Tuesday, 30 May 2017

SBI should withdraw the steep hike in service charges immediately.

State Bank of India (SBI), the largest public sector bank in India and the largest bank in the world with regard to network, has set a bad precedent last week by announcing a steep hike in service charges on various categories and introducing certain new service charges.

The announcement was that from June 1, 2017, Rs 25 will be charged for every withdrawal from ATM without allowing any mandatory free withdrawal as stipulated by the RBI.  In view of huge protest from the Bank Employees Federation of India & other unions, general public through electronic and social media, SBI changed its earlier stand and informed that it was applicable for withdrawals for the buddy accounts through e-wallet which SBI is yet to introduce.

Apart from this, SBI introduced new charges for exchange of soiled notes exceeding 20 pieces and Rs 5000 by value at the rate of Rs 2 per piece or Rs 5 per Rs 1000 (plus service tax) whichever is higher from June 1, 2017.

SBI has already increased its charges steeply effective from April 1, 2017.
·         For non maintenance of average monthly balance ranging from Rs 1000 to Rs 5000 in rural to metro areas, fine ranging from Rs 20 to Rs 100.
·         For duplicate pass book Rs 100 and Rs 50 per page of 40 entries
·         For duplicate interest certificate Rs 150
·         For balance certificate Rs 150
·         For signature verification Rs150
·         Enquiries relating to old records (beyond 12 months old) Rs 200 per item up to two years and thereafter additional Rs 100 per additional year for each item
·         For each cheque leaf beyond 25 leaves in a financial year Rs 3 per leaf
·         For closure of savings bank account (after 14 days of opening) Rs 500 etc.
·         All these service charges/fine will attract 15 per cent service tax

Levying of these charges and fine on the ordinary customers by the SBI management is highly deplorable and should be withdrawn forthwith. 

SBI which was already in control of 25 per cent of the total business of the banking industry has now improved the same to 33 per cent of the total business from April 1, 2017 after annexing five subsidiaries in the name of merger with almost no competitor. The next public sector bank is Punjab National Bank with around 5 per cent of the business volume. The central government which always used to advocate competition and took that as a ruse to allow payment banks and small private banks, is fully behind this forcible merger which has been consistently opposed by the bank employees’ movement as it would harm the interest of the customers and the general public.

Due to this monopolistic character, SBI management has begun a war on the common man and the SBI clients numbering around 25 crores, in the name of service charges and fine.  This would set a bad precedent for other public sector banks to follow in the name of earning profit and survival in the market.  Altogether the economically weak clients of the public sector banks will be put to untold sufferings and miseries. The minimum average monthly balance of Rs 5000 in metro cities is equivalent to five months’ old age pension or widow pension or one month wage of an unorganised worker.  Does the SBI want these people to keep this balance forgoing their livelihood for months together? Or else will it fine them with Rs 100 per month?  This is really cruel.

In the middle of the year 2012, SBI waived minimum balance for the saving bank customers and as a result there was no fine for not keeping minimum balance. Due to this move, crores of people opened new accounts and also switched over to SBI from other banks. Now this steep increase in charges will drive them away from SBI.  But SBI management would not leave them without levying a fine of Rs 500 plus service tax totaling to Rs 575.  This is a clear infringement on the rights of the citizens to choose a bank of his/her choice.
The argument of the SBI management that “it resorts to this increase in service charges due to maintenance of jan dhan accounts” does not hold water. It is not only SBI but also other public sector banks and regional rural banks which have opened crores of jan dhan accounts and have been maintaining them successfully without resorting to this kind of steep hike in service charges. The unanimous report of the standing committee on finance headed by Veerappa Moily submitted in February 2016 with far reaching recommendations to recover non-performing assets from the corporate sector has almost been dumped by this government. If the SBI management and other bank managements diligently attempt to recover non-performing assets from the huge corporate firms in co-ordination with government of India and RBI, there is no need for this at all.

The concept of nationalisation is to extend bank service to the crores of common people without any cost. The act of levying of heavy charges by SBI is totally against the very aim of bank nationalisation. There is an apprehension that this may be an attempt by the SBI management combined with the RBI and central government to resort to this steep hike of charges with a view to blur the difference between public sector banks and new generation private banks. This may be a prelude to privatisation of public sector banks to lessen the resistance from the general public.

The central government and the RBI have to instruct SBI management to withdraw this steep hike in service charges immediately.

Indigenise defence production by expanding the scope of defence production in the public sector through technological upgradation and enhanced research and development.

The government is set upon privatising defence production in the country. Both foreign and Indian private companies are being invited to enter defence production and the manufacture of hi-tech weaponary. This has serious implications for national sovereignty and the future course of the country.

The Ministry of Defence has finalised its new policy for defence production. It has decided to identify six Strategic Partners (SPs) from domestic Indian companies. These companies will partner foreign weapons manufacturers to build defence production enterprises in India.

The policy sets out four segments in defence production which will be open to the strategic partners from the private sector. These are helicopters, single engine fighter aircraft, submarines and armoured fighting vehicles.

Already some of the big corporates have entered the defence production sphere such as the TATA group, Reliance India Ltd, Reliance ADAG, Mahindra group, Larsen & Tubro, Bharat Forge and Ashok Leyland – Hinduja group and others. It will be from these companies that the initial six strategic partners will be chosen.

The blueprint for privatisation was set in motion with the announcement by the government of allowing 100 per cent foreign direct investment in defence production. In the name of indigenisation of defence production, tie-ups between domestic private companies and foreign multinationals to set up joint production enterprises are envisaged.

At present the bulk of defence production is undertaken by public sector enterprises and ordnance factories. The government has already delicenced 60 to 70 per cent of the production reserved for the public sector. It is planning to allot 25 per cent of the defence PSUs turn over to the private sector in the first phase.

As the private sector expands in defence production, the privatisation of the defence PSUs and disinvestment will continue apace. For the first time a defence PSU, the Bharat Earth Movers Ltd (BEML) is being privatised through a “strategic sale” of 26 per cent equity to a private party. The BEML is one of the largest public sector defence production enterprises. Handing over this vital enterprise to the private sector will be a clear signal to both foreign weapons manufacturers and the domestic private sector that there is a bonanza in arms manufacturing open to them in India.

The issue of national sovereignty is very much relevant in the context of the privatisation of the defence production sector. The entry of foreign arms manufacturers must be seen in the background of the Indo-US military cooperation agreement and the Logistics Exchange Agreement signed with the United States. The interlocking of the US and Indian armed forces and their “interoperability” will dictate the pattern of defence production in the country in which the big corporates both foreign and Indian will be involved.

Already the ADAG Reliance Defence & Engineering Company has entered into a repair and servicing agreement for the US 7th Fleet warships at the company’s Pipavav shipyard. This comes under the logistics exchange agreement wherein US naval ships can dock at Indian ports for maintenance and servicing. The nexus of Indian corporates in arms manufacturing with the US armed forces raise disturbing questions about encroachment on India’s sovereignty and vital defence and strategic policy making.

The entry of big corporates into arms manufacturing will lay the basis for a “military industrial complex” in India. The burgeoning corporate involvement in weapons production will bring in an altogether new calculus to India’s strategic and foreign policy making.

It is well known that the big arms manufacturers-armed forces-State nexus in the United States provides the impetus for militarism and the US wars of aggression. India by adopting a similar pattern of corporate arms manufacturers-State nexus will be fuelling demand for more armaments and aggressive national chauvinism. The privatisation of defence production in India is thus fraught with serious consequences. It will distort the very priorities of national development and endanger social welfare.

The privatisation of defence production must be halted. Instead there has to be indigenisation of defence production by expanding the scope of defence production in the public sector through technological upgradation and enhanced research and development.

Friday, 26 May 2017

Inordinate delay in implementation of the report of the Committee on Allowances

It is a matter of regret that in spite of all the persuasions made there is inordinate delay in finalization of recommendations of the Ashok Lavasa Committee on Allowances. More than one year and three months have passed after implementation of the report of the VII CPC, but the C.G Officers & employees are still getting allowances at the old rates as had been recommended by the VI CPC.

The Committee on Allowances took longer time while finalizing its recommendations, but it is a matter of deep regret that, even after submission of the report by the said committee, the same has not been made available to the Staff Side. Therefore, we do not know what recommendations have been made by the said committee.

The recommendations of the Allowances Committee should be made available to the Staff Side.

The Allowances should be implemented without any further delay, and the date of the implementation should be w.e.f. 01.01.2016.

Convert your existing Housing Loan Interest Rate to reduce your burden.

All India DRDO Technical Officers Association (AIDTOA) & Confederation of Central Govt.Gazetted Officers Organisations (CCGGOO) advises you to convert your existing Housing Loan Interest Rate to reduce your burden.

SBI, HDFC etc. have reduced Housing Loan Interest Rates to 8.35% (if first applicant is woman) & 8.4% for others.

Conversion of Home Loan Interest Rate Spread to MINUS 7.75% over Retail
Prime Lending Rate (RPLR).

e.g., Applicable Interest Rate (AIR) = RPLR 16.15% Minus Spread 7.75%.
                                                           = 16.15% - 7.75%
                                                           = 8.4%

Don't forget to take your Cheque Book to HDFC etc. for paying conversion charges.