Sunday, March 19, 2017

Govt asks 10 banks to cut staff benefits for capital

FinMin wants banks to get commitment from trade unions

Business Standard19 Mar 2017ANUP ROY & ABHIJIT LELE

The government has asked 10 public sector banks (PSBs) to curtail employee benefits, including industry-standard pay hikes, if these want to receive any capital.

The Centre wants these banks to sign a memorandum of understanding (MoU) with the employees’ unions to get a commitment on this. If the unions agree, benefits such as leave travel concessions and perks could go for a few years till the banks returned to health.

All three Kolkata-based banks — United Bank of India, UCO Bank and Allahabad Bank — have got this diktat. The letter has also gone to Indian Overseas Bank, Vijaya Bank, Bank of India, Central Bank of India, Andhra Bank, Bank of Maharashtra and Dena Bank, sources said.

These banks had asked for capital from the government, some as little as ~500 crore. But the government is acting tough, as these have a huge bad-asset problem and their profits are dwindling.

According to sources, a letter, which the finance ministry has written to the banks, said capital allocation would be linked with measurable quarterly milestones on which all related parties — banks’ board of directors, management and employees — must commit.

Support in the form of capital would require a tripartite MoU between the government, the PSB concerned and its employees. The MoU would be a commitment to an agreement for a time-bound plan, starting with the financial year 201718. It would be monitored quarterly.

Temporary restructuring of employee benefits would be done only based on need. Any reduction or suspension in benefits could be reversed if the bank concerned successfully managed turnaround operations, said sources.

Senior bankers in some of these institutions confirmed they had received such a letter. A senior executive of a bank said the purpose of the proposed MoU was to have employees on board. “This is a commitment and not a legal provision to put blame on and basis for action against employees,” he added.

Sources said SBI Capital Markets, the investment banking arm of the State Bank of India (SBI), has been asked to advise on the terms of the MoU.

According to a senior union leader, they would explore the option of going on strikes if they were not satisfied with the terms of the MoU.

C H Venkatachalam, general secretary, All India Bank Employees’ Association, said employees were ready to cooperate for the effective turnaround of banks. However, unions and employees would not tolerate a vendetta or harassment. Banks have to be empowered to ensure effective recovery from defaulters, especially corporate borrowers, through legal means.

“The government wants the banks to sign the MoU with the unions to restrict economic benefits of employees. This is probably the government’s way of saying the employees of these banks deserve to be punished,” said a source.

Bank unions might find hurdles to their agitation plans. The P J Nayak committee has already suggested privatisation of PSBs. Union Finance Minister Arun Jaitley has expressed a desire to start privatisation with IDBI Bank. Besides, the government in July 2016 said it would capitalise only 13 banks, out of the 19 it owned, based on performance.

Bank unions were in a spot after the government gave a go-ahead to SBI to merge with its associate banks.

Such an MoU was not unprecedented. In 1998-99, the M S Verma committee report had suggested that banks with a return-on-asset ratio of less than one should be liquidated. Affected banks — Indian Overseas Bank, United Bank of India and Indian Bank — had to sign such an agreement with the unions. These banks had returned to health in three years. Then finance minister P Chidambaram used to preside over the board meetings of these banks and employee benefits were significantly curtailed.

The government is trying the same trick this time and the unions might have to oblige to save the banks from privatisation, sources said.

Saturday, February 25, 2017

If this happens Bank Employees will also get  this benefit.

Gratuity payment ceiling to double to Rs20 lakh

New Delhi: The central government Thursday agreed to allow millions of organised sector employees to withdraw up to Rs20 lakh from their gratuity corpus, double the amount permitted now.

Currently, even if a worker accumulates more than Rs10 lakh as gratuity contribution, he or she is allowed to withdraw only Rs10 lakh.

The agreement came following a meeting between the labour ministry and representatives from states, employees and employers on Thursday.

“All the stakeholders—states, Centre, unions and the industry representatives were on the same page to enhance the gratuity ceiling from Rs10 lakh to Rs20 lakh,” a labour ministry spokesperson said after the meeting.

This follows the 7th Pay Commission report allowing government employees to withdraw up to Rs 20 lakh gratuity, which left out a significantly bigger number of private sector employees. The labour ministry will now bring a formal amendment to the Payment of Gratuity Act to implement the change.

All companies and establishments deploying 10 or more workers comes under the Gratuity Act. Gratuity is calculated as: Last drawn salary × 15/26 × number of years of service. Salary means basic pay plus dearness allowance; 15/26 means 15 working days’ pay of the 26 days of pay.

“It was logical that we extend the ceiling to Rs20 lakh and the labour ministry did not have any objection today,” said Virjesh Upadhyay, general secretary of the Bharatiya Mazdoor Sangh, a trade union affiliated to the Bharatiya Janata Party.

D.L. Sachdeva, national secretary of the All India Trade Union Congress (AITUC) who attended the meeting, said that besides the ceiling hike, labour minister Bandaru Dattatreya agreed to “consider reducing the five years’ gratuity payment rule”.

  Currently, an employee with at least five years of continuous service is eligible to get gratuity, which forms part of the overall salary package of an employee, but not paid monthly.

Thursday, February 2, 2017

Tall claims !!
Income Tax slab rate reduced from
10% to 5% , For income upto Rs.500000!
Tax payer will be benefited by Rs.12500!

Is it true?

But, media / news papers does not highlight one change.
Yes, Tax rebate of Rs.5000 for income upto Rs.500000 available till last year is changed.
Now it is reduced to Rs.2500 and that too upto income of Rs.350000.

Giving benefit by one hand and take away the existing benefit by the other hand!
What an ideaji?

Pl. Read the examples compiled by me .
Those who are under income of Rs. 500000 are not benefited anything.

But, those who are having income of above Rs.500000 are fully benefitted by

This Government is for whom?

Tuesday, January 31, 2017

DA payable to employees for the Quarter Feb. to April 2017 shall be 469 slabs i.e. a decrease of 9 slabs from the current level .

For Pensioners :
Increase of 14 slabs.