| Shyamal Majumdar: Time for self-regulation? | ||||||||||||||||||
| Public sector bank chiefs are not always paragons of HR virtue | ||||||||||||||||||
| Shyamal Majumdar / Mumbai Aug 31, 2012, 00:24 ISTHuman resource, or HR, development is one of the key portfolios that K C Chakrabarty handles as the Reserve Bank of India (RBI) deputy governor. And there is no doubt that he has initiated sweeping administrative reforms to ensure fairness in transfers and postings in the central bank. He is also known for his outspokenness in an organisation that seems to specialise in a language that hides more than it reveals. In the past, Chakrabarty has paid the price for his outspokenness. In August, 2010, he was stripped of most of his portfolios after his reported statements that interest rates should have been much higher and how RBI is not the real monetary policy-maker. The statements came shortly after the central bank’s monetary policy announcement. Chakrabarty got back his portfolios after five months as suddenly as he was stripped of them, but he seemed to have taken the temporary setback sportingly. When he was left with just three portfolios, journalists asked him to comment on RBI governor’s views that public sector bank CMDs needed to be paid better. His reply was spontaneous and displayed his sense of humour: Do you want me to disagree so that I am not left with even the Rajbhasha department? In that context, it was surprising that a man who was at the receiving end of public humiliation chose to mete out the same treatment to the chairman of the country’s largest bank by saying he (Pratip Chaudhuri) should “find some other place” if he didn’t agree with the country’s regulatory environment and that RBI doesn’t need to seek anybody’s opinion for its decisions. The person who controls the HR department in RBI should have at least learnt to keep his private emotions in check when he talks in public forums about the heads of the banks he is supposed to regulate. This is indeed against basic HR rules that say you should first learn to respect the dignity of your colleagues. The regulator surely had many other ways of expressing his disapproval of the State Bank of India chairman’s views on the abolition of the cash reserve ratio (CRR). Chaudhuri’s response was interesting: he only reminded everybody that Chakrabarty had similar views on CRR when he was a banker. Many, however, say the deputy governor’s statements were only a sophisticated version of the treatment that chairmen of most public sector banks routinely dish out to their senior colleagues. Remember the example of the Mumbai zonal manager of Indian Bank who was suspended by the bank’s chairman for his failure to extend “basic minimum courtesies”? His crime was that he kept the CMD waiting at the airport for over an hour since the keys got locked in when the luggage was being loaded into the car. The general manager apologised for the incident and explained how he made alternative arrangements that included hiring a cab, arranging two sets of new dhotis and towels, organising a duplicate car key and delivering the CMD’s luggage at the guest house by 1 a m. But he was suspended nevertheless. The suspension was revoked only after media pressure, though the general manager was subsequently transferred. There are many more examples of such high-handed treatment. In another case, the chairman of a public sector bank called an urgent meeting of regional heads who assembled dutifully at 10 a m but were kept waiting for over four hours only to be told that the boss wasn’t in the mood to meet on that day. When they met the next day, the chairman called one of the general managers “impotent” and another an ass. The chairman may have run out of adjectives by then, since the third general manager was called a donkey. One doesn’t know if the three gentlemen deserved such a description, but would such comments made at a public meeting at which quite a few juniors (deputy general managers and additional general managers) were present serve any purpose apart from demoralising the senior-most staff of the bank? Then there is this sad case (reported by the media in the middle of this month) of M U Kini, a former Union Bank of India executive director, being slapped with a corruption charge by his chairman who accused him of making several improper advances worth a few crores of rupees. It was in 1986. The chairman didn’t wait for the executive director’s response and handed over the matter to the Central Bureau of Investigation (CBI). It wasn’t just a coincidence that Kini’s file for appointment as chairman was pending for approval. Kini, who has finally been cleared by the CBI of all the alleged crimes after 24 years, has now attributed the action of the chairman and his coterie to their desire to sabotage his promotional opportunities. Senior public sector bank employees have many such “exemplary” HR stories to share. One would have thought the RBI deputy governor, who was the chairman of two of the country’s top state-run banks, will score better on this front. If you have any such story to share with readers please send it or submit here http://www.business-standard.com/india/storypage.php?autono=484907 | ||||||||||||||||||
Friday, October 26, 2012
Human Relation Department Works In Banks Based On Flattery
Monday, October 15, 2012
Be Ready To Get Transfer Order If You Like to Perform With Honesty
This refers to sudden transfer of
Mr. Ashok Khemka who tried to investigate the illegal land deal which took
place in case of Robert Vadra. Haryana Government and clever Chief Minister
transferred to Mr. Ashok Khemka only because he tried to know the truth of land
scam alleged to have been carried out by Robert Vadra and DLF in nexus with
government employees and politicians.
Action of Haryana government is not unusual and abnormal. It is
not at all astonishing because it is the culture prevalent in all offices
directly or indirectly associated with government .Officers Acting Against Will
Of the Bosses Are usually Transferred to Most Critical Place. Officers who
raise voice against rampant corruption is rejected in Promotion Processes.
Officers who make all efforts to ensure rule of law in their command area are
to face frequent transfers and that to an area which is considered
most critical and most dangerous.
In banks too , officers who make delay in sanction to loans to
kith and kin of bosses or who fail to run like domestic slave during visit of
his boss in his area, or officer who do not act as per whims of bosses are to
face this music . Hundreds of senior
officers , not to speak of junior or mid-level officers
are humiliated in open meetings, are rejected in promotion process
and are posted in critical areas only because they fail in extending
personal service to their bosses, not because they fail to perform as per need
and as per bank's expectation. There is no work culture in any of government offices.
But flattery culture is found in all offices.
Officer who is master in corruption but Star Actor in flattery is
given the best posting and quickest promotion even violating all moral values.
This is why flattery culture is prevalent in all offices and all departments.
Field level officials and workers are busy in extending red carpet
welcome to their bosses , in offering attractive flower bouquets,
in managing their passage through various roads , in decorating roads
and streets through which bosses are planned to pass, in offering costly gifts
and attractive thick garlands, in making point to point care takers in
hotels and offices and so on .
Crores of rupees are wasted
in making the trip of the bosses pleasant but none is found to be
serious on the office work, duty towards the country and what is good for the
common men.
This flattery culture is the root cause of all bribery and all
corrupt practices. In other words we can say that to perpetuate the reign of
bribery and to continue the practice of earning money through illegal
sources, one has to indulge in flattery. Culture of flattery and bribery is so
much deep rooted and so much deeply imbibed in the blood of most of officials
that an officer who tries to work honestly and for the benefit of common men in
tune of laid down policies are treated as mad , insane, unsocial and
impractical in the system.
Transfer policies are frequently
violated in all offices just to please senior officers and powerful politicians.
There is no value to goodness of any official. There is no respect to so called
whistle blower policy framed by many offices. Our learned PM is ready to punish
those who raise voice against corrupt powerful officials and corrupt
politicians. Officers are suspended only because they fail to abide by illegal
orders of the bosses. This is Indian culture.
Senior official probing Vadra-DLF land deal shunted out ( published in newspaper The Hindu)
Exclusive Hours after Haryana’s top land records officer starts probe into Vadra’s dealings, he is transferred
A top official in the Haryana government’s land registration department was transferred hours after he initiated a probe into all the land dealings of Robert Vadra, son-in-law of Congress president Sonia Gandhi, in four districts of the State neighbouring Delhi, The Hindu can disclose.
The transfer order came on October 11, 2012 — even as the country was still digesting the allegations made by India Against Corruption of a nexus between Mr. Vadra and real estate giant DLF — and strongly suggests that the dealings between the two were not just “transactions between private individuals” but may have involved the cooperation and even collusion of politicians and bureaucrats. Haryana has been ruled by Chief Minister Bhupinder Singh Hooda of the Congress since 2004.
The transferred officer, Ashok Khemka, has protested his eviction from the post of Haryana’s Director-General of Land Consolidation and Land Records-cum-Inspector-General of Registration in writing, alleging mala fide. Though he had no option but to accept the marching orders, Mr. Khemka issued an order on his last day in office on October 15 cancelling the mutation of a 3.531-acre plot of land in Manesar-Shikohpur that Mr. Vadra had sold to DLF for Rs. 58 crore.
Three days earlier, pursuant to the probe he had already initiated, Mr. Khemka issued a letter formally ordering an inquiry across four districts into the “alleged under-valuation of some properties registered by Shri Robert Vadra or his companies as vendor or vendee.” His letter took note of IAC’s allegations and reports in the media.
Based on the preliminary details uncovered by the inquiry in the case of at least one of those properties, Mr. Khemka cancelled the mutation of the 3.531- acre plot that Mr. Vadra’s company, M/s Sky Light Hospitality, had sold to DLF Universal Ltd on September 18, 2012. He did so on the grounds that the mutation violated the States Consolidation Act and was done not by a revenue officer but by the Assistant Consolidation Officer of Gurgaon who was not authorised to do so. (EA4/2012/4620-4621 dated 15 October, 2012)
The inquiry also points out that the action of the sub-registrar, Manesar, in registering the property was “not proper” because the estate of Shikohpur was notified for consolidation in August 2011 and as such transfer/sale of property during the pendency of consolidation proceedings without the sanction of the Consolidation Officer is prohibited. He also found that the permission given to Mr. Vadra on April 3, 2012 by Haryana’s Town and Country Planning Department to sell the property violated the same provision of the Consolidation Act.
A careful perusal of the timeline of the purchase and sale of this property also raises questions about the exact nature of the deal Mr. Vadra had struck with DLF. The sale deed of this land shows that it was bought by Sky Light Hospitality for Rs. 7.5 crore on February 12, 2008, and mutated in its favour the very next day. A little more than a month later, on March 28, 2008, the Town and Country Planning Department issued Mr. Vadra’s company a licence to develop 2.701 acres of the land into a housing colony. This licence was subsequently renewed on January 18, 2011, according to the enquiry report accessed by The Hindu.
But though the sale deed of this land for Rs. 58 crore to DLF was registered on September 18, 2012, the enquiry found that Mr. Vadra had “entered into an agreement to sell within 65 days of the issue of the first licence.” By October 2009, he had received Rs. 50 crore out of the total sale consideration, the first instalment of which was made on June 3, 2008. Mr. Khemka, in his order, points out: “It is not clear what made the Town and Country Planning Department renew the licence in 2011 in favour of Sky Light Ltd when 86.2 per cent of the total sale money had been paid 15 months before.”
“If M/s Sky Light Ltd suppressed the fact that [it] had entered into a sale agreement of the property with DLF before the renewal of the licence then the department ought to be taking action [against] the former for suppressing facts.” But if Mr. Vadra had indeed informed the department about his entering into an agreement to sell the land to DLF on June 3, 2008 (when the first instalment was paid) “it is unfathomable how the department could renew the licence in 2011” in his favour, “when he had ex-facie entered into agreement to sell within 65 days of the issue of the first licence,” Mr. Khemka’s report goes on to say.
Haryana officials familiar with the deal say that the sequence of transactions — in which the land’s value went up from Rs. 7.5 crore to Rs. 58 crore in just 65 days because of the licence given to it — raises questions about whether DLF had entered into business with Mr. Vadra in order to get clearances for land that may not have been forthcoming through regular methods.
In his October 12 letter, Mr. Khemka, undeterred by his transfer, ordered the deputy commissioners of the districts of Gurgaon, Faridabad, Palwal and Mewat to inspect all documents from 2005 to date, registered by Mr. Vadra or his companies, either as buyer or seller, to check whether any property has been undervalued for the purpose of evading payment of stamp duty.
Mr. Khemka’s transfer comes after he has spent less than three months in his assignment as Inspector-General of Registration where, besides probing the Vadra deals, he has uncovered massive fraud in the transfer of panchayat lands to realtor companies and some powerful bureaucrats and politicians.
In an angry letter to the Haryana Chief Secretary protesting his transfer, Mr. Khemka has requested him to “see for himself the cases of villages Baad Gujar, Rozka Gujar, Kot, Shikohpur, Kalesar, Anhir, Malikpur, Bangar and Chirsi. It is grossly unfair to punish me for being upright and exposing the scams and corrupt acts instead of taking action against the guilty.” “It seems that this is deliberate and mala fide to punish me due to some vested elements in the political bureaucratic hierarchy affected by the exposure of the scam in Consolidation under the garb of exercise of powers. Several hundred crores worth of panchayat lands were transferred to realtor companies which were created a few days earlier… Panchayats also lost huge lands in consolidation by way of deliberate undervaluation,” the letter states. He ends by saying: “I am threatened that I would be subject to transfer every month so as to humiliate me and demoralize me.”
Mr. Khemka has been transferred to the Haryana Seeds Development Corporation on a post that was held by an officer 12 years his junior. He left charge on Monday, but not before issuing orders cancelling the mutation in favour of DLF and putting on record the irregularities that he has detected in the Manesar-Shikohpur land deal.
Haryana officers say that the discretionary Change in Land Use permission is exercised almost like the old industrial licensing regime and is the “mother source of all land scams. CLU permission granted on agricultural land escalates its value manifold, resulting in a premium for a nexus of realtors, politicians and bureaucrats.”
With Mr. Khemka out of the way, it is not clear if the leads he had developed or the inquiry he has ordered would be followed by the Haryana authorities. On October 12, he formally ordered four Deputy Commissioners-cum-registrars to “estimate the real value” of Mr. Vadra’s direct and indirect property holdings “and in case of under-valuations the matter should be referred to the Collector under Section 47-A of the Indian Stamps Act for correct assessment of the stamp duty payable. The names of the companies of Shri Robert Vadra as reported in The Hindu dated October 8, 2012 include Sky Light Realty, Sky Light Hospitality, Real Earth Estates, Blue Breeze Trading, Artex and Northern India IT Parks.”
Mr. Khemka had asked that the report “must reach this office by October 25, 2012.”
Haryana hounds whistleblower, emits wrong signals
Robert Vadra: Haryana IAS officer who cancelled Rs 58 cr land deal transferred
Sunday, October 14, 2012
Bank Officers Will Soon Realize The Credibility of Their Unon Leaders And IBA Managers
Bank staff were expecting handsome increase in their wages in Xth Bipartite Settlement likely to happen in few months or few years.This is because they were badly cheated in last Bipartite settlement which took place after 30 months long struggle in the year 2010. They had been promised by their clever trade union leaders that due to abnormal load of 2nd option of pension , they could not get attractive hike in wages, but they promised that in the next settlement they will break all past records.
Innocent and clean hearted bank staff have since long been waiting for sharp increase in wages as also introduction of 5 days week in banks. Bank staff were divided in two parts by clever bank management and clever union leaders by realising pension cost from those staff who opted for 2nd option of pension and exonerated bank staff who opted for pension before 2010.
After IX settlement many employees were happy only because they were not required to share the loan of pension and their friends who exercised 2nd option of pension were cheated by IBA in collusion with trade union leaders enjoying majority.Still court cases are in progress but petitioners in various courts have also perhaps been motivated or bought by clever trade union leaders and top bankers to postpone the decision in courts as long as possible.Banks succeeded in dividing the bank staff in nexus with their protectors called as trade union leaders.
This time clever bank management and clever union leaders will silently watch how government of India once again cheat them by asking banks to settle their individual wage revision taking into account their capacity to bear the burden of wage revision. SBI is already having better wage structure and SBI staff are enjoying pension as third terminal benefit and this time they are going to sanction better wage revision . Bank staff of other public sector banks will cry for wage revision and government will not help telling that their profitability is lower than that of SBI.
Bad assets in all banks is in huge volume and they cannot earn profit as they hitherto earned by concealment of bad assets and by not making adequate provisions for terminal benefits available to bank staff on retirement.Though bank staff has to work daily late and work on Sundays i.e. for weekly hours 150% of normal working weekly hours set by labour office, they cannot expect even 10 percent hike in wages this time.
Banks are earning profit by exploitation of bank staff and by saving staff cost as they used to do before nationalisation of banks and as private sector uses to do earn profit.Communist parties which used to be called as well wisher of working class is also silent spectator for reasons best known to them.
Politicians and clever and corrupt top ranked bank officials are looting the banks firstly in large scale loan disbursement and then in compromise settlement and waiver of loans.Clever banks do not want to declare a bad account as bad and think it wise to restructure them again and again to save provision and to increase profit but they will have to surrender sooner or the later.There is no question of increase in profit in forthcoming quarters until bankers play foul game.
No power on earth can save these sick banks until bank staff learn to first save the banks from the hands of corrupt bankers and corrupt politicians and no power on earth can ensure better wage hike until they stop blind flattery to bosses in banks and top leaders of bank unions.
Manipulation in asset classification, deposit , advances and balance sheet, manipulation in provision and profit, manipulation in recruitment of staff and promotion of officer form one scale to other,manipulation in restructure of loan, manipulation in submission of various reports to RBI and GOI, manipulation in compliance of guidelines and so on .
How long this reign of manipulation will be allowed to perpetuate ?
Government will have to stop manipulation. Bank staff will have to accept the bitter truth of their banks and then only they can plan strategy and course of action to cure the system to ensure best future of the bank and also to ensure best future of bank employees and their families.
Bank officers who are indulged in flattery to top bankers or top trade union leaders for getting favour in posting and promotion are real enemy of banking fraternity and hence it is the need of the hour that bank employees in general understand the bitter truth of their bank and chalk out revival plan without any self motive in mind.They have to distinguish between good bosses and bad bosses , good leaders and bad leaders , corrupt officers and honest officers and finally between good speakers but bad performers and bad speakers but good performers.
Innocent and clean hearted bank staff have since long been waiting for sharp increase in wages as also introduction of 5 days week in banks. Bank staff were divided in two parts by clever bank management and clever union leaders by realising pension cost from those staff who opted for 2nd option of pension and exonerated bank staff who opted for pension before 2010.
After IX settlement many employees were happy only because they were not required to share the loan of pension and their friends who exercised 2nd option of pension were cheated by IBA in collusion with trade union leaders enjoying majority.Still court cases are in progress but petitioners in various courts have also perhaps been motivated or bought by clever trade union leaders and top bankers to postpone the decision in courts as long as possible.Banks succeeded in dividing the bank staff in nexus with their protectors called as trade union leaders.
This time clever bank management and clever union leaders will silently watch how government of India once again cheat them by asking banks to settle their individual wage revision taking into account their capacity to bear the burden of wage revision. SBI is already having better wage structure and SBI staff are enjoying pension as third terminal benefit and this time they are going to sanction better wage revision . Bank staff of other public sector banks will cry for wage revision and government will not help telling that their profitability is lower than that of SBI.
Bad assets in all banks is in huge volume and they cannot earn profit as they hitherto earned by concealment of bad assets and by not making adequate provisions for terminal benefits available to bank staff on retirement.Though bank staff has to work daily late and work on Sundays i.e. for weekly hours 150% of normal working weekly hours set by labour office, they cannot expect even 10 percent hike in wages this time.
Banks are earning profit by exploitation of bank staff and by saving staff cost as they used to do before nationalisation of banks and as private sector uses to do earn profit.Communist parties which used to be called as well wisher of working class is also silent spectator for reasons best known to them.
Politicians and clever and corrupt top ranked bank officials are looting the banks firstly in large scale loan disbursement and then in compromise settlement and waiver of loans.Clever banks do not want to declare a bad account as bad and think it wise to restructure them again and again to save provision and to increase profit but they will have to surrender sooner or the later.There is no question of increase in profit in forthcoming quarters until bankers play foul game.
No power on earth can save these sick banks until bank staff learn to first save the banks from the hands of corrupt bankers and corrupt politicians and no power on earth can ensure better wage hike until they stop blind flattery to bosses in banks and top leaders of bank unions.
Manipulation in asset classification, deposit , advances and balance sheet, manipulation in provision and profit, manipulation in recruitment of staff and promotion of officer form one scale to other,manipulation in restructure of loan, manipulation in submission of various reports to RBI and GOI, manipulation in compliance of guidelines and so on .
How long this reign of manipulation will be allowed to perpetuate ?
Government will have to stop manipulation. Bank staff will have to accept the bitter truth of their banks and then only they can plan strategy and course of action to cure the system to ensure best future of the bank and also to ensure best future of bank employees and their families.
Bank officers who are indulged in flattery to top bankers or top trade union leaders for getting favour in posting and promotion are real enemy of banking fraternity and hence it is the need of the hour that bank employees in general understand the bitter truth of their bank and chalk out revival plan without any self motive in mind.They have to distinguish between good bosses and bad bosses , good leaders and bad leaders , corrupt officers and honest officers and finally between good speakers but bad performers and bad speakers but good performers.
Bank officers on warpath
This is a news item published in Business Line
KOCHI, OCT. 14:
Bank officers across the country are planning agitation programmes against the government’s ‘anti-people and anti-workers’ policy.
Speaking at the State committee meeting of the All India Bank Officers Association here, S. Nagarajan, its general secretary, said that despite repeated pleas, the government is continuing its reforms in the banking and financial sector, which is detrimental to the interests of the country.
AIBOA, he said, is demanding regulated working hours for bank officers. He alleged that the government is dividing bank officers and other employees by giving separate packages for officers of the State Bank of India. AIBOA has demanded parity of service conditions with SBI immediately.
STAFF SHORTAGE
The government, he said, is not recruiting adequate personnel in the banking system which is affecting the customer service. AIBOA has demanded to reinstate Banking Service Recruitment Board urgently and to recruit sufficient number of staff.
The association is also seriously pursuing the issues of compassionate ground appointments in banks, he added.
The United Forum of Bank Unions, which comprises all the unions of the banking industry, will meet soon to decide further course of action, he said.
M.A. Sreenivasan, AIBOA deputy general secretary, K. Sathianathan, State general secretary, N.B. Kishorekumar, State president, spoke. Bank officers from different parts of the State participated in the deliberations.
Monday, October 8, 2012
FITCH Have A Positive Outlook for Indian Banks
I do not agree with FITCH that asset quality of banks will remain under pressure for three four quarters only. Actually bad assets which are gradually surfacing are only hidden bad assets .
As a matter
of fact asset quality of bank is worse than what has till now been projected by
clever bankers and what has been certified by greedy Chartered Accountants. Game
of manipulation and restructuring are only the options available with banks to
stop exposure of huge NPA surfacing. After adoption of system generated
recognition of bad assets, evil works of banks had started coming on surface
but the trend of actual recognition of bad assets has once again has been
reversed.
Great
administrator Mr. KC Chakravorty and Mr. D. K. Mittal contributed a lot to cure
the banking system. But unfortunately master PC again gave free
hand to wise banks to conceal NPA by hook or by crook and succeeded in shutting
the mouth of Mr. Mittal and Mr. Chakravorty. But this is also certain that
manipulation with system can give only temporary solution. One may however
imagine the fate of honest whistle blower in banks who use to raise voice off
and on against evil motivated lending by state run banks.
Until banks
learn to stop the culture of flattery and bribery and ensure full proof method
of recognition of right people in right way, there is no power on earth which
can stop rise in NPA, manipulation and it is bitter truth that restructuring
may only postpone the crisis in the same way as the government has postponed
adverse impact of current fiscal crisis of the country by accepting FDI despite
all round protest.
To improve
the quality of assets in real sense and to stop further slippages of asset from
good to bad category, bank management have to improve quality of
assets from the level of sanctioning of loan, improving monitoring mechanism ,
improve legal system , Improve HR policies and create a fear in the mind of bad
officers as well as bad borrowers called as defaulters by quick and effective
action .
Politicians have to
differentiate between loan and charity and have to stop culture of waiver of
loan and compromise settlement with willful defaulters..It is ironical that
clever Finance Minister instead of curing the sick public sector banks have building
pressure on RBI to ease prudential guidelines for recognition of Non Performing
Assets. Mr. FM is ready to even sideline the recent report submitted by Mr.
Mahapatra recommending first recognition of hidden bad assets and then
suggesting stopping of forbearance of regulators and suggesting
not concealing them under carpet.
Until a Doctor ascertain the
gravity of sickness through through check up and body scan of the body he
cannot properly diagnose the patient.Similarly
clever FM cannot cure the sick bank with prejudiced mindset and with ill
motivated brain.
Bank
management have to stop manipulation in promotion process, stop
arbitrary and whimsical transfer of officers who fail to flatter and who are
not complete yes-man of bosses. They have to stop manipulation in
promotion processes and improve full proof value to real workers and give full
weightage to experienced officers. They have to select knowledgeable
person for the post of Branch Head and improve training system.
It is
worthwhile to mention here that banks which had been frequently awarded with so
many prestigious prizes for best and excellent training system in
their bank have the worst quality of officers and have the maximum ratio of
gross NPA in their bank. Corporate which have managed best rating from rating
agencies are facing the worst fiscal problems and it is they and their
companies which are mainly defaulters. Unrated advances like agriculture,
trade advances and corporate advances upto Rs.5.00 crores constitute low
proportion of bad assets in banks compared to corporate houses enjoying
advances more than Rs.5.00 crores which have been rated best by
rating agencies after getting attractive service charges and much
more unmentionable services.
Large Indian banks can withstand NPA pressure, says Fitch Ratings
Collected from Economic Times 09.10.12
Kolkata: Large Indian banks are resilient enough to withstand sustained pressure on their asset quality,Fitch Ratings said Monday. But it warned that a few medium sized lenders with high asset concentration and weak equity are vulnerable to downgrades.
The global rating company expects local banks to continue to face asset quality weaknesses over the next few quarters and has projected a rise in the banking system's gross non-performing assets or NPAratio to 4.2% in the fiscal to March 2013, up from an earlier estimation of 3.75%.
"Most banks have a reasonable buffer to withstand increased stress," it said, while it warned a few medium sized banks with poor equity base of possible downgrades if their exposure to stressed assets continues to rise without a corresponding increase in equity buffer.
"Asset quality is likely to remain under pressure at least for the next three to four quarters, particularly from the infrastructure sector in which banks' exposures are concentrated."
Fitch said most large government and private banks have passed stress tests done on them as their core equity remain intact with both profits and general reserves being adequate.
The government has budgeted around Rs 16,000 crore for bank recapitalisation in FY13 and has worked on a 10-year recapitalisation plan for government banks.
Get real: Relaxed definition of NPAs will not solve the problem
Editorial in ET on 09.10.12
Faced with the reality of rising non-performing assets(NPAs) in the banking sector, the government is reportedly leaning on the bank regulator RBI to ease the prudential guidelines for recognition of NPAs.
The move is both shortsighted and ill-advised. The first step in addressing any problem, whether it is NPAs or anything else, is to recognise its existence. The reality is that thanks to a combination of factors — aggressive (imprudent?) lending by banks during the time of easy money, the reversal in interest rates and the economic slowdown — NPAs have grown dramatically during the last few months.
According to the RBI, while gross advances grew by 17% during the period 2010-11 to 2011-12, gross NPAs grew by 46%. This is clearly a cause for concern, if not alarm. Yet, far from admitting the full scale of the problem, the government seems to be looking for 'smokeand-mirror' solutions.
Relaxing the definition of NPAs will only postpone the problem even as it becomes more intractable in the interim. The problem is more acute in the case of nationalised banks and further regulatory forbearance will ultimately necessitate large-scale write-offs; and with taxpayer money! It is worth noting that restructured accounts grew at a compound annual growth rate of 47.86% in public sector banks against a credit growth rate of 19.57% during the last year.
Ironically, the government's move comes quick on the heels of the recommendations of the expert committee under the chairmanship of the RBI executive director B Mahapatra, advocating exactly the opposite. Pointing to the dangers of 'regulatory forbearance' that merely serves to brush bad debts under the carpet, the committee had urged tightening of the norms to bring them on par with those in more developed countries.
On the contrary, the government seems to be toying with the idea of allowing even more regulatory leeway. The idea seems to be to present an artificially rosy picture. Never mind the reality. However, painting a Pollyanna world about asset quality is unlikely to fool either rating agencies or informed observers of the Indian economy
Friday, October 5, 2012
Selection Of ED And CMD of Public Sector Bank
Frivolous complaints bog down selection of public sector banks chairmen
collected from Economic times
NEW DELHI: The task of appointing chairmen of state-run banks is proving to be a challenge for the government, with its vigilance machinery getting bogged down in a myriad of corruption charges against selected candidates.
Since taking office in July, P Chidambaram has cleared the selection of chairmen for six state-run banks, including lateral movement of two bank chiefs. However, two banks-Bank of India and Canara Bank-have been functioning without a chief since Monday.
Vigilance officials say their task is daunting, as complaints of irregularities start pouring in once a candidate has been selected. "There are all kinds of complaints. Some as frivolous as that the candidate has distributed gold coins in the ministry," a finance ministry official said, adding that in some cases the complainants and addresses were fictional or the objections were filed on forged letterheads.
The government fears this trend may delay the appointment of chairmen in lending institutions, including Bank of Baroda where the existing chief is due to retire next month. Due to lateral movement of bank chiefs, the post of chairman in UCO Bank and Indian Bank will also need to be filled up.
A chairman of a state-run bank concurred with the vigilance officials, saying complaints start flowing in once a candidate is known to be a front-runner. "There was a complaint that I had suppressed a fraud at a foreign branch. While the fact is that I was never posted in that city." The ministry official quoted earlier pointed to a similar problem in the case of LIC. DK Mehrotra, the chairman of the state-run life insurer, was appointed almost a year after the government decided not to extend the tenure of TS Vijayan.
Earlier, following intense lobbying by chairmen of smaller state-run banks, Chidambaram had decided in favour of precedence for appointment to the top-level job. The key posts in Bank of India, Bank of Baroda and Canara Bank were earlier to be filled through executive directors, and not chairmen of smaller state-run banks, which was a precedent.
The government, however, blames the Central Vigilance Commission (CVC) for the delay in clearances.
Are Complaints Against EDs Approved for CMD Posts Frivolous or Genuine ?
Collected from Website namely www.allbankingsolutions.com
by
Rajesh Goyal 
Today (05/10/2012) an article has appeared in ET under the heading "Frivolous complaints bog down selection of public sector banks chairmen". The whole stress in the article has been that the delay in selection of CMDs for PS Banks is merely on account of frivolous complaints against poor CMD aspirants. The article concludes "the government, however, blames the Central Vigilance Commission (CVC) for the delay in clearances". Can I know, when was the final decision for taken? After this decision, for how long the files are pending with CVC? Is the delay due to CVC clearance or the hectic lobbying of manipulators in MoF for plum posts ? There is a need to ponder on these questions to reach the bottom of the issue. National media needs to be more responsible in side tracking the main issue of corruption.
At AllBankingSolutions.com we have been constantly trying to give updates based on internal news and leaks (which are sometimes also planted). All such information we share through our column Hot Talks, which is based on such leaked information that trickles from various sources. Such information are not always final as number of lobbying groups constantly exert pressures to ensure that they are the real beneficiaries of the final decisions. When interviews for creating the panel for CMDs were held in the second week of January 2012, it was expected that the list will be out within a week's time. Hectic lobbying followed and matter could not take final shape even after delay of 8 months - in between even FM has changed.
It was only at the beginning of this month that AllBankingSolutions.com was the first to take up the issue of Headless Banks. In our Hot Talks we have mentioned about the dubious credentials of some of the CMD aspirants. I know this website is too small to swing the pendulum on right side, but it appears it has certainly made some ripples in the corridors of power by exposing the nexus between politicians and top bankers. Now articles giving frivolous causes for the delay have started appearing in financial newspapers. This is mainly to shift the focus from corruption to blaming the CVC for keeping the banks Headless.
It appears the lobby of those dubious credential aspirants has upped their ante and by planting such news items, they are trying to put pressure on vigilance institutions to clear their names in a hurried manner so as to fill up vacancies.
Now question arises whether complaints against EDs approved for CMDs posts are always frivolous or always true. Almost everybody will agree that both statements are incorrect. There will be certainly some complaints which are frivolous and can be planted by other group. However, each one of us knows that corruption in India at present has touched its Zenith. Banking industry is also no exception. I think the longest list of officers who are charged by CVC every month with corruption is from banks. Banking fraternity now frequently and openly discusses the 'on going rate' for promotions to the posts of EDs and CMDs. Can there be smoke without fire? The amounts mentioned in such talks are mind boggling and at least I am shocked to hear such figures. It is true that such compensation may not be necessary in all cases, but even if it is in some cases, the question is from where does such huge amounts are collected. The only way is corruption.
Therefore, to say that such complaints are frivolous and blame CVC for delays, is only to skirt the issue of corruption in top circles of the banking industry. Such news are frequently planted by the most corrupt people as they want to create an environment where CVC is put under pressure to clear their names in a hurried fashion. If an independent survey is conducted and general perception of the officers at all levels working in such banks is sought, a majority of the CMD aspirants will be found to be in the negative list on account of perception about corruption during their tenure. Certainly some aspirants will get kudos for clean image.
Thus, there is a need for revamping the whole system of selection to the posts of EDs and CMDs. If the practice of payments to political bosses for promotion to the posts of EDs and CMDs continue, then nobody can stop the corruption to collect the funds for making such payments. When a person will indulge in corrupt practices, there will be certainly complaints by other groups. The complaints are the only check and balancing system as the people who have paid and received money will never complaint as both of them are beneficiaries of this system. Therefore, complaints needs to be taken seriously after filtering frivolous complaints.
Selection of CMDs and EDs in Public Sectors Banks Are Nothing More Than Farce
At the outset, I would like to admit that idea of writing an article under this heading is not my original idea. A number of times such thoughts have crossed my mind, but I could not assimilate all these to write an article under such explosive heading. As I was searching for something on banking, I came across a write up of 2005 in Rediff under the heading "Farce of Bank CMD Selection" (the original articles appears to have been published in Business Standard). As I read the article, I felt that nothing has changed in last 7 years. Thus, I thought of sharing my views with our readers with my own experience and current happenings. Let us examine some recent experiences which led us to believe that selection to the posts of CMDs and EDs in PS banks is a farce.
(A) Eligibility Criteria : The First and foremost is the eligibility criteria for becoming CMDs and EDs of PS Banks. The question to be asked is, whether we have any fixed criteria of eligibility over a long period. The answer is big NO. The eligibility criterion is changed so frequently and arbitrarily that no one is ever sure, whether next time he or she will be eligible for being called for interview. The eligibility criteria is changed as per whims of the political and bureaucratic bosses, who do so to include or exclude certain candidates. The news item of May 2011 in ET read
'Facing shortage of experienced hand, the government has relaxed the criteria for selection of Chairman and Managing Director (CMD) of public sector banks, a decision that would make several executive directors eligible for elevation as CMD. Under the new criteria, a bank executive director (ED) with a minimum experience of 6 months would also be eligible to become CMDs. Earlier, an ED had to serve a minimum of one year to become eligible for the bank's top post. The government has eased the experience clause to 6 months from earlier requirement of at least 12 months".
Currently (August and September 2012), again the norms of selection criteria and postings of CMDs is again being tweaked to suit the current FM. Files are moving from our Ministry to another department and back to approve the lateral movement of CMDs.
In respect of eligibility criteria, I would like to quote from the above article as these words still appears to be very relevant :
Q1 . Which of these statements is true?
(i) If you are an executive director of a public sector bank, you can qualify to head a PSB
as its chairman-cum-managing director provided you have put in at least two years of service
as an ED and have a residual service of two years.
(ii) If you are an ED of a PSB, you can qualify to head a PSB as its CMD, provided you
have put in at least six months of service as an ED and have a residual service of two years.
(iii) If you are an ED of a PSB, you can qualify to head a PSB as its CMD,
even if you have a residual service of less than two years.
Ans : All of these statements are true.
Q2. Which of these statements is true?
(i) If you want to become the CMD of a big PSB, you must become the chairman of a small
bank first.
(ii) If you want to become the CMD of a big bank, you don't need to migrate from one small
bank to a big bank. (iii)
(iii) You can directly be made the chairman of a big bank.
(iv) You can never become the CMD of the same bank where you're an ED.
(v) You can indeed become the chairman of the same bank after serving as its ED.
Ans : Once again, all these statements are true.
In last 7 years some changes may be required to redraft the questions, but if we will see the
eligbility criteria for last 7 years or so, there will be no doubt that eligibility criteria has been
a BIG FARCE and manipulated every year to suit the candidates who have created leverage
in the political circles.
(B) Farce at Interviews for CMDs and EDs :
We all are aware that how the selection of CMDs and EDs take place. 20 to 30 candidates
are called on a single day / two days (if number is bigger). The interview board calls each
of them and asks them standard type questions for 10 to 15 minutes (sometimes it can be
even less or slightly longer). Something on similar lines as it happens for selection for the
posts of Manager / Sr Managers at bank level. Can a Board assess anybody for the post
of CMD or ED in 10 to 15 minutes? I know when my son was to be appointed at a Middle
Level in an American MNC, he had to appear for 7 interviews with total time around
6 hours of interview times. Here in India even for selection of CMD of biggest banks,
15 minutes is sufficient. This shows the level of our commitment in selection process.
Everything is pre arranged and interviews are mere FARCE.
(C) What weightage is given to Real Banking Experience: I would not be off the mark,
if I say NONE. There are examples where officers who have NEVER worked in a
branch have become CMDs of not one bank but TWO banks. Even while promoting a
hard working and honest officer in ScaleIII, the same CMDs and EDs shamelessly ask
what is your total experience of working in a branch. If they have decided to deny him
promotion, he will be told that you do not have sufficient experience of working in branch.
I wonder why nobody asked such questions to them during their elevation from Scale I to
Scale VII. If this is not FARCE, than what we will call FARCE. Moreover, there is
no higher weightage given to people who have worked in a bigger banks. A review of
the present trends will indicate that people from smaller banks have risen to become CMDs
and EDs at a much faster pace than the people working in bigger banks like PNB.
(D) No weightage to Seniority even after selection in the panel : Even after selection
in a panel, there is no criteria for giving weightage to seniority. We will see that from a
panel of the selected persons, suddenly a junior most will be given first as the posting than
the senior most post. Even in the latest list of promotions from GMs to EDs, a number
of juniors have already been posted as EDs almost four months back whereas some
very senior GMs (rather Chief General Managers) from the same bank have been
denied the postings till date. What is the criteria ? Nobody can explain the same.
There appears to be utter chaos and nepotism in the posting from the finally selected
candidates. Sometime good candidates although selected get never posted and new panel
is created. Once a panel is created, what is problem in adhering to seniority.
This kind of arbitrariness brings corruption and heart burning among honest officers
Latest FARCE : Fate of Lastest Selection Process : It is a complete FARCE :
The interviews for selection of new CMDs in six Public Sector Banks were
conducted on 12th January, 2012 in a great hurry and the reports indicated at that time
that list will be out maximum within 8 to 10 days or so. Now even after a lapse of 8 months,
nobody is sure when will be the list declared. Similarly, interviews for filling up posts of
EDs was held towards end of January 2012. Then suddenly some candidates were posted
as EDs whereas others have been left in the lurch. We have been covering the latest
developments in our Hot Talks as nobody gets any authenticated news but only
rumors and overheard talks. Keeping such postings in limbo only encourages
nepotism and corruption as candidates whose names are floating to be approved have to
continuous keep their political bosses happy so that there name is not dropped from the final list.
A Branch manager is expected to sit late, sometimes even for whole night, to complete a
proposal, but our PM, FM can sit on a file for 8 months for which interviews have been
completed and nothing is pending. Therefore, I am forced to say it is FARCE, FARCE
and only FARCE.
I can write many more instances of this FARCE, but may be, I have a taken VRS at only
AGM level (which is considered as a junior level when viewed by EDs and CMDs) and
thus many higher level officers may find it difficult to digest my writings. Therefore, I stop
here and once again quote below from the Business Standard article which I feel still
reflects my views in better words than what I would have written (as these are not my words,
I hope senior bankers will not curse me directly!!) :-
Conclusion : "So, for all practical purposes there is no framework for selection of the top
executives of nationalised banks. As a result, political parties step in to influence the decisions.
"You really cannot blame the bankers. This is a complete rule of the jungle and the
bankers often approach a political leader for a favour as there is no choice. Had there been
a uniform formula for selection, no one would have dared to seek help from the political
bosses," says an HRD professional in the banking industry.
In the private sector, either the CMD is groomed within the organisation and exposed to
various facets of banking before reaching the top, or headhunters look for the right candidates
once the incumbent CMD calls it a day. A series of interviews and group discussions spread
over weeks or even months are the necessary ingredients of the selection process.
And once the CMD takes over, the board continuously evaluates performance.
In stark contrast, the performance of executives of nationalised banks is under the glare of the board till the level of EDs, and once an ED becomes a chairman, people stop looking at his report card".
I am thankful to the author of the original article Tamal Bandyopadhyay, who made my life
easier as I do not have to search for the right words for the concluding remarks.
There has been no change in last 7 years, I do not know how long it will take to bring
changes for the good in banking industry. I also know that there is little chance that
my article will bring any immediate major change. But we will continue to create
awareness and fight for transparency in our system. I hope at least some readers
will continue to support us in this endeavour.
Will New IBA Chairman Be Able to Check the Group of Cunning & Manipulator Officials at IBA
The way various issues relating to HR have been handled by IBA in recent times, it has become very clear that a group of officials of IBA are not only big manipulators but also extremely cunning. Therefore, there is a need for all the bankers and union leaders to the cautious and there will be need for hard bargaining on the text of the Xth BPS.
IBA can delay the negotiations by months or even years together on the pretexts like
"IBA does not have the mandate of the member banks" or
by not giving time to UFBU leaders even for a meeting till a strike is slapped on the face of IBA. All this has happened in very recent past - only a few weeks back. The credibility of the IBA in the eyes of general banker is at the lowest in recent times.
IBA can delay the negotiations by months or even years together on the pretexts like
"IBA does not have the mandate of the member banks" or
by not giving time to UFBU leaders even for a meeting till a strike is slapped on the face of IBA. All this has happened in very recent past - only a few weeks back. The credibility of the IBA in the eyes of general banker is at the lowest in recent times.
A new Chairman has taken over the guards at IBA on 1st October, 2012. People usually pin hopes for betterment as and when there is a change at the top. In this case also, bankers have great hopes. However, the feedback which our website receives through emails and otherwise, is not highly encouraging as it appears that in recent months the staff, specially officers staff, have been given raw deals in the matters of not only postings but also charge sheets in the bank. There appears to be lot of discontentment among the officers in the bank. We would like to quote some words from one of the emails received at ours through an officer who had a long association with the said Bank. The email, inter-alia reads:-
"Ever since the CVO joined, disciplinary action against employees in general and, officers in particular, have assumed alarming rate and proportions. Alarming Rate -- I mean the number of cases e.g. as of now, the number of charge sheets issued and pending at different states against S-IV & above officers is 250 (yes, two hundred fifty) and many staff side cases are pending which MAY OR MAY NOT culminate in initiation of disciplinary proceedings. Alarming proportions -- I mean harshness of penalty imposed -- say where minor Penalty would have met ends of justice,imposition of major penalty; or, where reduction by one or two stages in time scale would have met ends of justice,imposition reduction of pay by six or eight stages; or, where demotion to the next lower grade would have met ends of justice, imposition of penalty of demotion of a Scale III officer to Scale I WITH ADDITIONAL RIDER THAT FIXATION OF PAY IN THE LOWER SCALE I WILL BE AT THE INITIAL BASIC PAY (ie. JMGS I) which is against the guidelines of IBA .
The above situation is due to the fact that the CVO either had no exposure to disciplinary ACTION / vigilance matters OR he is whimsical. Secondly, the CVO is supposed to work under the CMD of the Bank. CMD is not interested to look into this serious issue as he is also a rankoutsider and is not interested in the career development of native officers".
The feedback received from other sources also confirms the above. We also understand that this problem has even started in even the biggest bank of India, as recently some unions have issued circular in this regard. However, we leave it to the readers to recheck and get their own confirmations as to whether above facts are true from their close friends and form their opinion as we do not wish to influence your opinion. We have flagged this issue merely to caution the top brass of these banks about the present perception that is being built among the officers class. With our experience, we know there are hardly any officers who can share such frank opinion with their bosses during their service or even after retirement. If this perception is correct, then there is a need for immediate corrective steps. Failure to take appropriate steps immediately can result in large scale unrest and will directly affect the business of such banks.
The general perception about him was undoubtedly that of a simple and well behaved CMD (a rare trait these days). but there is also growing feeling that he frequently fails miserably to notice the manipulators down the line. Even if he notices these, the damage has already been done by that time by such people. These manipulators are able to easily convince him against even good people and then action is initiated against those bankers who are hard working but do not indulge in flattery and do not join the groups of such manipulators. This has undoubtedly affected the moral of officers. This should be a wake up call for the top brass across the industry in general, and specially among the banks we are talking about.
With above background and perceptions, there is every danger that things will not change at IBA level easily. The attitude of officials of IBA till date has been exceedingly manipulative and cunning and thus this simple natured new Chairman may here too fail to notice this negative attitudeof IBA and may be swayed by twisted facts .
The negotiations for Xth BPS are just round the corner and the new Chairman can play a great role for the benefit of the bankers. Union leaders need to understand the attitude of IBA and make it clear that this time they mean business and not lolly-pops. If they wish that bankers should get an honourable settlement, it has to be ensured that it is clinched before the next General Elections (These can be held any time in 2013). Any delay beyond the elections will not bring an honourable settlement as this government is already facing the fiscal crunch and will be soon askingthe banks to shell more in the shape of dividends, rather than looking for welfare of the employees.
However, we needs to be optimistic and hope the new IBA Chairman will understand better the problems faced by serving as well as retired bankers at the industry level and not merely at bank level. This is a bigger challenge than handling the issues at bank level.
There is lot of discontentment among the retired bankers, specially among the leftover bankers who have yet to get 2nd pension option as IBA is not ready to concede inspite of GoI guidelines clarifying the issue in July 2012. It appears now IBA officials are sitting on false ego issue. New IBA Chairman needs to address the issue on priority basis as the reports indicate that DFS has again asked IBA to take action as per the letter dated 25th July, 2012. We quote below message that has been attached to circular No 10 of AINBOF issued by Mr Harvinder Singh
FLASH: Department of Financial Service has reiterated its stand on pension to left outs. In a communication to IBA D.F.S. has asked IBA to take action as per the letter dated 25th July, 2012 under intimation to D.F.S. We hope that IBA will now advise member banks to extend pension facility without any distinction between retirees and those retired on superannuation.
We, at AllBankingSolutions.com hope that the message of this Article will reach the new IBA Chairman and he will take appropriate steps to show the door to manipulators and cunning officials of IBA who by their recent acts have hugely dented the reputation of IBA. If he fails in this duty, his reputation is certainly going to take a bigger dipper within his bank but also among the bankers across the industry.
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