AIBOC CIRCULAR NO. 20 DATED 26.02.2010

AIBOC issued its circular No. 20 on Officers' Representation on the Boards of the Banks. We are reproducing the same here for our readers.

CIRCULAR NO.20       26.02.2010

TO ALL AFFILIATES/MEMBERS:

PARTICIPATIVE MANAGEMENT

OFFICERS’ REPRESENTATION ON THE BOARDS OF THE BANKS

One of the salutary schemes of the Industrial Democracy enunciated by the Government of India and the Constitutional Provision is the workers’ participation in the Management. The Government of India took a series of measures to educate the labour leaders and to enlighten them about the various social security provisions introduced by the Government with particular reference to the working class of our country.  The Government consciously allowed the development of Trade Unions, so that a representative forum is available to the labour class in our country. The freedom struggle was also a struggle for emancipation of working class. The Social reformers who were responsible for advocating the welfare of the working class in the early century also took an active part in the freedom struggle. For them, the freedom was meaningless, unless it frees the working class from the clutches of capitalists and the exploiters who were bent upon taking advantage of the cheap labour available in this country for producing finished products and send it abroad for huge profits. The exploitation was a common factor in the British regime. When the country became free, the working class received all the attention and special efforts were made to provide social security to the working class, coupled with several schemes to enable the workers to represent their grievances. The labour had to be provided with a democratic right in order to see that the fruits of freedom reach them. Thus, the representative character was introduced in the Boards of the Public Sector Banks as well.

The trade union movement in the Banking Industry was a formidable one and was capable of handling the representative roles in the Boards – when the government of India considered the introduction of Participative Management which provided several forums for the workers in the country to take a role in the decision making of the Management.  The quality circle, the shop and floor level committees which included the representatives of the workers as well were the initial initiative of the Government to allow the spirit of industrial democracy to blossom in the country.  The final tribute to this effort was the representative character to the Trade Unions in the Boards of the various Public Sector Banks.  The Banking Industry had a highly motivated trade unions and led by the legendary trade union leaders who were considered more than a match to any other representatives in the Board to represent the interests of the constituency which they look after.  Thus the scheme for the nomination of the workmen as well as non-workmen directors on the Boards of the Public Sector Banks came to stay.  This is one of the salutary provisions helping the workers to take part in the management of the respective organization as well.

The objective of the scheme is loud and clear.  It is to allow the representatives of the majority unions to represent the workers/officers on the Board.  The spirit of the scheme was that the unions will forward a panel of names with a priority for the purpose of completing the process of scrutiny and also nomination by the Government of India in consultation with the Reserve Bank of India.  The panel should consist of 3 names of the Principal Office-Bearers of the recognized majority union and has to be forwarded to the Government by the respective banks.  There are certain guidelines for the purpose of scrutiny of the panel submitted by the majority union.

In course of the last couple of years, the Government is exceeding its brief in the matter of nomination of directors in respect of the Officers’ fraternity which is against the spirit of the scheme.  The affiliates of the Confederation have been representing to the Government through their respective managements that the list submitted by them and as also the order in which they are submitted should be considered and the Government should not dilute the panel submitted by them.  We have received reports from the various affiliates wherein for flimsy reasons the Government has turned down the panel and have sought fresh names for the purpose of scrutiny of the panel. There are also instances where the Government has changed the priority for no valid reason and have thus created a lot of organizational embarrassment to our affiliates in several banks.

The other strong negative aspect is certain amendments that were brought to the scheme in the recent past.  The earlier provision in the act provided for the continuity of the sitting director until the next person is nominated or for further period of 3 years whichever is earlier.  The Government removed this provision and thus created a vacuum in several banks when the three year period was over by removing all such directors unilaterally.  As a result, a number of Boards do not have our representatives and there is inordinate delay in filling the vacancy.

The Executive Committee of All India Bank Officers’ Confederation met at Panjim:Goa on 17^th February, 2010 had an occasion to deliberate on the issue at length.  The members were very much concerned to note that due to the inordinate delay in clearing the names for the purpose of nomination of officer directors on the Boards of the Banks, the representation in the Boards of Various Banks have fallen vacant.  The Confederation is a majority organization in almost all the banks excepting four banks and the Government has a responsibility to ensure that these vacancies are filled in good time.  The total representation for the Confederation is around 22 whereas our representatives are available only in 9 banks and the remaining 13 banks have kept vacant officers directors posts for no valid reasons.  The panels submitted from several banks on the recommendations of our affiliates are being changed or rejected for certain frivolous reasons, such as less than 3 years residual service etc.

