AIBOC CIRCULAR NO. 45 DATED 01.05.2012

AIBOC issued its circular No. 45 dated 01.05.2012 on DA payable from 01.05.2012.

We are placing the same here for our readers.

CIRCULAR NO.45                                                    01-05-2012

TO ALL AFFILIATES/MEMBERS

DEARNESS ALLOWANCE

The Index Numbers for the quarter ended  March 2012  are as under:

Month                          Index as per           Conversion              Index as per

                                      2001 series                            Factor                 1960 series

Jan 2012                               198                 4.63 x 4.93                    4519.52                  

Feb 2012                               199                 4.63 x 4.93                    4542.35

March 2012                           201                 4.63 x 4.93                    4588.00

                                                                        Total                          13649.87

                                                Average =           13649.87/3               4549.96

           

Difference in excess of 2836 points                                                 1713.96

D.A. paid for the previous quarter on (i.e. 420x4)                               1680.00

Difference                                                                                                33.96

Increase in number of Slabs =          33.95/4       =                               8.49                                   

Accordingly, Dearness Allowance is payable to Officers on 428 (i.e. 420+8) slabs with effect from 01-05-2012 as against 420 slabs for the previous quarter.The rates of Dearness Allowance at various stages of basic pay are furnished overleaf. The rates worked out are as per the industry level scales upto Scale VII including SBI.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

D.A. PAYABLE FROM I ST MAY 2012 TO  30TH  JULYL  2012
	RATE OF D.A. 0.15% PER SLAB (428 X 0.15= 64.20%)
	STAGES	BASIC	CONVERSION	EXISITING-DA	REVISED-DA	DIFFERENCE
		PAY	FACTOR	420	428	DA
	1	14500	21.750	9135.00	9309.00	174.00
	2	15100	22.650	9513.00	9694.20	181.20
	3	15700	23.550	9891.00	10079.40	188.40
	4	16300	24.450	10269.00	10464.60	195.60
	5	16900	25.350	10647.00	10849.80	202.80
	6	17500	26.250	11025.00	11235.00	210.00
	7	18100	27.150	11403.00	11620.20	217.20
	8	18700	28.050	11781.00	12005.40	224.40
	9	19400	29.100	12222.00	12454.80	232.80
	10	20100	30.150	12663.00	12904.20	241.20
	11	20900	31.350	13167.00	13417.80	250.80
	12	21700	32.550	13671.00	13931.40	260.40
	13	22500	33.750	14175.00	14445.00	270.00
	14	23300	34.950	14679.00	14958.60	279.60
	15	24100	36.150	15183.00	15472.20	289.20
	16	24900	37.350	15687.00	15985.80	298.80
	17	25700	38.550	16191.00	16499.40	308.40
	18	26500	39.750	16695.00	17013.00	318.00
	19	27300	40.950	17199.00	17526.60	327.60
	20	28100	42.150	17703.00	18040.20	337.20
	21	28900	43.350	18207.00	18553.80	346.80
	22	29700	44.550	18711.00	19067.40	356.40
	23	30600	45.900	19278.00	19645.20	367.20
	24	31500	47.250	19845.00	20223.00	378.00
	25	32400	48.600	20412.00	20800.80	388.80
	26	33300	49.950	20979.00	21378.60	399.60
	27	34200	51.300	21546.00	21956.40	410.40
	28	35100	52.650	22113.00	22534.20	421.20
	29	35200	52.800	22176.00	22598.40	422.40
	30	36200	54.300	22806.00	23240.40	434.40
	31	37200	55.800	23436.00	23882.40	446.40
	32	38200	57.300	24066.00	24524.40	458.40
	33	39300	58.950	24759.00	25230.60	471.60
	34	40400	60.600	25452.00	25936.80	484.80
	35	42000	63.000	26460.00	26964.00	504.00
	36	43200	64.800	27216.00	27734.40	518.40
	37	44400	66.600	27972.00	28504.80	532.80
	38	45600	68.400	28728.00	29275.20	547.20
	39	46800	70.200	29484.00	30045.60	561.60
	40	48100	72.150	30303.00	30880.20	577.20
	41	49400	74.100	31122.00	31714.80	592.80
	42	50700	76.050	31941.00	32549.40	608.40
	43	52000	78.000	32760.00	33384.00	624.00
		410	0.615	258.30	263.22	4.92
		1030	1.545	648.90	661.26	12.36

ALL SET FOR NABARD TRANSITION AS BILL IN FINAL STAGES OF PASSING

The National Bank for Agriculture and Rural Development (Amendment) Bill, 2012, has entered the final stages of being legislated. The token 1 per cent stake of capital that the Reserve Bank of India holds in Nabard is sought to be vested in the centre, completing the transition.

The Bill states that “the capital…which has been subscribed by the Reserve Bank… shall…stand transferred to, and vested in, the Central Government.The Reserve Bank shall be given…in cash, for transfer to, and vesting in the Central Government of the capital…. an amount equal to the face value…at Rs 20 crore.”

The central bank had sold its majority stake to the centre in 2010. The latter now owns 99 per cent in Nabard. The 2012 Bill will help bring about the complete transfer. Direct lending will replace the function of refinance, until now synonymous with Nabard, as the new theme song.

“Nabard…may provide by way of refinance, loans and advances…to state cooperative banks…. primary agricultural credit societies…,” the Bill says.

NEW BENEFICIARIES

It may provide loans and advances also....“to any financial institution or to any class of financial institutions…approved by the board…” There is also a notable expansion of the range of entrepreneurial activities the apex agricultural bank can support, including in the SME sector. Agro-industries, small and medium enterprises and handlooms are additions to the list of beneficiaries.

The posts of chairman and managing director are being merged into a single chairman and managing director.

Mr Jose T. Abraham, vice-president, All-India Nabard Employees Association, said all these will push Nabard to a faster path towards commercialisation.

DIRECT LENDING

Agriculture finance and rural development have traditionally been a central bank function, carried out through Nabard. The 2012 Nabard bill will sever the umbilical cord of the Reserve Bank with development finance at the ground level.

Direct lending has been strongly opposed by cooperatives all over the country, Mr Abraham told Business Line.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article3371208.ece

RBI'S ANAND SINHA: BAD LOANS MAY HAVE PEAKED, LIKELY TO IMPROVE FROM NOW ON

Bad loans in the banking system may have peaked and the situation relating to non-performing assets is likely to improve from now on, Deputy Governor of Reserve Bank of India (RBI), Anand Sinha said here.

"Given the current situation...looks like there would not be undue alarm in the near future. So, assuming that things do not deteriorate in a very significant way, the NPAs might have peaked or the asset quality might have bottomed out. The expectation is that from here on the asset quality should improve," Sinha said in an ASSOCHAM event here.

However, he said, NPAs are the reflection of the stress. "NPAs are the reflection of the stress on the system. We need to manage it well and we believe that we can manage it better. We can reduce the effect of downturn," he added.

Bad assets in the banking system have seen a rapid rise in the recent past and crossed Rs 1 lakh crore mark by the end of second quarter last fiscal on the back of continuous hike in interest rate by the RBI.

Sinha, however, said NPAs didn't pose any systemic risk as found out in the stress-test done by the central bank.

The guidelines for Basel-III norms would be out today, he said. "There will be some kind of impact on the return on equity (RoE) due to high capital requirement provisions under the Basel-III. However, it won't be much."

The Non-Banking Financial Companies (NBFCs) need to be tightly controlled in order to reduce any kind of shadow banking, he stated. "After the global recession, there is an increasing surveillance of the shadow banking system. In that context, NBFCs should be tightly controlled, so that it doesn't pose any systemic risk."

He also said that RBI is looking into the Thorat committee report on NBFCs, and will come up with final guidelines.

As to the growth of domestic economy, he said factors such as global commodity prices, especially the crude oil prices, widening current account deficit and supply side issues in protein food items pose risk to the growth

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/rbis-anand-sinha-bad-loans-may-have-peaked-likely-to-improve-from-now-on/articleshow/12933932.cms

CANARA BANK AND BANK OF INDIA CUTS LENDING RATES

State-run lenders Canara Bank and Bank of India today cut their base rate or minimum rate of lending by 0.25 percent to 10.50 percent following the Reserve Bank's move to cut rates.

Both the banks also cut rates on loans under the older benchmark prime lending rate by a similar 0.25 percent to 14.75 percent, they said in separate filings to the exchanges.

The revisions are applicable from May 1, they said. Their peer Oriental Bank of Commerce (OBC) also cut lending rates by 0.25 percent to 14.75 percent only under the BPLR, leaving the base rate untouched.

The announcements by banks come exactly a fortnight after the RBI cut its short term lending rate, the repo rate, by 0.50 percent to 8 percent prompted by lower inflation and intended at giving a boost to the sagging growth.

All the bankers had opined that the RBI move would lead to reduction in lending rates. Among those who have announced rate reductions till now are ICICI Bank, Corporation Bank and Central Bank of India.

The country's largest lender, State Bank of India, has till now refrained from cutting its base rate but it has cut lending rates in select products.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/canara-bank-and-bank-of-india-cuts-lending-rates/articleshow/12938680.cms

KNOW ABOUT INTER-BANK MOBILE PAYMENT SERVICE

The Inter-bank mobile payment service (IMPS) allows banks to facilitate real-time transfer and receipt of funds for account holders through their mobile phones. The accounts to which the funds are to be transferred can be with the same bank or other specified banks. The transfer can be done using mobile phones or the Internet banking facility at any time, including Sundays and bank holidays.

To use this facility, account holders need to register with their respective banks. For the mobile banking service, they must register with their bank. This can be done online using the customer identity and IPIN provided by the bank or by downloading the mobile banking application form from the bank's website and submitting the completed form at the nearest bank branch.

Process
To use IMPS, the transferor and the beneficiary must have mobile money identifiers (MMID), which can be generated by accessing the account online, mobile banking or by sending SMS to the number specified by the respective bank.

Fund transfer

The transfer process is menu-driven and will require the transferor to provide his MMID and amount to be moved, as well as the registered mobile number and MMID of the beneficiary.

Confirmation

An SMS alert of the debit to the transferor and credit to the beneficiary will be sent to both the parties once the transfer is made.

Charges
Each bank offering the service will individually decide whether there are charges applicable on using the IMPS.

Points to note

1.       The mobile number and MMID of the beneficiary provided at the time of transfer must tally with the registered information with the bank before the transfer is complete.

2.       The RBI has removed the Rs 50,000 limit on fund transfer through mobile banking, but banks specify limits based on their risk assessment.

3.       The MMID can be cancelled by making the necessary request to the bank.

(Content courtesy: Centre for Investment Education and Learning (CIEL))

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/know-about-inter-bank-mobile-payment-service/articleshow/12908844.cms

ALLOW CUSTOMERS TO TRANSFER ACCOUNTS WITHIN BANK: RBI TO BANKS

Bank customers who change jobs or locations will find it easier to shift their bank account to the new location now. The Reserve Bank of India (RBI) has made it mandatory for banks to allow transfer of accounts from one branch to another without insisting on opening a fresh account or making the customer undergo the full know your customer process again.

Earlier, since the account holder's information was maintained with local branches, banks used to insist that customers go through the account opening procedure all over again when they shifted to a different location.

"It has been brought to our notice that some banks are insisting on opening of fresh accounts by customers when customers approach them for transferring their accounts from one branch of the bank to another branch of the same bank. Such insistence on opening of fresh account or making the customer undergo full KYC process again causes inconvenience to them resulting in poor customer service," RBI said in a circular to all banks. The circular added that given that most bank branches are now on core banking solution, records of a particular customer can be accessed by any branch of the bank.

An official with a new generation private bank, however, said, "We provide 'at par' cheque books to our account holders, which means that the cheques will be treated as local cheques no matter which part of the country they are deposited in. So, it really does not matter if the home branch is in a different city."

With all banks having put in place a core banking solution ( CBS) through which all account holder information is maintained in a centralized database accessible across branches, ATMs and internet, the home branch concept has lost relevance. But some private banks charge high fees for services accessed outside the home branch. For instance, most new generation private banks charge a fee for cash withdrawal at branches other than the home branch. Also, some lenders insist that changes in account services or document submission has to be done at the home branch.

In its monetary policy on April 17, RBI had asked banks to have a central customer ID to facilitate portability of accounts and ensure that all customer information is centralized. Some banks are seeing this as a precursor to having a central identity which will help customers transfer accounts across banks without having to repeat the KYC procedure.

"Banks are advised that KYC once done by one branch of the bank should be valid for transfer of the account within the bank as long as full KYC has been done for the concerned account. In order to comply with KYC requirements of correct address of the person, fresh address proof may be obtained from him/her upon such transfer by the transferee branch," RBI said.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/allow-customers-to-transfer-accounts-within-bank-rbi-to-banks/articleshow/12906557.cms

AIBOC CIRCULAR NO. 44 DATED 28.04.2012

AIBOC issued its circular No. 44 dated 28.04.2012 on the proposed amendment to Banking Law Bill. We are placing the same here for our readers.

CIRCULAR NO.44                                    DATE: 28.04.2012

TO ALL AFFILIATES /MEMBERS:

PROPOSED AMENDMENT TO BANKING LAW BILL

We reproduce hereunder the text of UFBU Circular No.7 dated 27th April, 2012 contents of which are self-explicit.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

TEXT

We have to-day sent a communication to the Hon’ble Finance Minister; Govt. of India, expressing our concern over the developments in regard to the Amendment to Banking Law (Amendment) Bill, proposed by the Government and cleared by the Union Cabinet, despite our stiff opposition.  A copy of our communication is enclosed.

We note to advise further developments in the matter.  We also propose to organize protest demonstrations all over the country in the event of the Government pursuing their attempt to place the same before the Parliament for approval. We may also stage Dharna before the Banking Dept. Government of India, New Delhi on the day, when the bill will be moved in the Parliament. We will advise further details after having discussions on the subject in the next meeting of the UFBU to be held on 10th May, 2012 at Bangalore or earlier, depending upon the developments in the matter.

All our constituents/members are therefore requested to be in readiness to jump into action at a short notice.

With revolutionary greetings,

Sd/-

(G.D. NADAF)

CONVENOR

No. 1367/09/12                                                  Date: 28.04.2012

Shri.Pranab Kumar Mukherjee,

Hon’ble Minister of Finance,

Government of India,

NEW DELHI.

Respected Sir,

BANKING LAW (AMENDMENT) BILL - CLEARANCE BY THE UNION CABINET

We are surprised to note that, the Union Cabinet is reported to have cleared the amendments proposed to the Banking Law Bill, which contains several adverse features in the name of the reforms in the financial sector, with a view to pave the way for the handing over the control of the Banking Industry to the Private Sector in the days to come. We have glaring examples before us as to how the new Generation Private Sector Banks have been affecting the economic development of the country at the grass root level, by ignoring the efforts of the Government for the amelioration of the millions and millions of masses living below the poverty line. The dilution of the Government control on the Banks will adversely affect the social banking in our country.

The constituents of UFBU, all along have been opposing these initiatives and have protested when the Government appointed the Standing Committee to examine the draft amendment and has strongly advocated that the ownership of the Government and control over the Banking Industry should be with the Government and that the RBI should have strong regulatory mechanism, so that the Banks are able to function freely in the interest of the common man. However, we now understand that the proposed amendments are for:-

Ø  An increase in the voting rights of an entity in a Private Bank to 26% from 10%, at present.

Ø  An increase in the voting rights of an entity in a Nationalised Bank to 10% from the existing one per cent.

Ø  Power to the RBI to supersede the board of a bank for up to a year if it is deemed not working in the depositors’ interests.

Ø  Power to the RBI to ask for information from banks’ associate companies.

Ø  Taking bank mergers and acquisitions out of the ambit of the CCI etc.

We oppose to each and every provisions proposed for the amendment of the Banking Laws (Amendment) Bill and Bank Nationalisation Bill, which will go against the interest of the country. The performance of the Public Sector Banks is demonstrated to the entire world and it withstood the impact of the US economic recession due to its intrinsic strength and strong fundamentals that allowed the economy to sustain all ill effects of the worldwide economic recession. Now the attempt of the Government to create an environment for easy take over of Public Sector Banks by Private Sector, the free for all provisions enabling merger without any control by CCI and RBI etc., are bound to affect the interest of the Banking Industry which has served the nation in a remarkable way for over 40 years ever since the Nationalisation of the Banks by the Government and supported by the SBI group as a whole.

We therefore urge upon you to kindly ensure that the amendments proposed by the Government are not pushed through in the Parliament in the interest of the nation.  We are confident that the issue will be taken up seriously, to avert any agitation by the constituents of the United Forum of Bank Unions, that represents the entire banking industry having solid support of over one million employees, in the country.

Please treat the matter as urgent.

Thanking you sir,

Yours faithfully,

Sd/-

(G.D.NADAF)

CONVENOR

AIBOC CIRCULAR NO. 43 DATED 28.04.2012

AIBOC issued its circular No. 43 dated 28.04.2012 on APAR format for officers of Public Sector Banks. We are placing the same here for our readers.

CIRCULAR NO.43                                      DATE: 28.04.2012

TO ALL AFFILIATES /MEMBERS:

APAR FORMAT FOR OFFICERS OF PUBLIC SECTOR BANKS

It is noticed that, under self-appraisal format of APAR designed by the Government of India, Ministry of Finance for all Public Sector Banks (except SBI and its Associates), a clause on details of participation in strike/agitation call of Union/Association has been included. The intention of the clause is to de-unionise the officers forming Unions/Associations, enrolling as members and participation in agitation/ strike to express their anguish against unilateral actions on service conditions by Management/Govt. Inclusion of this clause in the highlights of performance and outstanding achievements on budgeted goals conveys a wrong message, creating a fear psychosis in the minds of officers. Participation in agitation/strike by the members of the Union/Association in legitimate trade union activity, is a natural phenomenon. No other authority can restrict exercise of fundamental rights, enshrined in the Constitution of India.

Hence, we have today sent a letter to the Secretary, Department of Financial Services, Ministry of Finance, Government of India, New Delhi for removal of the contentious clause from the self appraisal format. A copy of the communication is enclosed.

We are awaiting positive response from the Ministry and will share it as and when received.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

No. 1452/97/12                                                                       Date: 27.04.2012

Sri. D.K. Mittal

Secretary,

Department of Financial Services,

Ministry of Finance, Government of India

Jeevandeep, III Floor, Parliament Street,

New Delhi -110 001

Respected Sir,

APAR FORMATS FOR OFFICERS OF PUBLIC SECTOR BANKS.

We invite your kind attention to Government of India, Ministry of Finance, Department of Financial Services letter F.No.9/5/2009-IR dated 23.03.2012 on APAR Formats for officers of Public Sector Banks.

One of the items to be highlighted by the appraisee, along with outstanding achievements, during the year under review is, details of his/her participation in strike /agitation called by Union / Association during the period under review.

We feel that, inclusion of details of participation in strike /agitation called by Union /Association, in self appraisal of the candidate conveys a wrong message that, notwithstanding the outstanding achievements, he/she may be deprived of the legitimate promotion on account of  joining in the agitational programme. This may lead to deunionisation of officers, which will be  against the constitutional provision on fundamental rights  granted to every citizen to form Union and Association.

The management is supposed to maintain details of strike participation of every employee / officer. The participation in agitation /strike by an official as a member of the Union / Association, as a collective action, should not be criteria for suitability to promotion. Under the provision of ‘no pay for no work’, salary and allowances of employee /officer concerned, would have been deducted for the strike observed by them.

Hence, we request your good self to arrange to remove the relevant clause on strike /agitation from the Self Appraisal format in Annual Performance Review and to advise the Banks accordingly.

With greetings

Yours faithfully

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

Copy to: The Chairman, Indian Banks’ Association for information and necessary action.

The Chairman

Indian Bankers Association

World Trade Centre Complex,

Centre1, 6th Floor, Cuffe Parade,

MUMBAI – 400 005.

BANKS REPORT OVER 100 HOME LOAN FRAUDS IN THREE MONTHS

Call it a double whammy for public sector banks. Housing loan frauds have crossed the 100-mark in just three months this year. To top it, the amount under write-off (including compromise) for all categories of loans has increased alarmingly.

The Government tabled two sets of data in the Lok Sabha on Friday indicating that banks need to pull up their socks to improve their working. There is apprehension that non-performing assets (NPAs) may increase when banks start announcing their financial results for 2011-12.

In a written answer on home loans, the Minister of State for Finance, Mr Namo Narain Meena, said the Reserve Bank of India had no specific information about home loan scams at any public sector bank. To curb incidents of frauds, the RBI had advised banks to introduce a system of concurrent audit, he said.

The Central Bank had also asked banks to review the working of internal inspection and audit machinery by the audit committee of the Board of Directors. Banks were also advised to constitute a special committee of the board exclusively to monitor frauds of Rs 1 crore and above.

However, a senior bank official said that lack of facility of online inspection of property documents besides other issues help fraudsters. Another senior bank official did not rule out connivance of bank staff and builders.

HEAVY WRITE-OFF

A set of data shows write-offs (including compromise) up from nearly Rs 7,000 crore (March 2009) to over Rs 17,000 crore at the end of March 2011. Banks resort to write-offs only after exhausting all other possible avenues for recovery or when the asset coverage is not enough, Mr Meena said.

According to RBI guidelines, banks should either make full provision or write off such advances and claim tax benefits.

While bankers claim that extra caution in due diligence is taken in all kind of loans, things become difficult when there is too much political pressure to write off or compromise.

SOURCE: http://www.thehindubusinessline.com/industry-and-economy/banking/article3361309.ece