AIBOC CIRCULAR NO. 124 DATED 25TH AUGUST 2010

AIBOC issued its circular No. 124 on 9^th Triennial General Council of the Confederation to be held at Bhubaneshwar. We are reproducing the same here for our readers.

CIRCULAR NO:124                                     25^th AUGUST, 2010

TO ALL AFFILIATES/MEMBERS:

9^TH TRIENNIAL GENERAL COUNCIL OF THE CONFEDERATION - MARCH ON COMRADES MARCH ON TO BHUBANESHWAR - GRAND EVENT ON 29^TH, 30^TH AND 31^ST OF JANUARY, 2011

The next eventful occasion for our fraternity in the Banking Industry will be the 9^th Triennial General Council slated for 29^th, 30^th and 31^st of January 2011 at Bhubaneshwar. We will be convening this historic General Council immediately on conclusion of our Silver Jubilee Celebrations, yet another glorious event in the Bank Officers’ movement during the month of October 2010 at New Delhi.  The 9^th Triennial General Council will be a land mark occasion in the history of the Confederation since it will be the first grand event immediately on completion of our meaningful and fruitful journey of 25 years in the Banking Industry.  Our members are aware that we commenced the celebration of Silver Jubilee in the month of April keeping about 6 months to take up several activities culminating in the Valedictory function of the event in Delhi. The Executive Committee of the Confederation which met recently had deliberated on the conduct of the 9^th Triennial General Council at length and declared that the 9^th Triennial will be a historic one and it should be ensured that it is conducted in a befitting manner. It is in this background, when the Executive Committee made this offer for conducting this programme seeking hosts for the same, the request came from our Orissa State Unit. The Orissa State Unit under the dynamic leadership of Com.Ganesh Mishra, the President and Com.A.K.Motayed, the State Secretary took up the responsibility of hosting the 9^th General Council at Bhubaneshwar and the Executive Committee applauded the acceptance of the offer by them and advised them to finalize the venue etc., so that we can decide the exact date of the event.

We are happy to inform all our affiliates and members that we have now received the confirmation of the dates and other details from the State Unit for the 9^th Triennial General Council at Bhubaneshwar. We furnish below the full details for the benefit of all our affiliates.

9^TH TRIENNIAL GENERAL COUNCIL OF THE CONFEDERATION

Date of Council	29th, 30th and 31st of Jan.2011
Place	Bhubaneshwar City – Orissa State
Inaugural Session	On 29th January, 2011 at Utkal Mandap, an Open air Auditorium near SBI, LHO, Bhubaneshwar
Business Session	On 30th & 31st January, 2011 at KIIT University  - Auditorium, Bhubaneshwar

The other details will be forwarded in due course.

Comrades, this is an important and eventful occasion for all of us.  Let us make this a memorable one and a part of our efforts towards further consolidation of the Bank Officers’ movement. We are confident that the affiliates and their members will be making all out efforts to make this event a milestone in our movement. The affiliates are also requested to take necessary steps for the travel and stay arrangements.

Let us March Towards Bhubaneshwar to assemble on 29^th to 31^st of January 2011 and make the 9^th Triennial General Council a historic one.

With greetings,

Sd/-

(G.D. NADAF)

GENERAL SECRETARY

SHAREHOLDERS CHALLENGE BOR-ICICI MERGER BEFORE CLB

As many as 283 shareholders of the Bank of Rajasthan, including one of its founding members, moved the Company Law Board alleging that its merger with ICICI Bank was in violation of various regulatory norms.

The shareholders, including a founding member of BoR Radheshyam Agarwal, contended that the merger was finalised without getting proper nod of the investors and that the Extraordinary General Meeting on June 21 when the merger was approved was illegal.

The petitioners also claimed that the merger was in violation of market regulator SEBI's order that barred about 100 firms associated with Tayals, the promoters of BoR, from dealing in securities.

The CLB posted the matter for further hearing on September 14. 

During the proceedings, senior advocate Rajiv Nayyar appearing for ICICI Bank submitted that the petition of the shareholders had become infructuous as BoR has been merged with ICICI.

To this, CLB Chairman Justice D R Deshmukh directed ICICI bank to file an affidavit stating the current status.

BoR was merged with ICICI Bank on August 12, following the approval of the Reserve Bank of India. As per the terms and conditions, 25 shares of ICICI bank were alloted for every 118 shares of BoR. 

Company secretary S C Sharma appearing for the shareholders submitted that BoR's merger is without any force as many mandatory processes were bypassed by both banks.