Hence, the members were of the unanimous view that the issue will have to be taken up with the government on priority basis.  The committee also adopted the following resolution to this effect:-   

Resolution :-

PARTICIPATIVE MANAGEMENT - NOMINATION OF OFFICER DIRECTOR ON THE BOARDS OF THE BANKS

The Executive Committee of the All India Bank officers’ Confederation which met at Panjim:Goa on 17^th and 18^th February 2010 had an occasion to deliberate on the various issues connected with the nomination of the Officer Director on the Boards of the banks.  The committee noted with concern that the Government has unilaterally made certain changes in the existing scheme for the nominee director thereby removing all the directors who had completed their term although they were permitted to continue until the next person is appointed as per the earlier provision in the act.  This has created a big vaccum.  The members were also concerned to note that the panels submitted by the affiliates are being unnecessarily diluted and the affiliates have been advised to submit fresh panel for no valid reason against the spirit of the act.  The act of the Government goes against the spirit of the statute and needs to be rectified.

The members of the committee therefore urge upon the Government to review the position and take necessary steps to nominate the directors on the boards wherever the vacancy remains unfilled and allow the scheme of participative management to be effectively implemented in all the banks in the interest of the industrial peace in the banking industry.

The resolution was moved by Com.A.K.Motayed, Jt.General Secretary

The resolution was seconded by Com.D.N.Prakash Jt.General Secretary

The resolution was adopted unanimously.

Comrades, we will be taking up the matter with the Government for appropriate relief in the matter.  All our affiliates/members are requested to await further developments in the matter.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No.1410/54/10              26.01.2010

To,

Sri. Pranab Kumar Mukherjee

Hon’ble Finance Minister,

Government of India,

South Block,

Parliament House,

New Delhi.

Dear Sir,

PARTICIPATIVE MANAGEMENT - OFFICERS’ REPRESENTATION ON THE BOARDS OF THE BANKS

The Government has introduced a scheme for the purpose of encouraging participation of the representatives of the Officers in the Banks’ Boards in pursuance of their philosophy of industrial democracy and Participative Management as provided in the Constitution of India.  In order to ensure that a true representative of the Officers’ fraternity is nominated on the Board, the Government will be seeking the panel of names from the Majority organisations in terms of the guidelines issued for the purpose. The Confederation being the largest organization in the Banking Industry representing the Officers in almost all banks had the privilege of having their nominees on the Bank Boards for the last several years. As per the scheme, the affiliates of the Confederation were submitting a panel of 3 names suggesting the order of priority for the purpose of appointment.  The Government invariably responds to the panel suggested by the affiliates of the Confederation.  However, we have been witnessing certain deviations and ambiguities in the implementation of the scheme in the recent past.  Some of them are glaring and need to be corrected immediately in the light of the spirit under which the scheme is formulated.

The major one is the restrictions in regard to the continuity of the Director until the new person is appointed on the board to ensure the participation of the representatives of the Officers’ fraternity on the Board which was available earlier.  Recently, the Government has unilaterally altered this proviso and has relieved all the Directors who had completed their term as per the notification and did not allow the continuity in the Board. There are instances where the appointment is unduly delayed since the Government is returning the panel suggested by the Officers’ organizations on certain frivolous grounds. An extraneous condition of minimum of 3 years residual service is also insisted, thereby avoiding nomination of principle office bearers on the Boards.

The guidelines are subject to the bureaucratic intervention.  There used to be consultation process in case of any changes that are required to be made to the guidelines. Since, the guidelines as well as the recent amendment to the act is hurting the very spirit of the scheme, the Executive Committee of the All India Bank Officers’ Confederation which met recently at Panjim:Goa deliberated the issue at length and adopted a resolution seeking your intervention in the matter. We forward the same for your favorable consideration.

Please treat the matter as urgent.

Thanking you sir,

Yours faithfully,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY