Government announced New Transfer Policy for PSU Bank Employees

The Government has introduced a New Transfer Policy for Public Sector Bank Employees in India. 

 The banks’ ‘Transfer Policy’ has been assessed to enhance transparency and establish a consistent, non-discretionary framework. 

Public Sector Banks (PSBs) are advised to incorporate these recommendations into their own ‘Transfer Policy’ with the approval of their Boards. Immediate action is required for implementation and compliance starting from FY 2025-26.

New Transfer Policy for PSU Bank Employees (Government Bank Women Staff)Administrative Layers: 

Clearly define various administrative layers (Region, Zone, Circle, FGMO) and establish minimum and maximum tenures at each layer.

Transfer Timelines: Define and adhere to strict transfer timelines, completing transfer exercises before June each year, with mid-year transfers minimized except for promotions or administrative needs.

Transparency in Transfers: Ensure transparency by annually publishing seniority lists and existing/expected vacancies. Rotational transfers should be based on seniority, with exceptions documented.

Automation of Transfer Process: Develop an online platform for the transfer process, allowing employees to express location preferences. The portal should include transfer policies, guidelines, seniority lists, and vacancy details.

Regional Accommodation: Accommodate officers up to Scale-III in their respective linguistic regions to enhance customer service, considering vacancies and administrative needs.

Difficult Areas Designation: Designate certain regions as ‘Difficult Areas’ and prioritize transfers for employees after their tenure there.

Incorporation of Additional Grounds: Include additional grounds for transfer such as marriage, spouse, medical needs, maternity, child care, and distant postings.

Spouse Employment Consideration: Make efforts to post employees in the same or nearby regions if their spouse works in Central or State Governments.

Women Employees’ Transfers: Transfer women employees to nearby locations whenever possible, ensuring their safety and access to basic amenities in remote postings.

Grievance Handling: Address grievances regarding transfer policy violations with care, ensuring detailed deliberations and proper documentation of responses.Appeals Committee: Establish a committee to review transfer appeals, ensuring they are resolved within 15 days.

Transfer Protection for Office Bearers: Clearly define the position, tenure, and applicability of transfer protection for office bearers of Associations/Unions, ensuring it does not apply upon promotion.

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Why OPS is better than UPS? Please check

 

OPS की मांग को लेकर लम्बे समय से आंदोलन कर रहे सरकारी कर्मचारियों को लुभाने के उद्देश्य से सरकार ने यूनिफाइड पेंशन स्कीम (UPS) की घोषणा की है जिसे 1 अप्रैल 2025 से लागू किया जाना है. UPS लागू करने से पहले किसी भी पक्ष से कोई बात नहीं की गई.. ऐसे सभी लोग जो सरकारी मीडिया और सोशल मीडिया से ज्ञान अर्जित कर धारणा बनाते हैं, वे बहुत खुश हैं. बैंक कर्मी भी बहुत उत्साहित हैं क्योंकि देर सबेर यही UPS उनको भी मिलने वाली है. ऐसे में बिना लोगों के मन में बहुत सबाल पनप रहें हैं.. 

अब विचार करते हैं कि OPS में क्या है जो UPS में नहीं है जिससे यह पूरी तरह स्पष्ट हो जाए कि OPS क्यों जरूरी है:

Related Post - Difference between UPS vs NPS vs OPS

(1) OPS में सेवा निवृत्ति के समय मिलने वाले मूल वेतन और महंगाई भत्ते के 50% के बराबर पेंशन मिलने की गारंटी है, यह महंगाई भत्ता एक निश्चित अंतराल पर बढ़ता रहता है. जबकि जो सूचना उपलब्ध है उसके आधार पर UPS में महंगाई भत्ता शामिल नहीं है, उसकी जगह मुद्रा स्फीति और जीवन निर्वाह की लागत में मूल्य वृद्धि के परिणाम स्वरूप होने वाले परिवर्तन के दृष्टिगत समय समय पर मूल्यांकन के आधार पर पेंशन राशि में वृद्धि का प्रावधान है. जाहिर है कि OPS की तरह UPS में एक निश्चित अवधि में महंगाई भत्ते के रूप में वृद्धि का कोई प्रावधान नहीं है. 

(2) OPS में GPF की सुविधा है जिसके अंतर्गत कर्मचारी अपनी आय का एक हिस्सा जमा कर सकते हैं और जो उन्हें सेवा निवृत्ति पर ब्याज समेत मिलती है. यही नहीं जरूरत पड़ने पर GPF का एक हिस्सा बिना किसी झंझट के निकाल सकते हैं. UPS में यह सुविधा नहीं है. 

(3) OPS वेतन आयोग के दायरे में आती है, इस तरह हर दस साल में वेतन की तरह पुनर्निर्धारित होती है,

 अभी तक के अनुभव के आधार पर हर दस साल में पेंशन दोगुनी होती रही है, UPS में इस तरह की कोई गारंटी नहीं है. 

(4) OPS के लिए कर्मचारियों को अपने वेतन से प्रति माह किसी भी तरह का कोई अंशदान नहीं देना होता, यह बजट प्रावधान से मिलती है जबकि NPS और UPS फंडेड स्कीम हैं, जिसके लिए कर्मचारी प्रति माह एक निश्चित राशि पेंशन हेतु देते हैं और उस फंड से पेंशन मिलती है. 

(5) OPS में 40 % की पेन्शन की बिक्री यानि कॉम्यूटेशन भी है जो कर्मचारी सेवा निवृत्ति पर एकमुश्त ले सकते हैं, जिसकी अदायगी 15 साल तक 40% के बराबर कम पेंशन ले कर होती है और 15 वर्ष बाद फिर से पूरी पेंशन मिल जाती है. UPS में इसका कोई प्रावधान नहीं है. 

(6) OPS में उम्र के 80 साल की आयु होने पर 20%, 85 साल की आयु पर 30% , 90 साल की आयु पर 40 %, 95 साल की आयु पर 50% और

100 साल की आयु पर पेंशन में 100 % की स्वतः वृद्धि का प्रावधान है, UPS में ऐसा नहीं है।

(7) OPS में CGHS के अंतर्गत मेडिकल सुविधा भी है जो कि वरिष्ठ नागरिकों की सबसे बड़ी जरूरत है. 

(8) OPS में VRS लेने पर भी मिलती है. 

(9) OPS में डीसेबिलिटी पेन्शन के अलावा विशेष अस्थायी पेन्शन भी हैं, जो कुछ समय मिलने के बाद नोकरी जॉईन करने का प्रावधान भी है।

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Difference between UPS vs NPS vs OPS

Unified Pension System

The Narendra Modi-led government has approved a new pension scheme, the Unified Pension Scheme, which will come into effect in the next fiscal year, i.e. FY2025-26. After facing much criticism for removing the Old Pension Scheme, the NDA government has introduced the Unified Pension Scheme, which amalgamates the advantages of the previous Old Pension Scheme and the features of the New Pension Scheme.

The defined assured pension, also known as a fixed pension amount, guarantees a specific and predetermined sum of money that a retiree will receive regularly after retirement. This pension provides financial stability and security for individuals post-retirement. 

The newly approved scheme ensures that Central government employees will receive 50% of their last drawn salary from the past 12 months as their pension. Additionally, those employees who serve a tenure exceeding 25 years will be eligible for post-retirement inflation-linked increments.

Related Post - Why OPS is better than UPS? Please check

Information & Broadcasting Minister Ashwini Vaishnaw on Saturday said: “There have been demands from government employees to reform NPS (New Pension Scheme)… PM Narendra Modi formed a committee in April 2023 on this under T V Somanathan (who was then finance secretary)… After extensive consultations and discussions, including with the JCM (Joint Consultative Mechanism), the committee has recommended the Unified Pension Scheme. Today, the Union Cabinet has approved the scheme.”

Here are the key features of the Unified Pension Scheme:

1. Under the Unified Pension Scheme, there will be a provision of a fixed assured pension, unlike the New Pension Scheme (NPS) which does not promise a fixed pension amount.

2.   Under this scheme, individuals will be eligible to draw 50% of their average basic pay earned during the last 12 months preceding retirement. To qualify for this benefit, individuals must have completed a minimum of 25 years of service.

3. The Unified Pension Scheme has five pillars: Assured Pension, Assured Family Pension, Assured Minimum Pension, Inflation Indexation, and Gratuity

4. Assured Pension: Under the Unified Pension Scheme (UPS), the fixed pension amount awarded will be 50% of the average basic pay received during the last 12 months before retirement for individuals with a minimum qualifying service of 25 years. This pension amount will be adjusted proportionately for individuals with lesser years of service, with a minimum of 10 years of service being required to qualify for the pension.

5. Assured Family Pension: The retirement benefits package includes an assured family pension, amounting to 60% of the employee's basic pay. This pension will be disbursed promptly in the event of the employee's passing.

6. Assured Minimum Pension: In the situation of superannuation following at least 10 years of service, the Uniform Pension System (UPS) includes a guarantee of a minimum pension amounting to Rs 10,000 per month.

