.6616 Union Bank of India 25560 10.5217 United Bank of India 10104 14.2818 Vijaya Bank 6589 7.3119 State Bank of India 93137 7.820 * State Bank of Bikaner & Jaipur 4593 6.221 * State Bank of Hyderabad 9436 8.3922 * State Bank of Mysore 4323 7.8323 * State Bank of Patiala 11365 13.3324 * State Bank of Travancore 6401 9.38

25 * Bharatiya Mahila Bank Ltd. 3 0.4TOTAL 515579

* Since merged with State Bank of India

ARISE, AWAKE, STOP NOT TILL THE GOAL IS REACHED

4 Officers' Cause, June - 2017

Text of AIBOC Circular No.2017/28 dated 9th May,2017.

QUOTE:

International Workers’ Day which is often referredto as May Day is a celebration of labourers andthe working classes and it is promoted by theinternational labour movement. May Day is anoccasion that pays tribute and respect to workersand their contribution towards making our liveseasier. A cause close to the heart of men, May Daycelebrates and honours workers. It is a public holidayof much importance to labour rights’ activists.

The historic May Day has been celebrated all acrossour country under the banner of AIBOC in a grandfashion and in its true grandeur. Thousands of ourcomrades came forward to commemorate themartyrs of 19th century who made history bysacrificing their lives and red painted the flag of MayDay with their blood to give shape to a labourdominated society, the fruits of which we are stillenjoying. We dedicated the special day to lakhs ofour distressed farmers, urged public conscienceabout the importance of Public Sector in Indianeconomy and re-christened the day as “Save PublicSector, Save Farmers and Save India Day”

We give below some of the glimpses of May Daycelebrations.

In Kolkata it started with sky rocketing sloganschanted by a huge gathering assembled at the LocalHead Office of State Bank of India at Kolkata underthe stewardship of AIBOC, West Bengal State unit.The meeting began with paying homage to themartyrs of Haymarket Square in the form of a chorussong sung by comrades from different affiliates. TheCommemoration Flag was hoisted by the leaders ofthe State committee amidst shouting of slogans andsalutes renting the air. The speakers highlighted the

relevance of May Day in the present day context anddescribed the plight being faced by the peopleengaged in farming sector and the impending threatthat Public Sector in the country is slated to face.Bardhaman, Midnapur, Krishnanagar, Siliguri are theother prominent cities in west Bengal where memberssang, walked on the roads, shouted slogans,assembled at prominent places and deliveredspeeches to mark the special day in its true spirit.Different affiliates of AIBOC also made their markthrough various activities like blood donation campsand meetings. The day marked an end with a pressconference by AIBOC west Bengal State leadership.

The historic event marked splendid commemorationat Guwahati where the May Day was celebrated inpresence of all the other constituents of AIBOC. ThePresident of Assam State Unit kick started themorning event by hoisting the May Day flag amidsta huge gathering shouting slogans all along to marka revolutionary start of the event. The secretary ofthe Assam State Unit while briefing the media,elaborated the theme of this year’s commemorationand its relevance in present day context andinformed the press about our decision to observeevery Monday of the week as protest day when“Dharnas” will be arranged across the seven statesof North Eastern Circle on various demands underthe Banner of AIBOC. The flag hoisting ceremonywas followed by a general meeting arranged bythe State Committee to have a thread barediscussion on the Govt. Policies vis a vis the standtaken by AIBOC and to chalk out future course ofaction taking a queue to the spirit that MAY DAYinstilled amongst each of the participants. Tripura,Shillong, Manipur, Mizoram are other prominentstates and centers where the day marked a gloriouscelebration.

