AIBOC CIRCULAR NO. 126 DATED 2ND SEPTEMBER, 2010

AIBOC issued its circular No. 126 on the agitation of All India Andhra Bank Officers’ Federation against the provocative attitude of the management. We are reproducing the same here for our readers.

CIRCULAR NO:126                                      2^ND SEPTEMBER, 2010

TO ALL AFFILIATES/MEMBERS:

ALL INDIA ANDHRA BANK OFFICERS’ FEDERATION ON AGITATION AGAINST THE PROVOCATIVE ATTITUDE OF THE MANAGEMENT LEADING TO STRAINED INDUSTRIAL RELATIONS ATMOSPHERE IN THE BANK

Our affiliate in Andhra Bank, All India Andhra Bank Officers’ Federation has launched a series of action programmes against the wrongful, arbitrary and provocative actions, including unfair practices in the area of service conditions, violation of bilaterally agreed policies on transfer and placement, non-resolution of long pending issues etc.  The action programmes have not evoked any positive response from the Management.  Our affiliate has resolved to intensify the action programme as follows:

Every Saturday	Lunchtime Demonstrations at all major Centres preceding by Scooter Rallies, Car Rallies, Silent Rallies (One for each Saturday)
Thursday 16.09.2010	Black Badge wearing
Thursday 23.09.2010	One day Dharna at All Zonal Hear Quarters
28th, 29th September & 1st October, 2010	3 days All India Strike

On Saturday, the 4^th September 2010, our affiliates wishes to organise solidarity Actions from AIBOC and AIBEA, by leading delegation to all Zonal Managers at all Zonal Offices spread all over the country. Conducting Lunch – Time demonstrations before Zonal Offices along with Comrades from Andhra Bank.

On Saturday, 18^th September, 2010 a delegation from representatives of AIBOC and AIBEA will meet CMD, Andhra Bank, followed by demonstrations before Head Office.

We request all the State Units of AIBOC and our affiliates to extend fraternal support to all the action programmes by participating in a massive way and make the action programmes of our affiliate in Andhra Bank successful.

With warm greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

NEW ULIP NORMS WILL BOOST CUSTOMER CONFIDENCE: FM

Finance Minister Pranab Mukherjee said the new guidelines for unit-linked insurance products (Ulips) will boost investor confidence and draw more customers to such schemes.

"Irda has come up with a number of regulations and guidelines especially in the area of Ulips. This initiative is in the interest of the policyholder and would help in building confidence of the prospective policyholders in the insurance products," Mukherjee said addressing the global insurance summit here.

The new Irda guidelines which came into effect from 1^ST September have capped various Ulip charges, increased their lock-in period and mandated a minimum return guarantee for pension plans.

Under the new regulation, policyholders would get their money back even if they exit prematurely, as against the present surrender charges of up to 100 per cent of the premium paid.

Currently Ulip products, which are equity linked insurance schemes, account for about 80 per cent of the total premium collected by the 23 private life insurance companies.

Most of the life insurance companies have approached the Insurance Regulatory and Development Authority (Irda) for approval for new Ulip products which comply with the guidelines.

Source: http://www.business-standard.com/india/news/new-ulip-norms-will-boost-customer-confidence-fm/107402/on

GOVT APPOINTS NEW CHIEFS, 12 EXEC DIRECTORS FOR 8 BANKS

The government appointed new chiefs for eight public sector banks, including Canara Bank, Oriental Bank of Commerce and UCO Bank.

The government has also appointed 12 executive directors in various public sector banks.

As per the notification issued by the government, Union Bank of India Executive Director S Raman has been appointed the Chairman of Canara Bank, the fourth largest state-owned bank.

Punjab National Bank Executive Director Nagesh Pydah has been appointed as the Chairman and Managing Director of Delhi -based Oriental Bank of Commerce, while Central Bank of India Executive Director Arun Kaul will head UCO Bank, headquartered in Kolkata.

Furthermore, Bank of India Executive Director M Narendra will take charge of Indian Overseas Bank and Ramnath Pradeep of Central Bank of India becomes the head of Corporation Bank.

A S Bhattacharya, currently the Executive Director of Indian Bank, becomes the Chairman and Managing Director of Bank of Maharashtra, while R Ramachandran of Syndicate Bank will head Hyderabad-based Andhra Bank.

Canara Bank Executive Director H S U Kamath has become the Chairman and Managing Director of Vijaya Bank.

At the same time, as many as 12 general managers have also been promoted to Executive Directors. Among them, A K Bansal, the General Manager of Union Bank of India, has been promoted as an Executive Director of Indian Overseas Bank.

In addition, N Sheshadri, R K Dubey, Ravi Chatterjee, Archana Bhargava, Rakesh Sethi and Rajiv Rishi have been appointed at executive directors of various banks.

Source: http://www.business-standard.com/india/news/govt-appoints-new-chiefs-12-exec-directors-for-8-banks/107414/on

IDBI BANK WAIVES SERVICE CHARGES ON CURRENT AND SAVINGS ACCOUNTS

IDBI Bank has waived all charges on a host of services for its current account and savings bank account (CASA) customers in a bid to grow low-cost deposits, retain customers and attract new ones.

The waivers are for ATM interchange fee and charges related to average balance, cheque book, demand draft, electronic funds transfer, electronic clearing service, account statement and others.

The public sector bank expects this waiver strategy to help boost its low-cost CASA deposit base to around 20 per cent of the total deposits in the next six months, from 13 per cent now.

One of the highlights of the service-charge waiver is that the bank's customers will be able to access ATMs of other banks any number of time without having to pay a fee.

The other charges that have been removed for CASA customers relate to new card fee, new card issue, cash service, pay order, stop payment, account closure, demand draft issue and cancellation, and standing instruction.

Source: http://www.thehindubusinessline.com/2010/09/02/stories/2010090254430100.htm

CENTRAL BANK, WIPRO IN BANKING SOLUTION PACT

Central Bank of India and Wipro have announced a five-year total outsourcing agreement to provide technology-driven, core banking solution for seven sponsored regional rural banks (RRB).

One of them is Uttar Bihar Gramin Bank – the biggest RRB in India with a large presence in Bihar. The deal size is estimated to be about Rs 200 crore.

This engagement comes at time when Central Bank of India is looking to achieve its objective of financial inclusion and bring low-cost and efficient banking services to the rural masses.

The “Centralised Core Banking Project” is expected to facilitate efficient internal operations for the seven regional rural banks. It is also expected to provide the competitive edge by enabling regional rural banks to offer innovative products and services at optimum costs.

Exploring alternatives

The Core Banking project would integrate 2,000 sites, which include branches, extension counters, satellite offices, regional offices, head offices and back-offices in a phased manner.

Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, said, “The rural customer of the RRB will receive superior customer experience from the RRB, and fast efficient systems will enable alignment with the shared business vision of Central Bank of India and the regional rural banks sponsored by the bank.”

Mr Ramnath Pradeep, Executive Director, Central Bank of India, said, “Our vision is geared towards providing a future-proof strategy to transform the RRBs into institutions with sound financials committed to overall economic development of rural areas in terms of care, competence and compassion towards its customers.”

The software has been provided by Infosys Ltd using Finacle along with other standard products.

Mr Anand Sankaran, Senior Vice-President and Business Head, India, Middle East and Africa, Wipro, said: “We plan to deliver extremely robust, scalable and flexible Centralized Core banking Solution aligned with the corporate mission, strategy and business plan of the Regional Rural Banks.”

Source: http://www.thehindubusinessline.com/2010/09/02/stories/2010090252410700.htm

HIGHER PENSION, GRATUITY OUTGO TO HIT BANKS' NET

Banks are worried that higher outgo due to pension and gratuity would dent their profits this year.

CEOs of large commercial banks have, therefore, decided at a closed door meeting to approach the Reserve Bank of India and the Institute of Chartered Accounts of India (ICAI) to relax the accounting norms so that the burden on pension and gratuity liabilities is minimised.

The bank management had estimated pension fund liabilities to be in the region of `6,000 crore after negotiating wages with bank employees. The present pension fund structure is such that banks and employees contribute equally during the service period and in return get a defined pension after retirement.

Banks are now worried that apart from pension liabilities, they also have to provide for a higher gratuity fund — something that they had not factored in earlier. In the last Union budget, the government proposed the amendment of the Gratuity Act, wherein the employee would receive `10 lakh on retirement instead of a cap of `3 lakh. Banks have estimated that the outgo on this would be around `4,000 crore.

In 2002, when PSU banks had gone for voluntary retirement schemes, RBI had allowed banks to amortise the liabilities for five years, wherein the bank deducts one-fifth of the payment above the line for the next five years.

If banks do not receive any relaxation, profits will dip and reserves will shrink. A lower reserves will mean that banks’ capital adequacy ratio (which includes reserves, equity and senior debt) will also fall significantly. RBI mandates that banks maintain a capital adequacy ratio of 9% and most banks current have a CAR in the region of 11-14%.