7. Inflation Indexation: The indexation benefit is a provision that applies to assured pension, assured family pension, and assured minimum pension. This benefit ensures that these pensions are adjusted to keep up with inflation and changes in the cost of living over time. When indexed, these pensions are periodically reviewed and adjusted to maintain their real value and purchasing power for the beneficiaries.

8. Gratuity: Upon superannuation, an employee is entitled to receive a lump-sum payment along with gratuity. This lump-sum payment is calculated as 1/10th of the monthly emolument (pay + dearness allowance), which includes both pay and dearness allowance, as of the superannuation date for every six months of completed service. Importantly, this payment does not diminish the amount of assured pension the employee will receive.

9. The UPS is designed to provide financial security and support to employees even after their demise. It guarantees 60% of the pension to be immediately transferred to the employee's family as a family pension, similar to the benefits offered by OPS. Additionally, after completing 10 years of service, employees under the UPS are assured a minimum pension of Rs 10,000 per month.

10. It's important to note that the UPS differs from the Guaranteed Pension Scheme proposal that was under consideration by the Andhra Pradesh government. The proposed Guaranteed Pension Scheme aimed to provide a pension amounting to 33% of the last drawn salary to employees.

National Pension System (NPS)

First floated in January 2004, the National Pension Scheme (NPS) was initially established as a retirement plan exclusively for government employees, but in 2009, it was expanded to cover all sectors. Governed jointly by the government and the Pension Fund Regulatory and Development Authority (PFRDA), the NPS is a long-term, voluntary investment program designed for retirement purposes.

> The NPS offers a pension alongside the potential for considerable investment growth. Upon reaching retirement age, subscribers have the choice to withdraw a portion of their accumulated savings, while the remaining sum is distributed as a monthly income, ensuring a regular income stream post-retirement.

> The National Pension Scheme comprises two tiers: Tier 1 accounts and Tier 2 accounts. Tier 1 account holders can only withdraw funds after retirement, whereas Tier 2 accounts allow for early withdrawals, providing more flexibility for investors.

> Under NPS, individuals are eligible to withdraw 60% of the total corpus accumulated during their active employment years upon reaching retirement age, and this withdrawal is exempt from taxation. The remaining 40% is typically utilised to purchase an annuity product, which presently offers a pension amounting to around 35% of the individual's final salary before retirement.

> Under Section 80 CCD of the Income Tax Act, individuals can avail tax benefits by investing in the National Pension System (NPS) up to a maximum limit of Rs 1.5 lakh. 

> Furthermore, withdrawing 60 percent of the NPS corpus upon retirement can be done tax-free, making it an attractive option for retirement planning. This feature offers the potential for a lump sum payout, adding to its appeal as a retirement savings vehicle.

Old Pension System(OPS)

So, every time the government increases your Dearness Allowance, the government also hikes the Dearness Relief for retirees. 

Under the regulations, OPS guarantees that upon retirement, an employee will receive 50% of their salary as a pension. Within OPS, there is a mechanism in place known as the General Provident Fund (GPF), which enables employees to set aside a portion of their income. This amount is later repaid with accumulated interest upon their retirement. 

Moreover, within OPS, employees are entitled to a gratuity payment of a maximum of Rs 20 lakh. 

Payments facilitated by OPS are executed through the government treasury, ensuring that pensions are directly financed by the government. Should a retired employee pass away, their family receives continued pension benefits. Noteworthy is the fact that no deductions are made from an employee's salary for the purpose of pension contributions under OPS.

A mix of features

The new Unified Pension Scheme (UPS) offers a combination of benefits that combine elements from the Older Pension Scheme (OPS) and the National Pension Scheme (NPS).

From the OPS, the UPS incorporates features such as an assured pension, inflation indexation, family pension, and a minimum pension. These aspects provide a sense of security and stability to members post-retirement.

Additionally, the UPS also adopts a key feature from the NPS, which is a contributory, fully funded scheme. This ensures that members have the opportunity to contribute towards their pension fund, leading to a more personalized and potentially higher pension payout upon retirement.

Under the Official Pay Structure (OPS), the pension given to government employees, both at the central and state levels, was determined to be 50 percent of their last drawn basic pay, similar to the structure in the Universal Pay Structure (UPS). Furthermore, a Dearness Allowance (DA) was included, calculated as a portion of the basic salary, to compensate for the consistent rise in the cost of living.

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Centre announces Unified Pension Scheme(UPS)

 

On Saturday, August 24, the Union Cabinet gave its approval to the Unified Pension Scheme (UPS), which will guarantee government employees' pensions after they retire. The official release states that the program will go into force on April 1, 2025.