The Tamilnadu State Unit of AIBOC marked ahilarious celebration of historical May Day with daypacked programmes ranging from hoisting of May

of the industrial houses. It is the people’smoney which should have been safeguarded bythe representatives of the people in theParliament. The debts of the farmers, the smallbusiness enterprises, the small scale industriesis trumpeted in the market and the series of

farmers committing suicide for paltry percentageof NPA’s, whereas the large scale NPA’s whichis the contribution of the few Industrial Housesgoes under the carpet thus defeating the verypurpose of the recovery Thus history repeatsitself.

CELEBRATION OF MAY DAY

Officers' Cause, June - 2017 5WORK IS WORSHIP , DO YOUR DUTY

In tune with the same, all other State Units ofAIBOC also celebrated this remarkable day ofworkers by convening meetings, hoisting flags,shouting slogans and organizing demonstrations atthe respective cities. The celebration of May Day2017 by all the affiliates under the banner of AIBOChas been a great success.

Day flag to mass gathering, meetings , pressconferences and also demonstration in front of RBIOffice, Chennai condemning the statement madeby its Governor and Deputy Governor as regards toPublic Sector Banks. They also provided letters to21 children of farmers who died this yearundertaking to take care of their entire educationexpanses up to college level.

he Indian Banks’ Association has indicated thatit is ready for the next round of discussions on

the 11th bipartite negotiations. However, the unionshave been insisting with the Managements of all theBanks for giving unconditional mandate to IBA sincethe industry level negotiations always cover the salaryscales in respect of all the employees and officersworking in the bank, from Substaff to the GeneralManagers, covering 4 grades and 7 scales in theofficers category and two scales in the AwardCategory. Historically, since the Pillai Committeerecommendations there was no discrimination inregard to the bipartite discussions covering all thesescales, although some banks made attempts to dividethe officers into two categories, that is, from Scale Ito Scale III and Scale IV and above at the time ofhanding over their mandate to the Indian Banks’Association. Such attempts were thwarted and theIBA as well as the Managements of some of the banksfailed in their attempts on the earlier occasions.

2. It is understood that some of the banks are stillhesitating to give unconditional mandate for thepurpose of negotiations under the 11th bipartite. TheConfederation has already taken up the matter withthe Government as well as respective Managementsfor creating a cordial atmosphere so that thenegotiations could be smooth and hassle free sincethe Government has been repeatedly stating that it

would like to conclude the negotiations on the 11thbipartite settlement in good time.

3. The Federation has already sent a letter to theState Bank management for the submission arevised mandate authorizing the IBA to negotiateon the salary scales of the officers of all categories.The issue is being followed up with the Management.There was a brief follow-up meeting with theManagement in this context and we have raised thisissue on a serious note and conveyed our seriousresentment over these developments and also ourfirm resolves urging them not to go for a partialnegotiation with the Indian Banks’ Associations.

4. The officers of Scale IV and V are the membersof the Federation and have been with the Federationin their long journey of struggles, sacrifices andachievements. Many Scale IV and V Officers alsohold positions at the Circle Associations and in theFederation. The achievements in salary and perksclinched over a period of time can’t be negated inone stroke. Therefore there is a need to be unitedand the Federation, the AIBOC and the UFBU isdetermined to thwart any attempt to divide theofficer’s fraternity.

5. Federation also had a co-ordination meeting withtheir Staff Federation on the 22nd May, to review

BOTTLENECKS IN THE COMMENCEMENT OFSALARY REVISION NEGOTIATIONS IN BANKING INDUSTRY

onfederation had on 20th May 2017 sent acommunication to Hon’ble Finance Minister

of India for his intervention in the matter Salary

revision negotiation and to resolve the issuewithout any further escalation which may affectthe smooth conduct of the negotiation.

BIPARTITE NEGOTIATIONSPRESSURE EXERTED FOR UNCONDITIONAL MANDATE

MEETING WITH MANAGEMENT FOR OTHERPENDING ISSUES ON 22ND MAY, 2017

CO-ORDINATION MEETING WITH STAFF UNION ON 22ND MAY, 2017

LabourIssues

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he XIth Bipartite wage negotiations have begun,with the first meeting being held on 2nd May,

2017 at the IBA. The Charter of demands would besubmitted in the next meeting by both, the fourofficer’s organization and the five workman’s unions.As usual the Chairman and MD’s of various Bankshave expressed concerns over the growing NPA’sand the lack of paying capacity in certain Banks. Thishas been the same old story of IBA in all the tenbipartites held this far. Not in one bipartite since 1984for officers and since 1967 for workmen has a wagerevision been given on time and with dignity. But themost shocking part is that this time there is cleardesign to divide officers of Scale IV and V from theofficers of Scale I to III which is a sinister attempt tode-unionise the senior officers, entice them withhigher wages and ultimately trap them into theconcept of performance linked variable pay and oncost to company (CTC) basis.

2. This is yet another initiative on the part of theGovernment of India, to de-unionize the seniorofficers, in particular the Scale IV and above in all thebanks including the State Bank of India. Membersare aware that the All India State Bank Offices’Federation has the membership of all the Officers inall grades and in several cases even the seniorexecutives. They have all contributed wholeheartedly in building a strong edifice for theFederation ever since it was established in the year1965. The Federation is a live organization andresponds to each and every members’ aspirationsirrespective of the scales grades.

3. Federation had traversed a long way since 1965,the year of the foundation of this great organizationand have been fortunate to have the services of the

senior officers all over the country in strengtheningthe Officers’ movement. It will not be out of placethat several senior executives have also been partof the leadership of this great organization both atthe Federation as well as the Circle levelassociations. Functioning of the organisaiton hadbeen totally democratic and transparent and theseniors have total freedom to express their views.They had been benefited by their wisdom andguidance on all occasions and they have remainedloyal to the Federation throughout their career.Federation owe their gratitude to all those seniorswho helped in maintaining the unity of the Federationthroughout their journey.

4. In the past there were continuous attempts by theIndian Banks’ Association to divide the senior officersin the banks to ensure that they should not be a partof the trade unions representing the officers’fraternity in the bank. It is to the credit of the entireOfficers’ community that such attempts werethwarted in very effective manner by our Federationand the Confederation.

5. The 11th Bipartite Negotiations are on. The IBAand some of the major banks have started the samegame plan suggesting to the Officers’ organizationsthat they will not be able to negotiate on behalf of allthe scales and grades as hitherto since some of thebanks’ managements have furnished a conditionalmandate to them for negotiations, restricting thenegotiations only upto scale III and that the remainingscales would be decided by themselves. TheConfederation as well as the Federation is very clearon this issue. There is no question of restricting ournegotiations only upto scale III and theConfederation is not going to accept such a

the industrial relations situation in the Bank. TheFederations have conveyed their sentiments overthese developments and wanted immediateresumption of tripartite meeting on all the commonissues with the Management.

6. A meeting with the Management of theBank was held on the 22nd May 2017 whereinmany issues pertaining to the officer’s communitywere also raised, apart from the issue ofmandate.

ATTEMPT TO DE-UNIONIZE SENIOR OFFICERSFEDERATION IS FULLY PREPARED TO FACE THE ATTACK

CURRENT NEGOTIAONS ON SALARY REVISIONWILL CONTINUE TO BE FOR ALL SCALES AND GRADES

MEETING OF OFFICERS OF SCALE IV AND V AT CIRCLE/MODULE LEVEL

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condition. More so, it is between the IBA and theindividual member banks and the Confederationcannot be a party for such understandings betweenthe IBA and the individual managements.

6. Federation had also communicated to theManagement of State Bank of India that the Bankshould give an unconditional mandate to the IBA andit should not create any hurdles in the process ofnegotiations in the best interest of the bankingindustry. There is no question of any truncatednegotiations and there has to be proper andcongenial atmosphere in the bank before thecommencement of serious bipartite negotiations inthe banking industry.

