January - 2018

Vol. 38 No.1 Single Copy : RS. 4/- JANUARY - 2018

3NATION FIRST, ORGANISATION NEXT, INDIVIDUAL LAST

HOPES AND ASPIRATIONS

2018 HAS ALREADY ARRIVED. It’s a momentof Joy………hopes, aspirations and expectations.The year is expected to resolve many of ourissues which have been longing for a resolutionsince the last several years.The members allover the country wanted the Salary Revisiontalks concluded well before the expiry of the10th Bipartite Settlement. But the efforts tospeed up the negotiations did not meet theexpectation of the union.The talks are still inpreliminary stages and it may take a few morerounds of meetings, but should happen duringthe year 2018. Member’s desire of getting therevised salaries shall be fulfilled early.Thechallenge of getting “5 days week”,improvementsin superannuation benefits, Mediclaim insurancebenefits to lady officers and ofcourse a goodpercentage hike along with all other allowancesare in the mind of the federation. We will worktowards ensuring success.

MOODY’S RATINGS

The economy has recovered from the varioussetbacks and the growth trajectory is back andis being appreciated by international ratingagencies. But the micro economic situation in

2018A YEAR OF EXPECTATION

MAY NEW YEAR BRING HAPPINESS AND PROSPERITY TO ALL OUR MEMBERS

respect of the working class as well as themillions and millions of people living below thepoverty line does not reflect this jubilation bythe media about the rising expectations of thegrowth trajectory aimed at achieving a GDPrate of around 8% in the near future.

The labor situation in the country is grim. Theeconomic prosperity claimed by the championsof the globalization is not reflected in the livingstandard of the common man. The growth doesnot project the growth of employment. Anygrowth without a matching creation of theemployment opportunities is a meaninglessgrowth. The 90% of the country’s wealthcontinues to remain with 10% of the populationand they continue to prosper at the cost of the90% of the population. The promise of job forall still remain on the wish list of the Government.The series of labour legislations that are beingbrought in by the Government will only supportthe corporate world. The MNC’s are here toexploit the cheap labor, make huge profits andleave when they are exhausted of making furtherprofits.

STRUGGLE BY THE WORKING CLASS

The Central Trade Unions have been campaigning

Editorial

SUCCESS AWAITS AT THE DOOR WHERE DILIGENCE IS

Officers' Cause, January - 2018 4

against the raw deal to the working class by theGovernment. The Confederation has been in theforefront of all these initiatives and has beenplaying an important role in espousing severalpublic causes aimed at the welfare of the commonman in the country. Our participation in the variousprograms undertaken by the Central Governmentand also initiatives by the Confederation hasbeen well appreciated by the Central TradeUnions, Federations and various otherAssociations. A beginning has been made to revivethe mobilization of the supervisory cadre in allsectors of the economy.The Confederation hasopenly came out in support of the struggle launchedby the employees in the IT Sector – who are theprime target of victimization by the owners ofthe IT industry.The employees are beingthreatened for participating in the legitimatetrade union activities bringing back our oldmemories of the banking industry where thesupervisory cadre had to relentlessly struggleto form trade unions and establish industrialrelations machinery through continuous agitations,protest actions including the strike action formore than 50 years.

PERFORMANCE OF BANKS – NPA’S MENACE

The Banking Industry is passing through a crisis,bogged down with huge NPA’s. There are severalattempts to wipe out the NPA’s and draw a cleanbalance sheet. It can come only at a cost. TheBanks are expected to take a huge hair cut andsuffer a loss. But this cannot be held againstthe Employees and Officers in the bank whiledeciding their legitimate raise in the salary scalesduring the current negotiation. The attempts ofthe Government, RBI and various otherinstitutions are to favour the corporate unitsthrough legalized write offs. The tax-payers’money as well as the hard earned profits of theBanks are squandered through the current processof recovery.

The Confederation has done a wonderful job incarrying out continuous campaign against the illadvised moves of the Government in regard tothe soft corner shown towards big borrowersand also the proposed moves of merger of banks.The consolidation process for which theGovernment is championing cannot be supported

by the unions in the Banking Industry. TheFederation has been lending its total supportto all such moves, and extends all support inthis campaign.

MERGER OF BANKS WITH SBI

The Federation was successful in handling someof the burning IR issues in the year 2017 andthe residual issues in particular the normalizationof the situation arising out of the merger ofAssociate Banks and Mahila Bank with StateBank of India. The last 9 months gave enoughopportunity to the Federation to espouse theircause and workout a smooth integration of theAssociate Banks with State Bank of India.There are issues concerning the service conditionthat would be a priority for the New Year forthe Federation and it would take up effectivelywith the Corporate Center to ensure that theintegration process is completed without muchrumblings.

UNITY IS OUR STRENGTH

The Federation has its own agenda for theyear 2018. It will not allow the Managementto divide the Officers on the basis of grade/scale and will force the management to providea total mandate to the IBA for negotiations onall the 7 scales as per the tradition that wehave established over a period of 40 years ofnegotiations with the IBA. The Federation isconfident that the senior comrades wouldcontinue to participate in all the activities andfurther consolidate our movement under thebanner of the Federation. At the Bank levelall the issues which are left over would betaken up in the current year Central NegotiatingCouncil meetings to reach a logical end.

The Federation will give special attention tothe Welfare facilities of the Officers andensure that the quality of the work life of theofficers’ fraternity is further enhanced andthe Officers are able to give sufficient timefor their family requirement including education,marriages and education etc., of their wards.The Bank has already issued a detailed circularabout the work-life balance in the Bank andthe Federation will ensure that the circular

ARISE, AWAKE, STOP NOT TILL THE GOAL IS REACHED

5 Officers' Cause, January - 2018

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instructions are followed in letter and spirit bythe Management.

DEPLETING WORKFORCE

Yet another area of concern is the pressurecreated on the Officers fraternity. For thelast one decade, there is no addition to theofficers strength.On the contrary,theretirements have increased, the Federation isconstantly taking up the question of recruitmentof Officers in the Bank. The expansion coupledthe compulsion of cross selling of several productshas become a big burden on the Officers inbranches. Technology upgradation on a continuousbasis and making the lower level officers at theoperational level accountable for large advanceshas created fear psychosis amongst theofficers. The Federation has been constantlyraking up these issues with the Managementand has been insisting that the work pressureand the tension that has been created on theofficers in reaching the targets of deposits,advances and more so the cross selling will haveto be looked into from the practical angle andthat no hardship should be caused to our membersin particular in the matter of promotion,placement etc.,

FUTURE CONSOLIDATION

The Federation is planning its consolidation forthe next 5 years considering the vast expansionof the business growth, the technologicaladvancement by the bank, the opportunitiesavailable in the new financial sectors in thebank. There is a need for revisiting some of theprovisions of the Promotion, Transfer Policy,the facilities to the leaders of the Associationsand Federation who are the real partners inthe progress of the Bank and to ensure thatthe legitimate rights which the Federationenjoyed all these years would continue to beavailable for the Association and the Federationin the days to come.

NEED FOR IMMEDIATE APPOINTMENT OFOFFICER DIRECTOR

The Federation is not having its representativeon the Board for a long time. The Banking isloosing the experience of the leaders of the

Federation who had contributed a lot for theprogress of the Bank through their effectiverole in the Central Board of the State Bank ofIndia for a long time. The position is vacant formore than 2 years despite our continuous followup and appeal to the Management as well as theGovernment. The Federation will take up thisissue on priority basis in the New Year and seethat our representative is on the Board.

TRIPARTITE TO BE REVIVED

The Federation believes in co-operation andcollaboration in the Management of the Bank.It has been the pioneer in ushering a new era oftripartite relationship in the Bank wherein theStaff Federation, the Officers’ Federation andthe Management came together for the progressof the Bank. The tripartite is almost 25 yearsold and proved success whenever there was aneed for moving together in taking the bank gogreater heights of glory in the past. Let usrevive the spirit of tripartite relationship sothat the bank is benefited, the workforce isbenefited and the society as a whole is benefitedin the process.

WISH LIST

The wish list is a long one. The Federation willendeavor to resolve the maximum number ofissues and ensure the overall welfare of theOfficers’ fraternity in the Bank. The wish listbecomes a reality only when the membershipacross the country rally round the Associationsand the Federation in dreaming and cherishingthe same vision with their continued supportand co-operation in all our campaign.

Amidst all the challenges and constraints, thebank has to grow. If the bank grows, we grow.Therefore let us all put our heads and handstogether, work sincerely, garner quality business,reduce the NPA’s and ensure that bank scalesgreater heights of glory amidst all thecompetition.

“Officers’ Cause” takes this opportunity toconvey their Good Wishes for Happy, Healthyand Prosperous New Year to all the membersand to their families in the year 2018.

Officers' Cause, January - 2018 6WORK IS WORSHIP , DO YOUR DUTY

he usual enthusiasm and joyous mood prevailsall over to warmly welcome the new year. A

look back and analysis of the year may be helpful tounderstand what is in store for us in the coming year.The year 2017 commenced with a tough period forthe bankers all over the country who became targetof the public wrath due to the implementation ofthe demonetization of ` 500/- and `1,000/- notesresulting in a huge rush in front of all the bankbranches irrespective of the place where the bankwas situated.

BANKING: The bankers withstood the pressure andmanaged the challenge in an admirable mannercommanding all round applaud, including theappreciation of the Prime Minister for the excellentmanner in which the whole scheme was managedby the bankers throughout the country. The mediaboth print and electronic were covering day in andday out, the entire episode. The operation was beingmonitored by the Reserve Bank of India at theinstance of the Government. More than 75 circularswere issued in a short period of 2 months to monitorthe situation. Nevertheless the Bankers came outvictorious in the implementation of the scheme.