This development coincides with a notable pushback against the New Pension Scheme (NPS) among government employees, which the Opposition has exploited for political purposes. The Old Pensions Scheme (OPS) has been reinstated in opposition-ruled states such as Himachal Pradesh (2023), Rajasthan (2022), Chhattisgarh (2022), and Punjab (2022).

Thus, the Center's introduction of a fresh pension program is a big political move ahead of the next round of Assembly elections in Jammu & Kashmir, Haryana, Maharashtra, and Jharkhand (the schedules for the latter two have not yet been declared).

Here is all you need to know about the UPS, and the context in which it is being implemented.

Crucially, the UPS promises retirees a fixed pension amount unlike the NPS. This was one of the major criticisms of the NPS by government employees.

ccording to the Union Information and Broadcasting Minister Ashwini Vaishnaw, the UPS has five key features:

Assured pension: This would amount to 50 per cent of an employee’s average basic pay, drawn over the last 12 months before superannuation for a minimum qualifying service of 25 years. The amount would proportionately go down for a lesser service period, upto a minimum of 10 years of service.

Assured minimum pension: In the case of superannuation after a minimum 10 years of service, the UPS has a provision of an assured minimum pension of Rs 10,000 per month.

Assured family pension: Upon a retiree’s death, the employee’s immediate family would be eligible for 60% of the pension last drawn by him/her.

Inflation indexation: There would be dearness relief to the above three mentioned pensions, which will be calculated based on the All India Consumer Price Index for Industrial Workers, as is the case with serving employees.

Lumpsum payment at superannuation: This would be in addition to gratuity, and be calculated as 1/10th of monthly emolument (pay+ dearness allowance) as on the date of superannuation for every six months of service completed.

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Karnataka Orders Closure of all Government Accounts in two PSU banks due to Alleged Fraud

 

On Wednesday, the Karnataka government took a significant step by ordering all state departments to close their accounts in the State Bank of India (SBI) and Punjab National Bank (PNB). This decision comes as a response to allegations of misappropriation of funds.

The Karnataka government has directed all departments, public enterprises, corporations, local bodies, universities, and other institutions to close their accounts with SBI and PNB immediately. The order, issued in a circular dated August 12 by PC Jaffer, the Secretary of Budget & Resources in the Finance Department, and approved by Chief Minister Siddaramaiah, specifies that no further deposits or investments should be made in these banks.

The deadline for compliance with this directive is set for September 20.

The decision follows reports of two major fraudulent transactions:

Mismanagement of Fixed Deposit at PNB: A fixed deposit of Rs 25 crore was made at PNB’s Rajajinagar branch by the Karnataka Industrial Area Development Board on September 14, 2011. Despite the deposit term ending, PNB allegedly released only Rs 13 crore. Efforts to resolve this issue over the past decade have been unsuccessful.Fraudulent Use of Deposit at SBI: A Rs 10 crore fixed deposit made by the Karnataka State Pollution Control Board at the former State Bank of Mysore, now part of SBI, was allegedly misused to settle loans for a private company using forged documents. Attempts to recover this amount have also failed.

A senior government official told that the banks have claimed the matter is sub judice, but this has not stopped the State Public Accounts Committee from deciding to halt business with these banks. The government has issued the circular to withdraw deposits and is awaiting a response from the banks, which have requested additional time to address the issues.

This move comes amid a heated political climate in Karnataka, with the BJP-led opposition clashing with the Congress-ruled state government. The controversy has intensified following the exposure of an alleged fund transfer scam involving the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Ltd. A suicide note from Chandrashekhar P, the corporation’s accounts superintendent, revealed details of the alleged scam, adding fuel to the political fire.

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Finance Ministry asks 5 PSU Banks to decrease Govt shareholding by 1st August

The Finance Ministry has instructed five public sector banks in India to increase their minimum public shareholding to 25% by August 1, in line with regulatory requirements. This directive is part of the Securities Contract (Regulation) Rules, which mandate all listed companies, including public sector entities, to maintain a minimum public shareholding of 25%.

The five public sector banks that have yet to meet this requirement are UCO Bank, Central Bank of India, Punjab & Sind Bank, Bank of Maharashtra, and Indian Overseas Bank. These banks currently have public shareholdings ranging from 1.75% to 13.54%.

