AIBOC CIRCULAR NO. 28 DATED 18.03.2011

AIBOC issued its circular No. 28 dated 18.03.2011 on nomination of officer-employee director on the board of public sector banks. We are reproducing the same here for our readers.

CIRCULAR NO.28                                       DATE: 18.03.2011

TO ALL AFFILIATES /MEMBERS:

NOMINATION OF OFFICER-EMPLOYEE DIRECTOR ON THE BOARD OF PUBLIC SECTOR BANKS

Members are aware that, under the Participative Management, Principal Office Bearers of the recognized majority Associations are considered by the Government of India, for nomination on the Boards of the Public Sector Banks as Officer Employee Director for a period of three years. Ever since the scheme is in operation, there is no consistency in the guidelines for such nominations. The Confederation had challenged some of the questionable guidelines in the Hon’ble Supreme Court during 1985 and certain uniformity was brought in the scheme.

Of late, we have come across a number of unilateral changes being prescribed at the Government level, thereby, either delaying or denying the facility to the representatives of the recognised Associations. We have come across another court verdict on the questionable notification, the details of which are as under:

Sub Clause (2) of Section 9 of the Nationalised Banks (Management & Miscellaneous Provisions) Scheme 1990, reads as:

“Subject to the provision of sub-clause (1), a director referred to in Clause (e), Cl. (f), Cl.(g), Cl.(h) of sub-section (3) of Sec.9 of the Act shall hold office for such term not exceeding three years as the Central Government may specify at the time of his nomination and thereafter until his successor has been nominated and shall be eligible for re-nomination.

Provided that no such director shall hold office continuously for a period exceeding six years”.

By virtue of above clause, term of office of the Director shall continue till his successor has been nominated or re-nominated.

The said notification was amended by the Government of India on 20.01.2000, deleting the provisions of continuation of the Director, until his successor is nominated or re-nominated.

Further, vide notification dated 02.03.2011, the said clause of continuation of Director until his successor is nominated or re-nominated was restored.

Again, vide notification dated 19.02.2007 said clause was deleted and once again vide notification dated 08.03.2007, the said clause was restored.

On 15.09.2009, the said clause was deleted and accordingly the Director need not continue till his successor was nominated or re-nominated.

Aggrieved by the inconsistency in the notifications, and inordinate delay in nomination process, the said notification dated 15th September 2009, was challenged by Officers Association in Bank of Maharashtra in the High Court of Judicature at Bombay, Nagpur Bench, through writ petition No. 197 of 2011, the Bank of Maharashtra Officers’ Association Vs The Union of India and others. The Hon’ble High Court, on 09.03.2011, after hearing the learned Assistant Solicitor General, in view of the above inconsistent action, stayed deletion of clause (2) of Section 9, vide notification dated 15th September 2009, till such time the successor of the Director under clause (1) of sub-section (3) of section 9 is nominated or re-nominated or until further order whichever is earlier. The order is restricted to the present petitioner.

We congratulate the petitioners for securing relief from the Court of Law. Our affiliates to take note of the verdict and seek similar remedy wherever it is necessary. However, Confederation will file a comprehensive writ petition in the appropriate Court of Law, challenging the inconsistency and unwarranted restrictions in the scheme brought, through various notifications by the Government of India.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY