AIBOC CIRCULAR NO. 107 DATED 27.07.2010

AIBOC issued its circular No. 107 on extending salary revision to Officers in Regional Rural Banks. We are reproducing the same here for our readers.

CIRCULAR NO: 107                                                       DATE: 27.07.2010

TO ALL AFFILIATES/MEMBERS:

SALARY REVISION EXTENDED TO OFFICERS IN REGIONAL RURAL BANKS - YET ANOTHER FEATHER IN THE CAP OF THE CONFEDERATION - THE REVISION IS EFFECTIVE FROM 1.11.2007

Congratulations to our members in the Regional Rural Banks.  We could ensure the salary revision almost simultaneously to our members in the Regional Rural Banks. It is just within 3 months of our signing the final agreement on the 9^th bipartite that the issue of extension of the benefit of the agreement to our comrades in the Regional Rural Bank could be sorted out without much difficulty. Our members may recollect that immediately on the conclusion of the 9^th Bipartite Agreement, the leadership of the Confederation took the initiative and kept in touch with the Banking Department, Ministry of Finance, Government of India that there should not be inordinate delay as regards the extension of  benefits of the 9^th Bipartite Settlement to our members in the Regional Rural Banks.  The Confederation also raised the issue in the follow-up meetings with the officials of the Banking Department and also approached the Honourable Minister of Finance seeking his intervention in the matter.  Our efforts yielded results at the earliest possible.

The consolidation of the RRB Officers under the banner of the Confederation in order to ensure equal pay for equal work is now part of the history.  It was our effective deposition before Justice Obal Reddy, the National Industrial Tribunal set up for the examination of the service conditions of the Officers’ fraternity in the Regional Rural Banks and to examine the demand of the Confederation for extending the same service conditions to them as available to the officers in the sponsor banks.  It was a long journey and ultimately, the Confederation could make effective presentation about the responsibilities of the Field workers and several other categories who were functioning as officers in the supervisory cadre in the commercial banks and get them a fair deal.  Since then it is a long journey.  We have been successful in consolidation of the Officers in the Regional Rural Banks through the co-operation of all the affiliates of the Confederation as well as the RRB Federation set up exclusively for pursuing the enrolment of the officers.

The Ministry of Finance taking cue from our persistent follow-up and initiative in mobilizing the opinion for early extension, took steps for the completion of the formalities connected with the clearance of the proposal for implementation.  It is also heartening to note that the Honourable Finance Minister himself intervened in the matter and took the opportunity of announcing the extension of these benefits in the Meeting of the Review Conference held on 25.07.2010 at New Delhi, where all the Chairmen of the Regional Rural Banks were present on the occasion.  He announced that the major issue of the salary revision as agreed under the 9^th Bipartite Settlement between the Confederation and the Indian Banks’ Association is now being extended to the Regional Rural Banks as well.  We also understand that the Govt. has cleared the Promotion Policy from MMG Scale III and above during the same meeting.

The Banking Department was quick in responding to the concern shown by the Finance Minister in response to our appeal for early settlement and issued a detailed notification communicating to all the banks, with necessary instructions for implementation of the 9^th Bipartite Settlement.  Our members may recall that during the 8^th Bipartite it was a long drawn negotiation, between the leadership of the Confederation and the officials of NABARD before the implementation took place.  The NABARD also wanted to bring several conditions for its implementation and it was the leadership of the Confederation which stoutly opposed those initiatives including the payment of arrears in instalments etc.. It is in this background, the Government has issued instructions to all the sponsor Banks to implement the Salary Revision agreement as settled under 9^th Bipartite and  to make necessary arrangements for payment of arrears to the officers in one instalment.

As per the Notification issued by the Government of India, the implementation will take place as under:-

Ø      Pay Scales and Dearness Allowance:- Pay scales and Dearness Allowances of RRB employees as on 01.11.2007 would be equal to the corresponding categories of employees of the nationalised commercial banks.  Pay for the purpose of DA, HRA and Superannuation benefits shall mean basic pay, stagnation increments, special pay, graduation pay, professional qualification pay and officiating pay, if any.

Ø      House Rent Allowance (HRA) and City Compensatory Allowance (CCA): HRA and CCA would be payable at the same rate as applicable to the corresponding categories of employees in the nationalised commercial banks w.e.f. 01.11.2007.

Ø      The sponsor bank shall negotiate the ‘other allowances’ with RRBs sponsored by them.

Ø      The payment of revised salary and the arrears thereof may be made accordingly.

The RRBs may issue a comprehensive order indicating the revised pay scale in respect of each category of employees after seeking the approval of their Board of Directors.

While, we are not in agreement with the freedom given to the sponsor banks and the unions to negotiate on the other allowances etc., which may lead to unnecessary discriminations between one RRB to another, we are taking up the matter immediately with the Government.  In the meanwhile, all our affiliates are requested to kindly ensure that the instructions regarding the implementation of Salary Revision as advised by the Government takes place in good time and our colleagues in RRBs get their arrears without further delay.

Comrades, we wish to assure our comrades in the Regional Rural Banks that our attempts to achieve total parity will continue without any let up.  While complimenting our members in RRBs for the success we have achieved as regards the salary revision, we would urge upon them to be in readiness for any action at short notice if need be.

All our affiliates/state units are requested to await further developments in the matter.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

BANKS GET MORE TIME

The Reserve Bank of India has given banks more time to meet its stipulations on their capital market exposures. The deadline has been extended from July 31 to September 30.

Source: http://www.thehindubusinessline.com/2010/07/31/stories/2010073151660600.htm

SYNDICATE BANK Q1 NET UP AT RS 265 CR

Syndicate Bank has achieved a net profit of Rs 265.36 crore for the first quarter ended June 30, 2010 compared with Rs 261.56 crore for the quarter ended June 30, 2009.

During the quarter under review, the bank’s total income stood at Rs 2,819.73 crore against Rs 2,974.86 crore in the corresponding quarter last fiscal.

On a consolidated basis, the Group has posted a net profit of Rs 265.45 crore during the quarter ended June 30, 2010 against Rs 261.8 crore during the quarter ended June 30, 2009.

Total income has decreased from Rs 2,974.86 crore to Rs 2,819.74 crore.

Source: http://www.thehindubusinessline.com/businessline/blnus/17311401.htm

BANK OF INDIA NET JUMPS 24%

Bank of India has announced earned a net profit of Rs 725.13 crore for the first quarter ended June 30, 2010 compared with Rs 584.32 crore for the quarter ended June 30, 2009.

According to announcement, the total income has increased from Rs 5,023.61 crore in the June quarter previous fiscal to Rs 5,407.62 crore in the corresponding quarter this fiscal.

Source: http://www.thehindubusinessline.com/businessline/blnus/17311301.htm

PNB RAISES LENDING RATES BY 75 BPS, OTHERS MAY FOLLOW SUIT

Within days of the Reserve Bank increasing short-term policy rates, Punjab National Bank (PNB) announced raising its prime lending rates by 75 basis points to 11.75 per cent, making loans to its existing borrowers dearer.

Other lenders, both in the private and the public sectors, are expected to quickly follow the steps of PNB, which is the first bank to raise lending rates after RBI increased short-term lending and borrowing rates by monetary policy review on July 27.

The public sector lender also announced increasing interest rates on term deposit rates by up to 75 basis points for various maturities.

The bank added that the current increase in BPLR would not adversely impact the customer interest as the new customers will come under the base rate system. Existing borrowers also have an option of switching over to the base rate, which makes the impact of hike in BPLR minimal. 

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/PNB-raises-lending-rates-by-75-bps-others-may-follow-suit/articleshow/6239217.cms

BANKS GET RS 4868 CR FOR CROP LOAN

The government decided to release Rs 4,868 crore to state-owned banks for providing short-term crop loans to farmers at a concession of up to 4% to lending rates.

The decision, taken at a Cabinet meeting chaired by the Prime Minister Manmohan Singh, is aimed at bringing more farmers under the net of institutional credit and raising farm productivity.

The banks provide farm loans of up to Rs 3 lakh at 5-7% interest per annum and the government gives 2-4% subsidy to these banks and NABARD.

Farmers take short term loans to buy seeds at the beginning of the crop cycle and are usually payable within a year. Those farmers who pay back loans within 12 month are eligible for 4% subsidy, while others get 2% subsidy.

The government has since 2006-07 been subsidising short term crop loans. While farmers have been getting loans at a concession of two per cent in lending rates, those repaying their bank debts get 1.0% additional discount from last fiscal. This year, the amount of concession has been increased to 4.0% by the government.

For 2010-11, the target for agricultural credit flow has been raised to Rs 3,75,000 crore from Rs 3,25,000 crore in 2009-10.

Source: http://economictimes.indiatimes.com/news/economy/finance/Banks-get-Rs-4868-cr-for-crop-loan/articleshow/6239059.cms

UNION BANK RAISES BPLR TO 12.25%

Union Bank raises BPLR (benchmark prime lending rate) by 50 basis points (bps) to 12.25% w.e.f. August 4.

The Bank ups Deposit rates by 25-100  bps

Source: http://www.business-standard.com/india/news/newsalert-union-bank-raises-bplr-to-1225/103485/on

MORE BANKS ENTER DEPOSIT RATE BATTLE

The battle for deposits looks set to intensify with Bank of Baroda, Kotak Mahindra and Syndicate Bank increasing interest rates on fixed deposits.

A number of other banks such as Bank of India, Axis Bank and Union Bank of India are likely to increase deposit rates in the coming days.

Bank of Baroda would offer 25-50 basis points (bps) more on fixed deposits (FDs) across maturities above 90 days from August 2.

Kotak Mahindra Bank today said it had increased deposit rates by 25-50 bps across nine maturities ranging from 15-30 days to 701 days and above but less than two years.

Syndicate Bank has raised deposit rates by 50-75 bps across various maturities.

The latest round follows an increase in rates by HDFC Bank, Central Bank of India and Lakshmi Vilas Bank earlier this week.

Bank of India Executive Director M Narendra said the bank was likely to increase deposit rates by 25-50 bps in the near future. And, earlier, State Bank Chairman O P Bhatt indicated the bank might look at revising its deposit rates by August-September.

While deposit rates are rising, most bankers are of the opinion that lending rates will follow with a lag. However, some like HDFC Bank said they might raise lending rates sooner.

The pace of deposit growth for the banking system has been slower than credit growth since the beginning of the current financial year and is beginning to worry bankers.

Source: http://www.business-standard.com/india/news/more-banks-enter-deposit-rate-battle/403050/

RBI IMPOSES PENALTY ON STANCHART, ICICI BANK

RBI has imposed a penalty of 500,000 rupees each on Standard Chartered Bank and ICICI Bank.

The penalty on Standard Chartered was imposed for not furnishing within the stipulated time information on a foreign currency loan facility arranged by the bank to an offshore special purpose vehicle.

ICICI Bank was penalised for violation of guidelines on know your customer and money laundering standards issued by the central bank.

Source: http://economictimes.indiatimes.com/news/economy/policy/RBI-imposes-penalty-on-Stanchart-ICICI-Bank/articleshow/6238058.cms

ALLAHABAD BANK HIKES DEPOSIT RATES BY UP TO 125 BPS

Allahabad Bank has announced 25-125 basis points hike in domestic term deposit rates in different time buckets following the hike in key lending and borrowing rates by the Reserve Bank of India.

The increase in rates for term deposits below Rs 1 crore would be effective August 2, while that for term deposits of Rs 1 crore-to-less than Rs 10 crore and for Rs 10 crore and above would be effective July 29, according to a press statement issued by the bank.

For term deposits below Rs 1 crore, the revised rates for various time buckets would be as follows: 91 days-to-179 days at 5.5 per cent (5 per cent), 180 days-to-269 days remains unchanged at 5.5 per cent, 270 days-to-364 days at 6 per cent (5.5 per cent), one year-to-less than two years at 6.75 per cent (6.5 per cent).

For term deposits of Rs 1 crore-to-less than Rs 10 crore and for Rs 10 crore and above, the revised rates across various time buckets would be as follows: 91 days-to-179 days at 5.75 per cent (4.5 per cent), 180 days-to-269 days at 6.25 per cent (5.5 per cent), 270 days-to-364 days at 6.5 per cent (5.5 per cent) and for one year-to-less than two years at 7 per cent (6 per cent).

The existing additional interest rate of 50 basis points for senior citizens would continue as per the existing guidelines, the release said.

Source: http://www.blonnet.com/2010/07/30/stories/2010073053610700.htm