Bank unions call for strike on February 28

‘Banks incurred huge costs incurred on

demonetisation, Jan Dhan & Aadhaar’

Coimbatore, February 7:  The United Forum of Bank Unions (UFBU) has given a call to its members to strike work on February 28.

The strike call, according to Thomas Franco, UFBU Convener and Senior Vice-President of the All India Bank Officers’ Confederation (AIBOC), is to voice their displeasure over the government’s indifference to their issues, which they contend “have accumulated and remain unaddressed.”

Alleging the government of remaining deaf to their plea even while they had stood by the government on different issues — be it handling the pain of demonetisation, implementing government schemes or opening Jan-Dhan accounts — the UFBU, represented by nine trade unions, said that “the government’s indifference had forced the employees and officers of various banks to take this extreme step.”

“We are on a war path after demonetisation,” he said, sharing a copy of the union’s 12-point charter of demands.

Demanding compensation for the losses due to Jan Dhan and demonetisation, Franco said banks incurred huge costs on account of opening 25 crore Jan-Dhan accounts, linking Aadhaar and providing RuPay cards.

“Demonetisation further added to the expenditure in various ways such as towards transit of withdrawn currency, security, disruption in regular banking activities and so on.”

Much of the issues were oft-repeated ones such as the demand to halt privatisation of public sector banks; amendment to the Gratuity Act so as to make gratuity uniform for all (Central government employees and those in the banking sector); appointment of employee director and officer director in public sector banks; recruitment; recoveries from wilful defaulters; and a stop to outsourcing of core banking business.

The UFBU Convener also insisted on the need for initiating immediate discussion on wage revision.

Black money estimates overshot as 82% of cash deposited in banks

About Rs.12.6 trillion had been deposited

into bank accounts as of 3 December

New Delhi, December 6 (Bloomberg):  Indians have validated 82 percent of bank notes rendered worthless by Prime Minister Narendra Modi’s surprise move last month, according to people with knowledge of the matter, undermining the government’s estimate of black money in the economy.

About 12.6 trillion rupees ($185 billion) had been deposited into bank accounts as of Dec. 3, the people said, asking not to be identified citing rules for speaking with the media. The government had estimated that about 5 trillion rupees of the 15.3 trillion rupees sucked out by Modi’s move would stay undeclared, implying that this was cash stashed away to evade taxes, known locally as black money.

Lack of a meaningful cancellation could be a double blow for Modi as the measure was being used as a political and economic gauge of the success of his Nov. 8 move. One of Modi’s biggest campaign pledges was to expose black money in Asia’s No. 3 economy, and economists were viewing the cash as a potential windfall for the government.

“Some of the windfall that the government was hoping for from the cancellation of notes will be dented,” said Anjali Verma, chief economist at PhillipCapital Ltd. “That means the fiscal stimulus that was being expected might also take some hit. That is not good news at a time when direct consumption, private investment is not expected to pick up.”

Private indicators published over the past week signal that the $2 trillion economy will be hurt by the cash clampdown. Economists have also slashed India’s growth forecast for October-December, imperilling the nation’s status as the world’s fastest-growing big economy.

‘Defeats the Theory of Black Money’

Finance Ministry spokesman D.S. Malik wasn’t available for comment. The rupee ended little changed at 68.22 a dollar in Mumbai on Monday, the benchmark stock index rose 0.5 percent and the yield on the 10-year sovereign bond fell to 6.22 percent from 6.24 percent.

“Markets are not too worried at the moment,” said Chakri Lokapriya, Mumbai-based managing director at TCG Advisory Services, which manages about $3 billion. “But if 12-13 trillion rupees comes back into the system it defeats the whole theory of black money.”

In such a situation where the gains of demonetisation aren’t apparent, individuals will more closely analyse the pain. A slump in demand due to the cash shortages will hurt company revenues and government tax collections, widening the budget deficit and ultimately weakening the rupee, Lokapriya said.

- Bloomberg