The shareholders requested CLB to appoint officials to investigate the entire merger process, alleging serious legal violation of laws. They also requested the Board to seize BoR's record mishandled by the interested groups, including Tayal group, from being destroyed.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/Shareholders-challenge-BoR-ICICI-merger-before-CLB/articleshow/6440949.cms

CABINET GIVES NOD TO DIRECT TAXES CODE BILL

The Cabinet on Thursday approved Direct Taxes Code (DTC) Bill, clearing decks for tabling the legislation in the Monsoon Session of Parliament so that the new Act ushering in reduced tax rates and exemptions may come into effect from next fiscal.

The Cabinet cleared the bill, highly placed sources said. When enacted, DTC will replace the archaic Income Tax Act and simplify the whole direct tax regime in the country. 

The code aims at reducing tax rates, but expanding the tax base by minimising exemptions.

The Finance Ministry had earlier come out with a draft on the DTC bill, some of whose provisions drew strong criticism from industry as well as the public.

To address those issues, the ministry brought out the revised draft, dropping earlier proposals of taxing provident funds on withdrawal and levying Minimum Alternate Tax on corporates based on their assets.

"As of now, it is proposed to provide the EEE (Exempt- Exempt-Exempt) method of taxation for Government Provident Fund (GPF), Public Provident Fund (PPF) and Recognised Provident Funds (RPF) ...", the revised DTC released by the Finance Ministry said.

The revised draft also puts pensions administered by the interim regulator PFRDA, including pension of government employees who were recruited since January 2004, under EEE treatment.

The first DTC draft had proposed to tax all savings schemes including provident funds at the time of withdrawal bringing them under the EET (Exempt-Exempt-Tax) mode.

Under the EEE mode, the tax exemption is enjoyed at all the three stages--investment, accumulation and withdrawal. 

As regards MAT, it has been clarified that tax would be levied on the book profit, as is the current practice, and not on gross assets has proposed in the draft. The government, Mitra said, had received 1,600 representations on the first draft which was made public in August last year. 

The second draft, however, did not give any details on the income tax structure such as the slabs or rates, which were provided in the first draft released in August 2009.

The first draft had suggested 10 per cent tax on income from Rs 1.60-10 lakhs and 20 per cent on income between Rs 10-25 lakhs and 30 per cent beyond that. However, officials later said these slabs were illustrative.

The officials said the tax rates would be made known only in the proposed Act. 

The earlier DTC draft had proposed to reduce the corporate tax to 25 per cent from the present 30 per cent. The revised proposal has also made it clear that tax incentives on housing loans will continue. Payment on interest on housing loans up to Rs 1.5 lakh will continue. The earlier draft was silent on housing loans.

Source: http://economictimes.indiatimes.com/news/economy/policy/Cabinet-gives-nod-to-Direct-Taxes-Code-Bill/articleshow/6440338.cms

FIRST AUSTRALIAN BANK STARTS INDIA OPERATIONS

Commonwealth Bank of Australia (CBA) has started its full-fledged operations in India with a focus of trade finance, remittances and foreign exchange services, among others.

“We have chosen India as one of our preferred growth markets along with China, Indonesia and Vietnam. We are increasingly looking at emerging markets. But links to Australia are important for us,” said Simon Blair, group executive — international financial services of CBA, in an interaction with the media.

The links include the 400,000 Indian Diaspora in Australia, which the bank is eyeing for the remittances business. Mr Blair said 52% of remittances to India from Australia are handled by his bank. From CBA’s perspective, India is Australia’s fourth-largest export market and so far it is the only Australian bank to operate in the country. Australian banks have started looking outward to Asia as opportunities back home diminish.

CBA is the first Australian bank in the country to start full-fledged banking operations. Its rival, ANZ Bank, has also applied for a licence with RBI. CBA, which was privatised in 1991, figures among the top 21 banks in the world, with 80% of its profits coming from home country operations.

The bank started its operations in the country way back in 2004 with a rep office in Bangalore offering trade finance services to clients doing business with Australia. The bank launched its full-fledged operations only in the current year with a staff strength of 28 headed by CEO Ravi Kushan.

“We are starting to work with Indian companies which are looking at investments in Australia. Moreover as 52% of people of Indian origin in Australia bank with us, we see a lot of opportunities in the area of remittances and NRI banking services,” said Mr Kushan.

The bank may also consider expanding to retail and eventually participate in the financial inclusion space, depending on how the relevant regulations pan out, which are currently in the preliminary stages of discussions.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/First-Australian-bank-starts-India-operations/articleshow/6435778.cms

PROCEDURE FOR REIMBURSEMENT CLAIMS FOR HOSPITALIZATION

The brouhaha over withdrawal of cashless mediclaim in some hospitals by four public sector general insurers has forced many policyholders to opt for making reimbursement claims for expenses incurred during their hospitalisation.

While it is certainly not comparable to the convenience that the cashless facility offers, the insured can, by following the requisite procedure laid out by the insurance company, ensure that it does not turn out to be a tedious procedure.

Here’s the gist of the procedure typically followed by insurance companies or the third-party administrators associated with them and points you need to bear in mind while filing the claim for reimbursement.

Upon discharge, you need to collect the bills, discharge summary and other relevant documents from the hospital. Documentation should also include diagnostic reports and medical advice, if any, from the doctor pertaining to the post-hospitalisation period and cash receipts, if any.

Make sure you verify the completed bill before signing the same. Any discrepancy (or inflated amount) would not only mean lower sum insured available for the rest of the year, but could also act as a roadblock in the path of claims processing.

Once you are out of the hospital, you have to submit all the original documents related to your treatment to the insurer (if claims processing is done in-house) or to the designated TPA (third party administrator).

It is advisable to collect all the documents and submit the same at one go rather than furnishing them when the TPA or the insurer’s claims cell specifically asks for the same once the claims process commences. This will help eliminate any delay in claims processing.

Apart from documents from the hospital, if you have incurred any costs prior to, and after, the hospitalisation period, you need to submit these documents too, provided they are related to the cause of hospitalisation. The norm in the industry is that expenses pertaining to 30 days prior to hospitalisation and 60 days post discharge are to be reimbursed by the insurer.

It also makes sense to acquaint yourself with the exclusions and sub-limits in the policy while claiming a reimbursement to avoid surprises later.

Pregnancy is not covered under several individual mediclaim policies. Similarly, treatment for cataract and piles may not be covered in the first year. Dental treatment and outpatient department expenses are admissible only under a handful of policies. Any tonics, vitamins or equipment like a pacemaker or a wheel-chair, too, could be excluded by some insurers from the scope of coverage.

Once the documents are submitted, the TPA or the insurer’s in-house cell will review the same and arrive at a decision on settling the claim as well as the extent to which the expenses can be reimbursed. 
Typically, within a maximum of 21 days from the date of submission of relevant documents, the insurance company reimburses the amount. In case the processing unit has a query or rejects the claim, an intimation letter is sent to the policyholder. 

Source: http://economictimes.indiatimes.com/personal-finance/insurance/analysis/Procedure-for-reimbursement-claims-for-hospitalisation/articleshow/6435744.cms

RBI SEEKS FINMIN NOD ON EMPLOYEES PAY REVISION

Amid concerns raised by the Reserve Bank of India (RBI) over its autonomy, the central bank has for the first time sought the Finance Ministry's nod for wage revision in the apex bank.

The wage related negotiation has reached a conclusion, but no agreement has been signed between RBI management and the employee unions, sources said.

The details, however, have been shared with the Finance Ministry as per the directive of the ministry issued a few months ago, they said.

The RBI has shared the information with the Finance Ministry to get its approval. Following the clearance from the Ministry the agreement would be signed.

Earlier, RBI used to intimate the Finance Ministry about wage revision after signing the agreement with the unions.

It used to be just a customary affair, sources said.

Wage revision of RBI employees usually happens every 5 years in line with PSU bank employees.

Sharing the negotiation details with the Finance Ministry and seeking its nod seems to be a dilution of RBI's autonomy, sources added.

The development happens, even as the RBI has been voicing concern over autonomy of financial sector regulators.

Earlier this week, RBI in its annual report for 2009-10 had asked the government to ensure that its freedom was not compromised while carrying out a mechanism to sort out jurisdiction issues between the watchdogs in the financial sector.

RBI Governor D Subbarao had also expressed concern over a recent ordinance for a joint mechanism between the financial sector regulators and the Finance Ministry to sort out issues over jurisdiction.

To replace the Ordinance, the government introduced the Securities and Insurance Laws (Amendment and Validation) Bill 2010 in Parliament and assured the regulators that their autonomy will not be compromised.

"During the Parliamentary debate on the Bill, the government gave an assurance that the scope of the proposed Bill will be restricted to jurisdictional disputes on regulation. In operationalising the arrangement envisaged under the Bill, it is important to ensure that the autonomy of the regulators is not compromised, either in fact or in perception," the RBI said in its 2009-10 annual report.

The recent enactment of the Securities and Insurance Laws (Amendment and Validation) Bill 2010 amending inter alia the RBI Act, 1934 had raised concerns in this regard," the central bank said.

The RBI said the issue has assumed greater importance since responsibility of central banks has increased since the global crisis.

Source: http://www.business-standard.com/india/news/rbi-seeks-finmin-nodemployees-pay-revision/106673/on

PMO SEEKS REVIEW OF TWO BANK CMD APPOINTMENTS

The department of personnel and training (DoPT) has expressed reservations on some appointments for top posts in public sector banks. As a result, the prime minister’s office has referred back the appointment files to the cabinet secretariat.

According to sources, DoPT has raised objections regarding two banks, one a large government bank and the second a smaller bank.

A large government bank was supposed to get an executive director of another large bank as chairman. According to the practice for large government banks, an existing chairman of a smaller bank is moved laterally. The government’s decision to promote an executive director as chairman of a large bank has led DoPT to express its reservation.

In the other instance, DoPT has objected because a small government bank was to get a chairman who has less than two years of service left. According to government norms, an executive director is eligible for promotion if the candidate has two years of residual service and has spent one year as ED.

Top posts at four state-run banks, Punjab and Sind Bank, UCO Bank, Corporation Bank and Canara Bank’s, are vacant. Andhra Bank’s Chairman and Managing Director R S Reddy will also retire by the end of this month. Syndicate Bank Executive Director R Ramachandran is expected to replace Reddy.

In the remaining part of the current year, four more vacancies at the top will come, in addition to the seven posts that are already vacant. Among these seven, five chairmen have retired and two have been posted in government agencies. Of the seven posts vacated so far, three appointments have been made.

Source: http://www.business-standard.com/india/news/pmo-seeks-reviewtwo-bank-cmd-appointments/405798/

SBI TO DISCUSS MERGER OF 5 ASSOCIATE BANKS WITH GOVT, SAYS BHATT

According to Sri O.P. Bhatt, Chairman, State Bank of India plans to discuss the issue of merging the remaining five associate banks with the government.

SBI Chairman O P Bhatt said the bank would discuss with the government whether it should go ahead with the consolidation of some more associates. There would be consultations with the five associate banks as well to make the process relatively faster and easier.

Referring to the choice of banks for merger, he said it didn’t matter whether it was listed or unlisted. What mattered was how smoothly it could be done, as SBI had an experience in terms of modalities.

Source: http://www.business-standard.com/india/news/sbi-to-discuss-merger5-associate-banksgovt-says-bhatt/405796/

PENSION OPTION TO DENT INDIAN BANK'S FINANCES

Indian Bank has estimated its liability would go up by Rs 1,000 crore, if the 50 per cent of employees, who earlier opted for provident fund (PF) scheme, opt for pension scheme. In April the Indian Banks’ Association (IBA) entered into a settlement with the worksmen union for giving employees who did not opt for pension earlier to join the scheme.

According to a senior official from the bank, which has around 19,000 employees, 50 per cent of them are under provident fund scheme and remaining under the pension scheme.

When the pension scheme was introduced in 1995, people opted for provident fund scheme, since the interest rates were high. As the rates started coming down, they wanted to migrate to the pension scheme.

Nearly 320,000 public sector bank employees are about to get another opportunity to opt for a monthly pension, which they had silently craved for years. The group includes some 60,000-odd retired employees.

The United Forum of Bank Unions and the bank management’s association IBA have decided that retired bankers willing to switch over to the pension plan will have to surrender 56 per cent of the PF, plus the interest on it.

They have also mutually decided that existing bank employees would have to share 30 per cent of the additional pension burden, while banks would shoulder the balance. Additional pension burden on account of existing employees is pegged at Rs 6,000 crore.

Source: http://www.business-standard.com/india/news/pension-option-to-dent-indian-bank/s-finances/405793/

NO PLANS TO RAISE LENDING RATES: SBI CHIEF

According to Mr. O.P. Bhatt, Chairman, State Bank of India has no plans to raise lending rates further in the short term.

SBI had raised lending and deposit rates this month.

Source: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/No-plans-to-raise-lending-rates-SBI-chief/articleshow/6431570.cms