Bankers on warpath: What next?
Bank employees are the architects for fulfilment of all government aspirations.
Come June 12, the United Forum of Bank Employees, representing the one million strong bankers of government banks, in a meeting in Chennai will decide the next course of action after the last national strike on May 30-31, and this time, the Forum may even decide for an indefinite banking strike in India, as the last resort.
More than a week ago, the nine trade unions of government bank employees, 4 being of officers and 5 of others, had gone for two days long strike after they rejected the Indian Banks' Association's (IBA) proposal for a 2 per cent hike in wage. The salary-structure of the bank employees is fixed through a bi-partite settlement, unlike Central and State Govt employees. After every 5 years, the salary is hiked for protection against inflation. The last settlement was for the period 2012-17 was of 15 per cent, which was not matching with the then 6th Pay Commission. But this time the increment for the period 2017-2022, which came only a few weeks ago, seven months delayed, the employees expected a parity with the new 7th Pay Commission of the Central government, but rather was offered merely 2 per cent on the plea of low profitability of banks.
The 2 per cent wage hike will cost banks approximately Rs 500 crore, while the proposal given by the unions will cost around Rs 12000 crore, and this is surely open to negotiation. IBA and the Central government are linking it with the profitability but there was no hesitation to write off Rs 2.41 lakh crores in last 3 years, and gross NPA (non-performing assets) stands at Rs 6.41 lacs crores today, according to RBI figures, which was around Rs 3 lacs crores in 2014. For the last four years, banks have been earning operating gross annual profits ranging from Rs 1.3 lacs crores to Rs 1.6 lacs crores, but net profit is wiped out due to the bad loans, given not at the whims of employees and the faulty provisioning norms, but through political decisions.
As per RBI data of March 31, 2018, NPA of government banks amount to Rs 6.41 lacs Cr, of which Corporate Industry NPA is around Rs 4.7 lacs Cr (73 per cent), Agriculture Sector NPA is Rs 57,000 Cr (9 per cent), Services Sector NPA is Rs 85,000 Cr (13 per cent), and Retail Sector NPA is around Rs 24,000 Cr (4 per cent). It is important to note that the Corporate Industry Loans are sanctioned by government-appointed Board Level Executives to corporate bodies like Bhushan Steel, Lanco Infra, Essar Steel, Amtek, Monnet Ispat, Reliance, Adani groups, and to people like Nirav Modi, Vijay Mallya, et al. Agricultural NPA is mostly due to Farm Loan Waiver policies by elected governments just before or after elections, and so such borrowers misuse loans as they have a sense of political entitlement. Services NPA is mostly like MUDRA loan, where the current Central government bars Banks to take collateral, and hence Banks cannot recover and the borrowers happily default. Retail NPA, accounting for around 4 per cent of all NPAs, is the only NPA where a common branch level Banker makes a sanction in form of Housing, Car, Personal Loan et al. Hence, the one million bank employees feel cheated today to be punished for the results of political decisions.
Interestingly, the government is not complying with the recommendations of its own appointed standing committee that the corporate deliberate defaulters' names should be published and the accountability of the board representatives be fixed as to who have given green signals for sanctioning loans to the deliberate defaulters.
Further, the bank employees are the architects for fulfilment of all government aspirations through successful implementation of Atal Pension Yojana, Pradhan Mantri Awaas Yojana, Adhar-bank account linking, Mudra loan, Stand Up and Start Up projects funding, Jandhan accounts and the Herculean work following the ill-advised demonetisation, during which some 19 bank employees died on duty.
There indeed should be parity, co-relation, uniformity, and relativity of our salary with others in insurance and other sectors of the government, matching with the status and the risk, responsibility, accountability, and transferability we are to undertake. Further, the dissenting employees' charter of demands has asked for a five-day working week and more facilities for women employees.
As matters stand today, the issue of the banking employees is assuming a national proportion and in an economy which clocks around 6 to 8 per cent annual inflation, there is no justification of 2 per cent salary increment for all bankers as a constant for half a decade to come.
(Prof Ujjwal K Chowdhury is School Head, School of Media, Pearl Academy, Delhi and Mumbai, and is a commentator on various issues of Indian political economy. The views are personal)