NPA MENACE: The performance of the banks’ cameinto a sharp focus in view of the growing NPA’s andthe need for additional equity which was promisedby the Government, but not forthcoming. The NPA’shave touched a staggering figure of about ` 7.34lac crores in the process. Government intended toinitiate the recovery of NPA’s through Insolvency andBankruptcy Code and subsequently a directionthrough RBI for initiating recovery procedure inrespect of few accounts with a huge NPA’s. Theresolution is not easy. The Banks were told to beprepared to take a hit to the extent of 50 to 80% ofthe outstanding which was affecting the equityposition of the banks. Basel Norms required to beobserved. It is at this stage, the Government cameforward to offer equity support to the extent of `2.11lacs crores.

IMPACT OF GST: One of the major decisions of theGovernment was implementation of GST with a viewto introduce single point taxation in the country.There were lot of initial hiccups which were

YET ANOTHER YEAR COMES TO AN END2017 PROVED A TOUGH YEAR FOR BANKERS

managed by the GST Council and periodical reviewof the implementation. The opposition united incriticizing the Government for the hasty mannerwith which the scheme was implemented by theGovernment.

2G SCAM CASE BEFORE THE SPECIAL COURT:The Special Court acquitted all those who wereprosecuted for the scam by CBI and ED enforcementin a judgment pronounced at the fag end of theyear.

FOREIGN POLICY AND ELECTIONS: The NDAGovernment made all efforts to improve itsrelationship with our neighboring countries. TheIndo-Pak relations continue to remain strained. ThePrime Minister’s visit to US and other majorcountries helped in projecting the image of thecountry as an advancing economy and were willingto extend co-operation with all those countries whoare willing to have trade relations with India. Theirritation of China and its attempts to createproblems in the border areas continue unabated.

The NDA also won the State Elections in both,Gujarat and Himachal Pradesh, which had arouseda lot of interest in the country in the light of thevarious political decisions that were taken by theGovernment in particular the de-monetization andthe GST Implementation.

LABOUR LEGISLATIONS: In the area of laborfield, the Government initiated several moves toamend the Labor laws which included the MinimumWages Act, the introduction of restrictions onProvident Fund, Industrial Relations Bill etc., whichwent into rough weather due to the strongopposition by the AIBOC and Central trade Unions.The Government at last placed the amendment tothe Payment of Gratuity Act 1972 revising the ceilingfrom `10 lacs to ` 20/- lacs a move awaited by theworkforce since long time.

CENTRAL TRADE UNIONS – CAMPAIGN: TheCentral Trade Unions carried forward its campaignagainst the ill moved actions of the Government inregard to the Privatization of the Public Sector Unitsin particular the Banks in the Public Sector. The

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LET CUSTOMER SERVICE BE OUR MOTTO

5 Officers' Cause, January - 2018

Government succeeded in its attempt to merge allthe Associate Banks as well as Mahila Bank withthe State Bank of India with effect from 1st April 2017.It was a major move on the part of the Governmenttowards the consolidation of the Banking Industry.

INDUSTRIAL RELATIONS IN BANKS: The majorissue concerning the Banking Industry was thediscussions on the Charter of Demands submittedby the United Forum of Bank Unions. There are nomajor developments as regards the negotiations areconcerned except the four Sub Committee meetingson Residual Issues and Disciplinary matters. Theissue of truncated mandate and the resolution ofthe residual issues of the last bipartite negotiationscontinue to remain unresolved due to the failure ofIBA to effectively take up the matter with theGovernment. There were a number of meetingsbetween the Small Committee and the constituentsof UFBU to take forward the negotiations but so farno definite clue is available as regards the truncatedmandate, the proposal of the IBA in regard to theincrease in the salary etc. The issue may figureprominently in the next rounds of discussions.

SITUATION IN STATE BANK OF INDIA: TheFederation has been able to constantly follow-upall the major issues that are pending with theManagement during the Central NegotiatingCouncil Meeting. The Federation was bogged downfor the major part of the year, in ensuring the smoothimplementation of the merger process of theAssociate Banks with State Bank of India and inattending the fall out issues affecting the industrialrelations in the Bank. The integration of the Officersfraternity with that of the State Bank of India at ashort notice was not without problems. Many issuesrelated to mergers were taken up for litigation andthe Management assured the Hon’ble High Courtat Hyderabad all the issues connected with theservice matter will be looked into, and an interimorder was made by the Court to this effect. However,the issues which could not be resolved by mutualunderstandings hence would continue to be litigatedin the High Court of Hyderabad.

The issue of placement, the promotions, theimmunity of transfer to the office-bearers, the mergerof the smooth integration of the Associate BanksUnits with the Circle Associations in different circlestook considerable time of the Federation and we

could resolve in a smooth manner. The dailyfunctioning has been streamlined in the Circleswhere the Head Quarters of the Associate Bankswere situated. The rationalization of the branches,closure of overlapping branches, the integration ofthe accounts, the HR related issues integration etc.,are still on.

