IBA keen on early settlement of wage issues with PSU bank employees

Mumbai, December 25: IBA has urged Bank unions to give up their agitation and to continue their negotiation and is keen on early settlement of wage hike issues of the public sector banks.

It has also requested all member banks to assess their paying capacity and advise them accordingly.

The United Forum of Bank Union (UFBU) had said that it would be holding a one-day all-India strike on January 7 followed by a four-day strike across the country from January 21-24.

An indefinite strike would be initiated from March 16 to achieve the demand, it had added.

PSU Bankers are paid poorly: SBI Chairman

New Delhi, December 11: Lamenting that bankers are paid very poorly in India, especially at public sector banks, SBI chief Arundhati Bhattacharya today said there is an urgent need to provide better remuneration to attract good talent.

Bankers are paid poorly in India as compared to their counterparts elsewhere in the world, she said.  “Let me start with income of banking professionals in India. Here, 70 per cent of the banks are in public sector and they are paid very very poorly compared to market,” she said at Delhi Economic Conclave here.

The SBI chief said there is urgent need to improve quality of board members by providing them suitable remuneration so that the overall efficiency improves.

“We are very blessed in that. SBI has invariably had very good quality board. But that may not be true across (other banks’) board. One of the reasons is very low remuneration that is given to the board directors,” she said.

“If you are trying to attract best in the field, they have to be remunerated accordingly. We must insist on people who are coming into the board having sufficient hands on experience in both planning and execution in their respective areas,” she said. So, this is something that government can easily implemented and should be done, she added.

The comments come about a week after PSU bank employee unions went to a four-day relay strike to press for early revision of wages.

With regard to governance, she said P J Nayak Committee has very clearly laid out certain roadmap as to how governance can be taken forward.  “I believe the government is looking at it. While they do look at it, I believe there are very some low-hanging fruits and those could be easily implemented within a short period of time,” she added.

Talking about changing regulation in tune with the present system, Bhattacharya said India has over 60 Acts and multiple rules and regulations that govern the financial system at the moment. “Many of the laws are from 1950s and 1960s. The banking regulations themselves they were established before ATMs, credit cards, internet banking, investment advisory, private banking, mutual funds,… whole lot of other things,” she said.

“These acts have been amended from time to time to keep pace with changing reality but the legal foundations have remain more or less static and as the result the framework is very complex and inconsistent,” she said. “Occasionally, it is also open to regulatory arbitrage. So, we need to look at these things also holistically and move the laws to be in tandem with the times,” she added.

With regard to improving governance, Bhattacharya also pitched for a good Whistle Blower policy with the objective to protect innocent and punish guilty.

“In the area of governance, its very important especially in the public sector banks to nurture and have a good Whistle Blower policy to ensure that people who actually give right information are properly rewarded and those who actually misuse the system they are penalised,” she said.

“We must free the public sector from the disgruntled and weapons of anonymous and superfluous complaints that they use. These complaints very often contain allegations that are totally full of lies but a lot of resources get tied up in looking into these things,” she added. Good people who have taken strong decision should not be unnecessary paralysed on account of false allegations, she said.

PSU banks decide not to hike rates

Jaipur/ New Delhi/ Mumbai, July 16: You need not worry about an increase in your equated monthly instalments after RBI’s late night action on Monday. The finance ministry has leaned on public sector banks that control around 70% of the business against raising rates to keep a large constituency of middle class and corporate borrowers pacified ahead of key elections. After all, for over a year now, the finance ministry has been prodding RBI to cut rates, while the central bank has refused to toe the government line. Instead, on Monday it signalled a reversal in policy to offset the impact of the weakening rupee by announcing several measures that will push up the cost of funds for banks.

While there were expectations of banks responding with hikes in the coming days, the finance ministry swung into action and impressed upon banks to maintain status quo.

By evening the impact was visible as banks started issuing statements, saying rates will not go up. “The measures taken by RBI are designed to curb speculation in the market and are not seen by SBI as indicative of any systemic problem or deeper malaise. It is, therefore, expected that the position in the market will stabilize shortly. Hence neither the management nor the board of SBI that met on Tuesday in Mumbai felt that this requires any adjustment of lending,” State Bank of India said in a statement. Taking a cue from the largest lender, others including Punjab National Bank, Bank of Baroda and IDBI Bank followed suit.

Earlier on Tuesday, finance minister P Chidambaram seemed to lay down the ground rule. While kicking off a pre-election campaign on government schemes, Chidambaram said he did not expect banks to raise interest rates. “These measures are intended to quell excessive speculation in the forex market, reduce volatility and stabilize rupee. They should not be read as a prelude to any policy rate changes,” he said. Admitting that the high current account deficit has made the rupee weaker, the finance minister said, “Given the current account deficit and the inflation, some depreciation of the rupee is expected. But sometimes there is excessive speculation in the foreign exchange market and the role of RBI is to ensure that volatility is cut.

The tight liquidity situation due to the recent measures raised concerns of growth being impacted. But the finance minister allayed such fears. “These measures will in no way affect our commitment to growth. We must increase credit delivery and stimulate growth.” He reeled off a number of reforms and initiatives taken by the government in the last four months to revive growth and reverse the policy paralysis that has stalled projects approvals.