Some banks say under the current frame work — accounting standard — 15 (AS-15) banks cannot amortise pension and gratuity liabilities but at the same time AS-15 provides for ‘corridor approach’ wherein RBI could provide a special dispensation on relaxing the rules.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Higher-pension-gratuity-outgo-to-hit-banks-net/articleshow/6471742.cms

EDUCATION LOAN DEFAULTS RISING

Education loans, a segment with lowest defaults among all other retail loans so far, have seen a sudden spurt in NPAs (non-performing assets) due to the shrinking job markets following the global economic meltdown.

The defaults have been higher in loans below Rs 4 lakh, which are given without any collateral, according to senior bank officials.

Indian Bank, for instance, has bad loans worth Rs 80 crore on its books as on June 30, 2010, according to its Chairman and Managing Director, Mr T.M. Bhasin. “We have witnessed some loans in the below Rs 4 lakh category going bad recently. We are tracking the students and trying to work out the recovery methods. The rise in delinquency is due to the lack of proper placements on completion of the course,” Mr Bhasin told Business Line.

The bank's education loan outstanding was at Rs 2,700 crore as on June 30. The bank plans to extend the tenure of loan to help the students repay the amount.

“We are planning one-year relaxation in order to give some breathing space to the students,” he said. Banks are also encouraging students to look at alternative job options such as BPOs in order to help them repay the loan on time.

“Though no cases of NPAs have been reported as yet, there is a cause for concern as in some cases it is difficult to track the students. But banks are taking a cautious approach,” said Mr K.R. Kamath, Chairman and Managing Director, Punjab National Bank.

The defaults have been higher for loans given for courses in B-grade engineering or management colleges as these do not guarantee assured placements, said a senior official at a public sector bank.

Source: http://www.thehindubusinessline.com/2010/09/01/stories/2010090152030100.htm

STATE BANK FAMILY UNION MAY GET DELAYED

The merger of State Bank of India’s remaining five associate banks may get delayed as the government is keen that the amalgamation takes place in a staggered manner. The finance ministry is also likely to seek from the State Bank of India details on the cost of merging the remaining associates.

After the State Bank of Indore’s merger with SBI became effective, SBI chairman OP Bhatt had said the bank will soon discuss with the government on the process of merging other associate banks. 
Out of the five associate banks, SBBJ, State Bank of Mysore and State Bank of Travancore are listed. The unlisted ones are State Bank of Patiala and State Bank of Hyderabad.

According to a senior SBI official, there would be no delay in the amalgamation of State Bank of Patiala or Hyderabad, and the government in-principle agrees with SBI’s consolidation move.

SBI had earlier submitted a proposal indicating that it would need around Rs 39,000 crore for the next three financial years for the purpose of expansion and mergers, if any.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/State-Bank-family-union-may-get-delayed/articleshow/6465332.cms

MRS. VIJAYLAKSHMI R. IYER AND MR. RAJIV KISHORE DUBEY TAKE OVER AS NEW EXECUTIVE DIRECTORS OF CENTRAL BANK OF INDIA

Mrs. Vijayalakshmi R. Iyer has taken charge as Executive Director of Central Bank of India, one of the largest Nationalised Banks of the country with effect from 1st Sept. 2010. Mrs. Iyer is a Post Graduate in Commerce with CAIIB. Mrs. Iyer was General Manager, Union Bank of India holding charge of Credit Department. Prior to the same, she was handling Risk Management Department and Department of Information Technology. She has to her credit 34 years of service with 12 years of experience of Branch Banking, 15 years in Credit Department and the remaining 7 years in Risk Management Department/Information Technology.

Shri Rajiv Kishore Dubey has taken charge as Executive Director of Central Bank of India, one of the largest Nationalised Banks of the country with effect from 1st Sept. 2010. Shri Dubey was General Manager of Punjab National Bank, holding charge of Marketing Division and is a regular invitee as guest speaker in various management institutions. Shri Dubey is MBA and he joined as Probationary Officer in Punjab National Bank in 1977. He has been a field Banker throughout his life in various capacities of the Bank and has worked in different parts of the country.

Source: https://www.centralbankofindia.co.in/upload/news/Press_Editors_Press_Release_ED2.pdf

CBOA, AP WELCOMES THE NEWLY APPOINTED EXECUTIVE DIRECTORS OF OUR BANK

Mrs. V.R. Iyer, General Manager, Union Bank of India has been appointed as Executive Director of Central Bank of India.

Mr. R.K. Dubey, General Manager, Punjab National Bank has been appointed as Executive Director of Central Bank of India.

CBOA, AP congratulates and extends warm welcome to them during this Pre-centenary year of the bank.