CENTRAL NEGOTIATING COUNCIL MEETINGS:The Central Negotiating Council Meetings alsocould not transact much business in the beginningof the year since several issues connected with thePromotion Policy etc., became a bone of contentionbetween the Management and the Federation. Afew rounds of exclusive meetings were held on allthe contentious issues in order to move forward andensure that the promotion process is not affected.The Management agreed to look into a number ofsuggestions made by us in the process.

WORK LIFE BALANCE – REMOVAL OFANOMALIES: The last CNC meeting was asignificant one for the reason that the Managementacknowledged the demand of the Federation forproviding relief to the officers from attending theoffice on holidays including 2nd and 4th Saturdays.The Bank came out with clear instructions, thatcalling of the officers on holidays and 2nd and 4thSaturdays should be avoided and the officers shouldbe allowed to have quality of life and spend thetime with their families. The Bank also insisted thatthe controllers should not cancel the leave appliedfor availing leave fare concession etc. This came asa great relief and vindicated the stand of theFederation that the officers are being subjected toharassment and they should be able to enjoy theirleisure time with the members of the family and toattend to their family requirements.

The last CNC meeting as also considered severalissues extending the parity to the members of theerstwhile Associate Banks in particular the HousingLoan etc. These decisions extended a lot of benefitto our colleagues from the erstwhile AssociateBanks. Apart from the above, the historical benefitof extending medical assistance to the extent of100% to the family members was also achieved.The extension of repayment of vehicle loan beyondretirement, introduction of the vacation leave policy,the bereavement leave, etc., were some of therecent achievements.

BE TRUTHFUL, BE FEARLESS

Officers' Cause, January - 2018 8

AIBOC: We are happy that the entire year we werepart of the various activities meant for theconsolidation of the working class and also inextending our moral support to the struggleslaunched by the Central Trade Unions criticizing theill-advised moves of the Government and its attemptto privatize the Public Sector Banks. The Federationas the major constituent of AIBOC, participated inall the campaigns undertaken by the leadership ofAIBOC, led by Com.D.T.Franco, as the GeneralSecretary of the Confederation.

The All India Bank Officers’ Confederation underthe leadership of Com. D.T. Franco Rajender Dev,our President and Com.Dilip Saha has been takinggreat strides. When the Government perceivedcertain Banks as weak Banks, the AIBOC drew up aturnaround plan ahead of the respective BankManagements and thwarted any attempts on undueintervention. Because of the opposition to mergersby the AIBOC along with the UFBU and other centraltrade unions, the process has been put on holdtemporarily. The blatant introduction of variousamendments to labour laws has also slowed down.The greatest success of the AIBOC was the gloriousfight against the FRDI bill which has been deferred.

The pressure mounted for the enhancement ofgratuity limit along with our Federation has yieldedresults. The efforts to clinch an early wage settlementwith an unconditional mandate and improvementsin superannuation benefits will continue along withthe all out efforts to achieve the ‘5 – Day week’.The National youth conventions at Kolkatta, theWomen’s Convention at Mumbai and the efforts toput in place the ‘People’s Parliament’ are laudable.The consolidation of all financial sector trade unionsin the form of the All India Public Sector and CentralGovt. Officers Confederation (AIPOC) will lendfurther flip to the trade union movement.

FUTURE OUTLOOK: The Federation is fully gearedup to pursue all the major issues confronting thebanking industry in particular the salary revisionnegotiations. The Federation will continue to extendall co-operation and support for the issueschampioned by the Confederation and also the neworganization set up by the initiative of theConfederation. To ensure that the salary revision isconcluded in good time so that the new scales couldbe implemented without loss of much time. TheFederation appeals to all the members to continueto extend their valuable support in our struggle sothat we should be able to make our contribution forthe growth of the economy as well in the process.

ederation has sent a communication to themanagement requesting them to review the

creation of Aadhar enrolment Centres within the Bankpremises and in case the same is not feasible at thisstage, Circles may be permitted to engage the retiredOfficers or outsource the verification and

AADHAR ENROLMENTVERIFICATION & AUTHORISATION

BY OUR OFFICERS

authorization work so that our officers can attendto the customers and dedicate themselves to theother urgent priorities of the Bank during thelast quarter of the financial year and also toensure that the CDS scores of the officers are notaffected.

RENEWAL OF MEDICAL INSURANCE SCHEMEAN EXHAUSTIVE COVERAGE – RELEASE OF SUBSIDY TO TAKE CARE

OF HARDSHIP ETC.,The Corporate Center has to-day come out with acircular advising all our Pensioners and Familypensioners about the renewed Medical InsuranceScheme obtained from the United India InsuranceCompany, after detailed deliberations, in order toensure that the Pensioners and Family pensionersget a fair coverage.