7. It is necessary for everyone to acknowledge thegreat contributions made by the senior comrades inbuilding a strong Federation and also strengtheningthe Circle Associations all over the country. TheFederation is known for its pragmatic approach andtotal consolidation of the officers of all ranks andgrades in the State Bank of India. It is their strengthand courage that has helped the industry as well to

reap rich benefits by way of improvements in theservice condition from time to time. It is a historicalfact that all the seniors have participated enmassein all the strikes so far and to cap it the indefinitestrike that was conducted in the year 2006 for theimprovement in the superannuation benefits. Hence,it is the duty of the Federation to express theirgratitude for their continued support despite severalattempts from the Management at the instance ofthe Government and IBA to wean away them fromour midst.

8. Federation is confident that the members in seniorscales have always supported them and continue tosupport. It is necessary to get prepared for everysacrifice in case the sinister design of theManagement and the Government supported by theIBA continue to undermine the participation of thesenior officers in their movement. Let all membersbe in readiness for any sacrifice for defending thetrade union rights of the supervisory staff at all levelsso that the Federation continue to remain a stronger,vibrant and committed for all times to come.

Text of UFBU Circular No. UFBU/2017/07 dated3rd May 2017.

RISE IN PROTEST AGAINST RBI’SPROVOCATIONS OF RE-PRIVATISATIONOF BANKS

OBSERVE AGITATIONAL PROGRAMMES GET READY FOR ALL INDIA STRIKE

Members are well aware of the multiple challengesfaced by the banking sector particularly, the PublicSector Banks. The bad loans are increasing everyquarter and it has reached alarming proportion ofmore than Rs.13 Lac Crores. No effective steps arebeing taken to confront the defaulters and to recoverthe loans. Everyone is also aware that bulk of thebad loans is attributable to private corporate andbusiness enterprises. It is disheartening to note thatinstead of recovering the bad loans from thesedelinquents, all types of concessions are beinggiven to the defaulters and bad loans are being soldaway at cheaper price. Government is also

contemplating various measures to reduce the badloans in the books of the banks, instead of stringentmeasures to recover the bad loans.

Recently, the Finance Ministry has extended capitalto various Banks and turnaround plans includingrecovery of NPAs are under discussion.

In this background, it is surprising that RBI Governorand Dy. Governor have made public statementssuggesting Re-privatisation of PSBs, disinvestment,merger and consolidation, reduction of staff throughVRS, etc. as a measure to solve the NPA issues.

RBI is the regulator of banks and instead ofsuggesting ways and means to recover the loansand strengthen the banks, is advocatingprivatization. UFBU meeting held at Mumbai on02.05.2017 took very serious note of theseabsolutely unwarranted provocative statements andexpressed its total condemnation.

PROTEST AGAINST RBI’S PROVOCATIONS OFPRIVATISATION OF BANKS

OUR LIFE IS WHAT OUR THOUGHTS MAKE IT 7 Officers' Cause, June - 2017

It was unanimously decided to express our protestand demand proper clarification from thegovernment as to whether these statements are asper government policy and decision or are they justpersonal remarks of these executives. The followingagitation programmes were decided:

1. UFBU letter to Finance Minister.2. UFBU letter to Governor, RBI.3. Demonstrations all over the country on

09.05.2017 & 16.05.2017 at all DistrictHeadquarters.

n Extra-ordinary Central Council meeting ofAssociate Banks’ Officers’ Association was held

on 27th May 2017. The Management Representatives,past General Secretaries and Presidents of ABOA,Presidents and SBIOA Circles’ General Secretaries,delegates and observers from the five erstwhileAssociate Banks thronged at the premises.

2. The function started with the symbolic outburstof scintillating dance performance by RajeswariSrinath Group. All the Guests of Honour, who arrivedat the venue include Shri Mani Palvesan, CGM,Amaravathi Circle, SBI, Shri Hardayal Prasad, CGM,Telangana Circle, SBI, Com. Y.Sudarshan, Chairman,AIBOC and General Secretary of AISBOF and Com.D.T.Franco Rajendra Dev, General Secretary, AIBOCand President of AISBOF.

4. Com. Harshavardhan Madabhushi, GeneralSecretary of ABOA, while extending a very warm andaffectionate welcome to dignitaries, delegates,special invitees and Management Representativesand expressed that it is a paradox that inauguration

of the Extra-Ordinary Central Council meeting isbeing conducted to pull down the curtains of ABOAby passing a resolution for the dissolution of ABOA.Thereafter, the ceremonial lamp was lit by all thedignitaries sitting on the dais.

5. Com. Y.Sudarshan, Chairman of AIBOC and theGeneral Secretary of All India State Bank Officers’Federation, who was there to inaugurate the CentralCouncil meeting delivered his marathon speechencompassing all the issues in today’s contextconfronted by Bank Officers’ fraternity with an addedemphasis to State Bank Group. Shri Mani PalvesanCGM, Amaravatih Circle and Shri Hardayal Prasad,CGM, Telangana Circle welcomed the officers of ABsand assured that Performers will always be takencare of and equal treatment will be extended to allthe officers of ABs. They emphasized the growingcompetition from the Private Banks and newlycreated Payment Banks.

6. The meeting ended with a vote of thanksproposed by Com. Sunil Dutt Bali, President, ABOA.

4. Postering campaign from 10.05.2017.5. Badge wearing on 23.05.2017.6. All India Strike if there is no satisfactory

response from the Government.

The letter to Finance Minister and Governor, RBIwill be circulated subsequent to submission of thesame. The specimen of Poster and Badge will besent to all Constituent Units in due course.

We request all our constituent unions & their Statelevel Units to undertake these programmessuccessfully.

EXTRA-ORDINARY CENTRAL COUNCIL MEETINGOF ASSOCIATE BANKS’ OFFICERS’ ASSOCIATION (ABOA)

HELD AT HYDERABAD ON 27TH & 28TH MAY 2017

MERGER OF ASSOCIATE BANKS:COMPREHENSIVE APPROACH ON ALL WELFARE SCHEMES

ne of the important areas that need theattention is the Welfare activities which were

in existence in the Associate Banks. Each AssociateBank had its own background in the areas

concerning sports development, welfare facilitiessuch as scholarship schemes, the provision ofholiday homes, the medical facilities provided atthe major centers etc. The Associate Banks have

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also made a name in the national sports such asCricket, Foot Ball, Volley Ball etc., and havecontributed to the success of the sports at thenational level.

2. The State Bank of India has its own structurewith regard to development of sports and otherwelfare activities. They have a Sports ControlBoard at the apex level which takes care of thedevelopment sports activities. The Bank alsoallocates funds in a liberal manner to encouragethe various games keeping in view the brand equityof the bank. The Bank has also got Central WelfareCommittee at the corporate office which looks intovarious areas of welfare facilities extended to thestaff. A similar structure was prevalent in the

Associate Banks as well. The Welfare Funds allocatedat each Associate Banks were also utilized for variouspurposes, with the participation of the Officersorganizations as well as unions.

There were a number practices specific to the localrequirements under the welfare facilities and wasbeing extended to the employees of Associate Banks.Federation had sent a Communication to thecorporate centre to collect all such details ensure thatall the welfare facilities are protected and continuedso that the sentiments and emotions of theemployees who have joined us on merger arerespected and at the same time the welfarefacilities which were available earlier is not givenup.

ISSUES FOR URGENT INTERVENTION – COMMON TO THEOFFICERS AND WORKMEN

he Joint Forum of All India State BankOfficers Federation and ALL INDIA STATE

BANK OF INDIA STAFF FEDERATION have senta communication to the Corporate Centreon 29th May 2017 reminding the managementto resolve many issues common to officersand staff confronting them as indicatedin their joint letter addressed to themanagement.

They have also reinterated their total support tothe Management towards the growth of the Bankin all respect and requested him to convene thejoint meeting of the both the Federations at theearliest to discuss the above referred issues to findan amicable solution to the satisfaction of all. Theissues are long pending and there is a need tocall an urgent meeting to sort out the sameamicably.

BAD LOAN MESS TO GET SORTED IN 3 YEARS: SBI

tate Bank of India sees a “positive turnaround”in the bad loan mess after the government

implements a new rule aimed at resolving theproblem, said Chairman, SBI Smt. ArundhathiBhattacharya said.

“The non-performing asset cycle is different thistime,” said the chairman in an interview withBloomberg News in Yokohama, Japan, “Many assetsare good quality and required by the economy –when growth turns up, they will perform again.

“It’s not going to be such a difficult cycle to turn,”she said from the sidelines of the AsianDevelopment Bank’s annual meeting. “Economic

indicators point to a revival in demand very shortly. Ifyou can get these assets to participate in that cycleagain, I think this is an issue that can be resolved intwo to three years, maximum.”

The Cabinet on 3rd May 2017 approved a plan to givethe Reserve Bank of India more power to order lendersto deal with bad loans, according to an official withknowledge of the matter.

The SBI chairman said she expects it to empower theregulator to resolve the bad loan problem within a fewyears.

India is being weighed down because soured loans

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he new ordinance that empowers RBI to nudgebanks to deal with stressed assets will improve

transparency and provide higher assurance whendealing with bad loans, said Smt. ArundhathiBhattacharya, Chairman, State Bank of India (SBI).“People having to take difficult decisions can nowfeel they are doing it in the proper way, with atransparent process,” said the Chairman.

The government approved an ordinance enablingaction by RBI in case of bad loans. RBI can nowinstruct banks to act against defaulters and proposeresolutions. Even as deteriorating loan books plaguethe Indian financial sector, the Chairman is chartingplans to take the country’s largest bank to a globaltop 30 position.

Source: Economic times -Date-11.5.17

on banks’ balance sheets hinder credit growth andjob creation. Various programmes proposed by theRBI to resolve the problem have been unsuccessful,with lenders reluctant to write down assetssufficiently and company owners unwilling tonegotiate repayment plans.

Stressed assets- made up of bad loans, restructureddebt and advances to companies that can’t servicing

requirements have risen to about 16.6% of total loans,the highest level among major economies, datacompiled by the government shows.

“India needs a lot more infrastructure than it currentlyhas and therefore it does not make sense to throw itaway-rather it makes sense to revive them,”Chairman said.

Source: Financial Express, Dt:5.5.17

BAD LOAN ORDINANCE TO IMPROVE TRANSPARENCY,SBI - CHAIRMAN

EMPLOYEE -DEFINITION UNDER P.F. ACT NEEDS RE-LOOK

uthorities are known for creating disputeswhere there is none or to make the net so wide

so as to have galore of disputes. Finding the solutionto the problems is not their hallmark but by makingthem messy ensures them the epithet of ‘experts’.It has been the main reason for most of thelitigations. Department of Provident Funds adoptsmany methods to use sticks against employers fortheir harassment on the one hand and for indulgingin the corruption on the other. Although thetechnology has considerably reduced the scope ofexploitation yet wherever there is any possibilityof subjective consideration invidious ways areinvariably adopted for arms twisting.

The terms of the definition of ‘employee ‘ underthe Employees’ Funds Act are very wide. Theyinclude not only persons employed directly by theemployer but also persons employed through acontractor. Moreover, they include not only personsemployed in the factory but also persons employedin connection with the work of the factory or

establishment. For example, a home worker in beediindustry, by the fact that he rolls beedies, is involvedin an activity connected with the work of the factorybut under the statutory definition even if a person isnot wholly employed, he would be a person withinthe meaning of the term ‘employee’.

Section 2(f) of the Employees’ Provident Funds &Miscellaneous Provisions Act, 1952, hereinafterreferred to as Act of 1952, is very comprehensive,which defines an ‘employee ‘ as under, which saysthat any person who is employed for wages in anykind of work, manual or otherwise, in or in connectionwith the work of an establishment, and who gets,his wages directly or indirectly from the employer,and includes any person- -

(i) employed by or through a contractor in or inconnection with the work of theestablishment;

(ii) engaged as an apprentice, not being an

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apprentice engaged under the ApprenticesAct, 1961 (52 of 1961), or under the standingorders of the establishment.

Despite above definition it is not easy to determineas to who is an employee in view of variousnomenclatures like home worker, domestic help,daily wage worker, casual worker, workman, part-time retainer, advisor, consultant, piece rated worker,Director, partner, flexitime worker, field worker,agent, commission agent, hawker, vendor,apprentice, trainee, drivers and conductors of schoolbuses, car driver, courier, loader-unloader, driver ofthe company executive getting reimbursement, teammember, karamyogi, hon’ry doctor, volunteer,sevadaar, retired employee of Government, re-employed retired employee, newspaper employees,cinema employees, employees from foreigncountries or Indian employees appointed into foreigncountries, summer trainees paid stipend etc.

Sometimes the employers do not ‘ want to cover suchemployees under the Employees Provident Fund Actwhereas the authorities insist they should becovered. There have been number of casesinterpreting as to who is an employee to be coveredunder the Act. Therefore, it is necessary to have alook at some of the judgments on the subject in orderto understand the legal implications. At the veryoutset reference is made to a landmark judgment ofthe Gujarat High Court in Satish Plastics v. RegionalProvident Fund Commissioner, wherein it has beenobserved that:

“The inclusive part of the definition makes itclear that even if the person concerned hasbeen employed through a contract in or inconnection with the work of establishment,he would yet fall within the description of“employee” within the meaning of the Act.In order to answer the question some otherquestions have to be asked and answeredviz:—

(1) Was he doing the work of monetarypayment?

(2) Was the work done by him the work of theestablishment or has a nexus with suchwork?

(3) Was the payment made wages, in the senseof being remuneration for the physical ormental effort in connection with such work?

(4) Was the work such that it had to be done asdirected by the establishment or under itssupervision and contra! to the extent thatsupervision and control are possible havingregard to the specialized nature of the workor the skill needed for its performance?

(5) Was the work of such a nature and characterthat ordinarily a master- servantrelationship could exist and but for theagreement styling it as a contact commonpractice and common sense would suggesta master-servant bond?

(6) Was the relation indicative of master-servant status in substance having regardto the economic realities irrespective of thenomenclature devised by the parties?

(7) Was he required to do the work personallywithout the liberty to get it done throughsomeone else?

(8) Is such relationship any the less a master-servant relationship in case the person isallowed to work (1) at his own place, and/or (2) at the hours of his sown choice and/or (3) for someone else?”

In the era of very high technological development,where the very concept of work and workplace havecompletely changed and robotic machines arereplacing human beings, the definition of‘employee ‘ needs to be drastically changed tomake it more rationale and in consonance withdeveloping situations.

By..... H.L. KumarLabour Law Reporter, Delhi

Source: FLR 2017(153)

TIME AND TIDE WAIT FOR NONE


2017-II-LLJ-28 (Ker)

LNIND 2017 KER 1150

IN THE HIGH COURT OF KERALA

Present:

Hon’ble Mr. Chief Justice Mohan M. Shantanagoudar and

Hon’ble Mr. Justice Anil K. Narendran

W.A. No. 118 of 2017 in W.P. (C). 38150 of 2016 19th January, 2017

State Bank of Travancore, Represented By Its General Manager ... Appellant(s)

Versus

K.P. Kiran Kumar ... Respondent (s)