2. Members may recollect that one of the subjectstaken up in the Central Negotiating Committee

Meetings, in particular in the last CNC, was theimprovement in medical facilities to the serving staffas well as retired officers. The Federation has beeninsisting that the Management should take care ofthe health requirement of the retirees and theirspouses since they have given their blood and sweatto the organization during their services in the bank.The premium amount was very high and thefederation insisted upon continuation andenhancement of subsidy and also given a number

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OUR LIFE IS WHAT OUR THOUGHTS MAKE IT 7 Officers' Cause, January - 2018

of suggestions to the Management for considerationwhile deciding about the various provisions forrenewing of the Federation the Medical InsurancePolicy. The Bank has considered few of the suggestionsof the federation and accordingly released a detailed

circular which takes care of the subsidy.

3. There are many other issues in respect of theMediclaim which we are taking up separately forfurther improvement.

STAFF MISCELLANEOUS BEREAVEMENT LEAVE

ne of the subjects that has been underdiscussion since the last couple of years was

the advance to be given to the spouse/dependentof the officers to meet emergent funeral expensesin case of the unfortunate death of an officer. Thissuggestion of the federation was accepted andcircularized on 7.5.2016. Along with thatsuggestion federation had also requested for abereavement leave to be given in case of an

unfortunate death of the family member of theofficer.

The Management has accepted the suggestion andintroduced the concept of ‘Bereavement Leave’ videe-Circular No:CDO/P&HRD-PM/75/2017-18dated 28th December, 2017; which will go a longway in taking care of the formalities involved.

INDUSTRIAL UNREST IN FEDERAL BANKNOTICE OF STRIKE BY ALL INDIA FEDERAL BANK OFFICERS‘ ASSOCIATION

ON 1ST & 2ND JANUARY 2018

he industrial relations in Federal Bank havedeteriorated which is causing apprehension and

concern to us as well. Being a member of the IBANegotiating Committee, the management has beenimplementing ideas which are not accepted in theNegotiation due to which the time-tested goodpolicies and norms are given a go-by at the drop of ahat. Instead of the well-established, equitable andjust policies followed hitherto, the highly monetized,greed-promoting and destructive polices are beingintroduced in the institution which is highlydemoralizing for the officers. Whereas the neatly

formulated goals and fair and equitable rewardsystems had been the motivating factors for theEmployees and Officers, unilateral and discriminatoryreward systems are being recently thrust upon themto create division and also serving as a dampener intheir drive to achieve good results.

AISBOF with more than one lakh officers hasextended its total solidarity with the federal bankofficers along with AIBOC against the unilateralmoves of the management.

rop insurance has been a positive move forfarmers but more steps might be announced

by the government soon, says Rajnish Kumar,Chairman of State Bank of India.

On the expectation of the farmers he said what weare seeing is that there is some distress in the ruralsector and that is why the farm loan waivers in manystates have come. So there is definitely a need thatthe plan which the Prime Minister has said aboutdoubling the income of the farm sector by 2022 –so,some action is definitely expected in that directionand particularly, there may be a time to have arelook at the minimum support price (MSP).

On the question of food inflation if the MSP, is raised,

MSMEs WILL BE FOCUS AREA FOR BANKS- SBI CHIEF

he said that it is definitely an issue but it requires alittle bit more research and the people who workin the field whether the MSP if it is not raised andwhether we live with the lower incomes for the farmsector or (do) some balancing act where farmersget remunerative prices and in the process theremay be some hike in the food inflation. So it is avery delicate balancing act.

The second is, MSP is one way where the cost ofinputs farmer does not get compensated for that,then how do you ensure that farmers get aremunerative price or are able to recover their costs.So there has to be some way for this where theinflation is also controlled but at the same time thefarmers are not deprived of a decent income forthe hard work they do in the field.

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LET US BUILD A STRONG AND SELF RELIANT INDIA

Officers' Cause, January - 2018 10

On the question of agri finance and stressed assetsetc. the Chairman said.

We are not looking at any elevated stressed assets.In some of the states where the growth inagriculture finance because a lot of money cameunder agriculture debt, they were not necessarilyin NPA (non-performing asset) accounts, but overallbecause in Maharashtra and Uttar Pradesh therewas flow of money in the accounts. So at macrolevel or the consolidated level, our portfolio growththis time is lower than the last year. However, oureffort to renew the kisan credit card (KCC), that isgoing at full speed and the percentage of renewalsis much higher compared to the previous year.

On the question of MSMEs targets the Chairmansaid, MSME definitely is a focus area for thegovernment but let me also say that MSME sectorwill be a focus area for the banks also becausenow what we have realised (is) that earlier therewas a fear that MSME will have higherdelinquencies, but that is turning out to be is that

MSME is a better bet when it comes to the riskcompared to the corporate at least in the currentsituation. So that makes imminent business sensethat the flow of credit improves to MSME sector andthere are changes in the method of lending. Therewill not be any stress on MSME financing.

On the question of solving or reducing farmersdistress the Chairman said.

I have mentioned that remunerative prices for theircrops, that is one thing which comes to my mind. Sobasically once the farmers have the protection of anyloss on account of any natural calamities, once thatrisk is covered, and anyone who invests, whether itis a farmer or industry or anything, wherever youinvest money and you invest time and do labour,you expect a decent return on that investment. So itis fair that farmers are also given a fair deal as faras the MSP is concerned.

Excerpts from the interview given to MINTSource: Mint-20.12.17

resent social and economic unrest andagitation by the farmers in different states in

demand of farm loan waiver and other long termsolutions to farm sector have again opened thedebate for the rationale of such a populist measure.

The meeting of the Finance Minister and the PSBChiefs in the second week of June 2017 on NPAresolution has brought the farm loan waiver issueto the centre of discussion. Bankers are worried thatthere is a rising trend of farmers who refuse to cleardues. In a practical sense, the extent of loandelinquency by farmers is almost impossible toassess as it is the most conflicting issue with loadeddifferent judgements. What is more gruesome is thatsome section of print media is reporting that incertain states the delinquency rate of farm loan, asassessed by the bankers has breached 50 percent.As per the Census 2011, there are 11.9 crore farmersacross the country which is nearly 24.6 percent ofthe total workforce of over 48.1 crore. The poorperformance of the agriculture has resulted in adecline in the percentage of farmers from neatly 50percent of the total workforce in 1951 to 24.6percent in 2011. Thus, statistics clearly show thattoday farming is not a lucrative occupation; so

CONSEQUENCES OF AGRICULTURE LOAN WAIVER

much so it is not viable in most of the states.

Due to the inefficient market mechanism and lack ofgovernment support, farmers are finding it difficultto fetch a right price of their produce. The bumperRavi crops production this year has put downwardpressure on the prices of many a farm produce. As amajor part of seasonal agriculture, produce isperishable, lack of Storage facility in most of theplaces is compelling farmers to dispose of theirproduce at throwaway prices. The demand of thefarmers for a government guarantee on theprocurement of their produce and arrangement ofwarehousing facility is very genuine. With politicalbacking, the agitation of farmers in different statesfor farm loan waiver has spread like wild fire. Protestin Madhya Pradesh has taken the life of five farmersdud.ng the agitation, and the curfew order in the statehas brought the economic activity to a standstill. Thesame has been seen in the state of Maharashtra andis getting intense as farmers are dumping theirproduce on streets. In such a crucial economicenvironment, the economic loss of one day nationwidestrike is even not easy to afford by any lower middle-income economy.

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DUTY FIRST, RIGHT NEXT

9 Officers' Cause, January - 2018

Article

INCIDENCES OF FARM LOAN WAIVER: When weassess the impact of previous farm loan waiverswhich is deep rooted since the 1980s, we see thenegative consequences outweighing the positiveones. Loan Melas of 1980, 1986 and 1987, farmloan write-off in Haryana in 1990 followed byagricultural debt relief scheme of INR 10,000 toeach borrower in 1990 and the most expensive INR60,000 crore farm loan waiver by UPA government;have made a sharp dent in the finances of thecentral government and states. The burden ofagriculture loan waiver on the finances of some ofthe states: Uttar Pradesh (INR 36,000 crore),Tamilnadu INR 5,482 crore to small and marginalfarmers from cooperative banks and on April 4,2017, Madras High Court has ordered the TamilNadu government to waive off loans obtained byall farmers, irrespective of their land holding whichmay cost another INR 40,000 crore to the state),Andhra Pradesh (INR 40,000 crore), Telangana (INR17,000 crore), Chhatisgarh (INR 3,200 crore asinterest free loans), etc. Even today’ after threeyears, banks claim that they find it tough to recoverthe dues from the undivided Andhra Pradeshgovernment which had waived loans of over INR40,000 crore in 2014. Other poll-bound states areunder immense pressure to follow suit and mightannounce populist measures. The Maharashtragovernment has announced a loan waiver forfarmers and has formed a high-powered committeeto decide the criteria for debt relief. Similarly, as apart of poll promises, the Punjab government hasset up an expert panel to design the loan waiverpackage. To Control the unrest, the centre hasrecently enhanced the quantum of interestsubvention borrowing scheme benefit from INR15,000 crore to INR 20,000 crore along with INR432 crore for loans against negotiable warehousesupplies, INR 222 crore for post-demonetisationrelief.

FARM LOAN WAIVER AND 'MORAL HAZARD'The other consequence of farm loan waiver is ‘MoralHazard. The Comprehensive Committee report ofDr R Radhakrishna, on rural indebtednessemphasises that ‘the loan waiver scheme targets aselected group of farmers, and the problem is notwith the small section of farmers being benefited,but the fact that the potential of such a hugeamount of money is enormous and many morecould have been benefitted ‘. The loan waiver

scheme has certainly created a moral hazard situationin the banking sector, with increasing rate of non-repayment. It is even more discouraging for those‘honest ‘ farmers who have taken desperate measuresto pay back their instalments. Farmers anticipationof a loan waiver in the next election year is somehowdistorting the credit culture.

This loan waiver scheme has also created seriousdiscontent among the non-beneficiary group offarmers. Farmers who have invested out of theirsavings rather than borrowings are deprived of thebenefit of this scheme. Also, the scheme covers onlycrop loans, and farmers who have invested ininfrastructure would be discriminated against eventhough they have to pay back the loans out of cropyields only. Since many farmers borrow, from themoneylenders to repay their bank loans, it is verymuch unfair for these farmers to be excluded fromthe relief scheme as the scheme covers only formallending. It would be like penalising the honest farmerswho have been making regular repayments of theirdebts.

Increased pressure on state and centre financesFarm loan waivers are expected to adversely affectthe state government finances by increasing the deficitand worsening the quality of expenditure. It wouldalso challenge national balance sheet. Like thegovernment of UP has recently announced to issuebonds to fund the loan waiver, this will escalate overallgovernment borrowings which would push tile yieldson government bonds.

CASE FOR FARM LOAN WAIVER: From the moralground, agriculture loan waiver scheme earnstremendous support as agriculture is the backboneof Indian economy, and it is the duty of the state tosupport agriculture from subsistence to sustainablelevel. In a weak economic environment when thegovernment is ready to back the corporate sectorthrough various incentives including SEZs, tax-freeoperations, concessional borrowings and free landlease, etc, in such an environment farm loan waivershould not be such a big distorting thing if it is not arepeated event.

Among the set of formidable challenges faced byIndian agriculture; declining land-base for agriculturalOperations. depleting water levels, shortage of farm-labour, increasing costs of inputs and uncertainties

NEVER BEND BEFORE THE INSOLENT MIGHT

Officers' Cause, January - 2018 10

associated with prices /realisation that impact theviability of farming and its sustenance. A majorproblem of ailing Indian agriculture is the decliningefficiency of input use and thus, adversely affectingthe yield and profitability. At today’s scenario creditin agriculture has been given too much importancewhile other factors responsible for productivity havebeen ignored.

We need to remember that Agriculture occupiescentre stage in Indian economy embodying threethrust areas as (a) to promote inclusive growth, (b)to enhance rural income and (c) to sustain foodsecurity it accounts for nearly 14 percent of GDP and15 percent of exports and supports 54.6 percent ofthe population of the country (Census 2011). Thegross cropped area of the country is 20.1 crorehectares with a cropping intensity of 142 percent.The net sown area works out to be 43 percent of thetotal geographical area. India is the second largestpopulated economy with 129 crore populations.Given the alternatives to meet the growing food andother agricultural demands of the country’s risingpopulation the options available are either to expandthe net area under cultivation or intensify croppingover the existing area.

However the net sown area of the country has risenby about 20 percent since independence and hasreached a point where it is not possible to make anyappreciable increase. Thus raising the cropping

intensity (raising of a number of crops from the samefield during one agriculture year) is the only viableoption left.

Though the case of loan waiver is convincing,repeated farm loan events are creating an anomalyin the system. Repeated farm loan waiver isundermining the sound credit culture and is goingto put an additional burden on Indian banking thatis already loaded with the growing toxic assets ofthe corporate and widespread corporate loanrestructuring.

CONCLUSION : It is high time that the agriculturesector needs state support but loan waivers are notonly solution. The farm loan waiver scheme is unlikelyto produce lasting results in the development of farmsector as it would direct to a number of adverseconsequences including voluntary financialexclusion of farmers moral hazard issue to damagethe credit culture and ballooning fiscal burden ofboth state and the centre which would adverselyaffect the sovereign rating and may crowd outprivate investment in coming days etc. The sameamount of expenditure in addressing thefundamental reforms in agriculture and make itmarket oriented and profit centered could havebrought better result.

Bibekananda PandaExcerpts from his article

Source: The Indian Bankers,Sept.2017

SBI LOOKING TO SECTORS LIKE RENEWABLES AND ROADS TO BOOST LOAN GROWTH

State Bank of India (SBI) is exploring ways to expandloan growth to sectors such as railways, roads andrenewable energy, which are attracting higher publicspending said Chairman SBI.

The bank is also looking at investment opportunitiesin financial technology, or fintech, start –ups, saidthe Chairman.

The recapitalization of public sector banks, for whichthe government has announced a ` 2.11 trillion plan,along with higher public spending on infrastructure,will help in stimulating private investments in theeconomy. The state –run lender expects this to helpsmall and medium enterprises, a major source ofjob creation in the economy, said the Chairman.Indian banks, are also strengthening their risk

assessment systems based on their past experienceof failed projects they have financed. “Banks cannotstay away from financing projects. The methodologyand the processes in risk assessment will undergosome change.” added the Chairman.