Termination — False Declaration — Respondent was appointed as peon in Appellant bank - Respond-ent was dismissed by Ext.P5 order — Ext.P5 order of termination came to be issued against Re-spondent for concealment and for making false declaration at time of obtaining appointment- SingleJudge set aside Ext.P5 order and directed Bank to pass fresh orders after considering dictum laiddown by Apex Court - Whether Single Judge was right in setting aside termination order - Held, therecannot be dispute that matter needs to be reconsidered by Bank in light of verdict laid down by ApexCourt – Single Judge not justified in quashing Ext.P5 termination order while directing Bank to re-consider matter — Prima facie, it is proved that there is concealment of material fact — No prejudiceor injustice will be caused to either of parties if case is reconsidered by Bank keeping in tact Ext.P5order — in case Bank decides in favour of respondent after hearing consequences of reinstatement ofRespondent would follow- Till such time Respondent cannot be allowed to work as employee - Courtsets aside portion of judgment of Single Judge quashing Ext.P5 order — Ext.P5 order re- mains onrecord - Direction issued to Bank to reconsider matter afresh in light of .judgment of Apex Courtstands confirmed.

ADVOCATE APPEARED

P. Ramakrishnan, SC, State Bank of Travancore for Appellant(s)S..K. Krishnakumar, for Respondent(s)

JUDGMENT

Mr. MOHAN M. SHANTANAGOUDAR, CJ.

The judgment dated 8.12.2016 passed in W.P(C).No. 38150 of 2016 is called in question in thisappeal.

2. The respondent was appointed as a peon inthe appellant bank. However, he was dismissedby Ext.P5 order on the ground that at the time ofapplying for the post, he has suppressed thematerial particulars relating to his involvement

in a criminal case.

3. Thus in effect, Ext.P5 order of termination cameto be issued against the respondent forconcealment and for making false declaration atthe time of obtaining appointment. The learnedSingle Judge, relying upon the judgment of theApex Court in Avtar Singh v. Union of India AIR2016 SC 3598 : (2016) 8 SCC 471. set asideExt.P5 order and directed the Bank to pass freshorders after considering the dictum laid down bythe Apex Court mentioned supra and after hearing

Judicial Verdict

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the respondent.

4. The Apex Court, in the case of Avtar Singh v.Union of India (supra) had occasion to considerthe circumstances under which a false declarationwould be material for the purpose of terminationof services of an employee. In that view of thematter, the learned Single Judge by exercisingjudicial discretion directed the Bank to reconsiderthe matter keeping in mind the observations madeby the Apex Court in the aforementioned judgment.5. There cannot be any dispute that the matterneeds to be reconsidered by the Bank in the lightof the verdict laid down by the Apex Court in AvtarSingh v. Union of India (supra). However, in ourconsidered opinion, the learned Single Judge is notjustified in quashing Ext.P5 termination order whiledirecting the Bank to reconsider the matter, since,prima facie it is proved that there is concealmentof material fact. Hence we propose to set asidethe portion of the judgment passed by the learnedSingle Judge quashing Ext.P5 order.

6. No prejudice or injustice will be caused to eitherof the parties, much less to the respondent if thecase is reconsidered by the Bank keeping in tactExt.P5 order. In case the Bank decides in favourof the respondent after hearing him and afterreconsidering the matter, the consequences ofreinstatement of the respondent would follow. Buttill such time, the respondent cannot be allowedto work as an employee.

Accordingly, we set aside the portion of thejudgment of learned Single Judge quashing Ext.P5order. We make it clear that Ext.P5 order remainson record. However, the direction issued to theBank to reconsider the matter afresh in the lightof the judgment of Apex Court in the case of AvtarSingh v. Union of India (supra) mentioned suprastands continued. Such consideration shall bemade by the Bank on merits, after hearing therespondent, as early as possible but not later thanthe outer limit of One month from the date ofreceipt of a copy of this order.

Ordered accordingly.

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