To decisively deal with the `10 trillion toxic assetpile in the banking sector, the government has putin place a new bankruptcy regime and tribunals inaddition to empowering the Reserve Bank of Indiato nudge banks to take the lead in either turningaround failed companies or liquidating them andredeploying capital. The high quantum of non –performing assets has become a drag on thebanking sector, crippling its ability to finance newprojects.Economists said that although there is overcapacity

TIME AND TIDE WAIT FOR NONE

11 Officers' Cause, January - 2018

in certain sectors and that the downturn in theinvestment cycle is still persisting, the policymeasures taken will certainly help as the investmentcycle changes for the better.

SBI will continue to invest in adopting technologythat will give it an edge in operations as well asaccess to new markets, although it may render somejobs redundant.

The Chairman said the bank is “well entrenched”in the payment services space, with over 30%market share including in debit cards and e-wallets.‘We are in talks with many startups in financialtechnology sector where we are open to followinga partnership model. If someone has invested time,money and brain power and if the opportunity issuitable, we have no hesitation in joining hands,”

SBI already has partnerships with some e-commerceplatforms to provide working capital loans to those

utilizing such platforms to sell- products. It also hastie-ups with online taxi aggregators to provide loansto cab drivers quickly.

“We can either procure their technology, partnerwith them or invest in them”,

He also said that higher investments into highwaysand infrastructure will add more jobs in theconstruction sector. "What is probably not happeningin a big way is (investments) in sectors where thereis an over capacity,” adding that investor interest isimproving in the steel sector. The demand for steeland production capacity in the country are matchedand faster economic growth will further boostprospects for this sector.

SBI will make its services more sophisticated bytraining front –line employees in technology- addedthe Chairman.

Source: Mint-25.11.17

2017-III-LLJ-257 (SC)LNINDORD 2017 SC 10650

IN THE SUPREME COURT OF INDIAPresent:Hon ‘ ble Mr. Justice R.K. Agrawal andHon ‘ ble Mr. Justice Abhay Manohar SapreC.A. No. 3037 of 2010 13th July, 2017A.P.S.R.T.C., Rep. By Depot Manager AppellantversusG. Murali .... Respondent

Disciplinary Proceeding — Reduction of Penalty — Respondent/Conductor worked in Appellant/Corporation — During surprise check, it was found that passengers were issued tickets, but fare wasnot collected by Respondent — Disciplinary proceedings initiated and order of removal from servicepassed by Disciplinary Authority - On industrial dispute raised, Industrial Court reduced penaltyfrom removal of service to stoppage of three increments — Petition and appeal filed by Appellantagainst Industrial Court order dismissed — Aggrieved, Appellant preferred present appeal - Whetherorders passed by Industrial Court and confirmed by High Court, sustainable- Held order of IndustrialCourt exonerating Respondent from charges are on good grounds and do not call for interference –Passengers were not produced for cross-examination, when Respondent denied charges of collectingfare and non-issuing of tickets – No illegality in impugned order passed by High Court —

Appeal dismissed.

ORDER

Heard leaned counsel appearing for the partiesand perused the impugned judgment and orderdated 30th June, 2008 passed by the High Court

of Judicature, Andhra Pradesh at Hyderabad.

2. It appears that the respondent was working asa Conductor in the appellant-Corporation. On 16thJune, 1994 he was on duty as Conductor in Bus

Judicial Verdict

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No. 1199. A surprise check was conducted by theTTI who found that certain passengers have notbeen issued tickets, even though the fare wascollected by the respondent. The statements of thepassengers were recorded. Disciplinaryproceedings were initiated and the Enquiry Officerfound all the charges proved and order of removalfrom service was passed by the disciplinaryauthority.

3. The matter was taken by way of industrial disputebeing ID No. 189/95 and the industrial Tribunal-cum-Labour Court, Warangal vide order dated 30thDecember, 1999 had held that the charges 2 to 5stand not proved for the simple reason that thestatements of the passengers which were reliedupon by the appellant-Corporation was specificallydenied by the respondent and he had stated thathe had issued all the tickets for which the fare wascharged and the allegation that no ticket was issuedis false. The Industrial Court had held that as thepassengers were not produced in the enquiry, thestatement recorded by the TTI from the passengerscannot be taken in evidence, as no opportunity wasgiven to the respondent to cross-examine.Consequently, the Industrial Court had held thatcharges 2 to 5 have not been proved. So far as the

remaining charges 1 and 6 are concerned, it washeld to be proved and therefore the Industrial Courtreduced the penalty from removal of service tostoppage of three increments. The appellantchallenged the order by filing a Writ Petition beforethe learned Single Judge who dismissed the same.

4. Feeling aggrieved, Writ Appeal was filed whichwas also dismissed by the Division Bench of theHigh Court.

5. We have heard the learned counsel for theappellant and perused the impugned judgment. Wefind that the order of the Industrial Courtexonerating the respondent from charges 2 to 5 areon good grounds and do not call for anyinterference, as the passengers were not producedfor cross-examination specifically when therespondent had denied the charges of collectingfare and non-issuing of tickets.

6. We do not find any illegality in the impugnedorder passed by the High Court.

The appeal fails and is dismissed. No order as tocosts.

Appeal dismissed.