Read More - Shareholding Pattern of Government in Public Sector Banks

Nationalized Banks (Government Shareholding %, as at end-March 2023)

1. State Bank of India (57.59%)

2. Canara Bank (62.93%)

3. Bank of Baroda (63.97%)

4. Punjab National Bank (73.15%)

5. Indian Bank (79.86%)

6. Bank of India (81.41%)

7. Union Bank of India (76.99%)

8. Bank of Maharashtra (90.90%)

9. Central Bank of India (93.08%)

10. UCO Bank (95.39%)

11. Indian Overseas Bank (96.38%)

12. Punjab and Sind Bank (98.25%)

Sources familiar with the matter suggest that the Securities and Exchange Board of India (SEBI) may consider granting exemptions to some public sector banks and other public sector undertakings (PSUs) to gradually achieve compliance with the 25% minimum public shareholding norms by August 2024. State-run lenders are reportedly raising capital through Qualified Institutional Placement (QIP), which leads to a dilution of the government’s stake. However, there are currently no plans for a direct share sale in any public sector bank.

It is worth noting that the government’s stake in the five state-run banks exceeds 75%, resulting in unsold government stakes valued at over Rs 65,000 crore at current market prices. Additionally, several other government enterprises, including IRFC and SJVN, also have government stakes exceeding 75%.

In related developments, the central government has divested its holdings in six public sector units (PSUs) over the past year. These include Hindustan Aeronautics Ltd., RVNL, SJVN, Coal India, HUDCO, and NHPC. The shares of four of these companies have already doubled from their Offer for Sale (OFS) floor price.

It is important to note that the Finance Ministry has recently amended the Securities Contracts (Regulation) Rules, 1957 to exempt listed public sector companies from the minimum public shareholding norm. This exemption comes ahead of the three-year timeframe given to listed PSUs to conform to the norm. The amendment allows listed entities to have at least 25% public shareholding, which can be held by anyone other than a promoter, including institutions or individuals.

These recent developments highlight the government’s efforts to ensure compliance with minimum public shareholding requirements and promote transparency in the functioning of listed companies in India.

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Latest Bank merger news of PSU banks and PSU Insurance Company

 

A government document shared on social media has triggered speculation about possible PSU bank mergers between Union Bank and UCO Bank, and Bank of India and Bank of Maharashtra. The document, whose source couldn't be verified, said that a Parliamentary committee will hold discussions with four PSU banks in the first week of January under banking laws, which govern mergers and acquisitions, among other things.

However, the government has not yet provided official information regarding the merger. Neither of the four PSU banks mentioned have made any stock exchange filings in this regard.

The document being circulated on X (formerly Twitter) is a government PDF issued in the name of Ramesh Yadav, Under Secretary of the Government of India. The letter is issued to the Governor, Reserve Bank of India, Chairman of LIC, IRDAI, and NABARD, along with MD and CEOs of UCO Bank, Bank of Maharashtra, Bank of India, and Union Bank of India.

The PDF is also addressed to CMDs of New India Assurance Company, United India Insurance Company, Oriental Insurance Company, National Insurance Company, and MD & CEO of SBI Life Insurance Company. The subject of the alleged government PDF states 'Study Visit programme of the Committee on Subordinate Legislation, Lok Sabha to Mumbai and Goa from 2 to 6 January 2024'.

The 2-day programme includes informal discussions with the representatives of Union Bank of India and UCO Bank on January 2, and with representatives of Bank of Maharashtra and Bank of India on January 4, 2024, on rules/regulations framed under Banking Regulations Act 1949 and other relevant Acts as applicable to them and the regulatory mechanism in post-merger scenario.

The Finance Ministry has reportedly issued a clarification, saying that this is a parliamentary committee on subordinate legislation, and it has no connection whatsoever with the policies of bank mergers, according to CNBC-Awaaz. Amid the merger buzz, the ministry reportedly changed the agenda of its meeting. According to the new agenda, there is no mention of the word “Merger”, which simply means that there is no proposal for a merger between Union Bank of India and UCO Bank, Bank of India, and Bank of Maharashtra, said CNBC Awaaz in its report.

Meanwhile, No proposal to merge the public sector banks is being considered by the government and the discussions were part of a ‘routine exercise, Reuters also reported citing two sources from the Ministry of Finance.

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Latest Bipartite Settlement News - Finmin asks IBA to finalise wage revision of bankers of PSU banks by December 1

The government has asked the Indian Banks' Association (IBA) to initiate the process of negotiations for the 12th Bi-partite settlement in a time-bound manner and to finalise it by December 1, 2023, said a senior official.

The wage revision for employees and officers of the public sector banks is due from November 1, 2022.

The early wage revision would help improve working conditions and incentivise the banking sector employees, the official said.

Further, the official said, the finance ministry has asked IBA to ensure that all future wage negotiations should be finalised before the beginning of the subsequent period so that the wage revision could be implemented from the due date itself.

As a part of the settlement, the IBA is expected to engage in dialogues with the employees' Unions/ Associations and work out to arrive at a mutually agreeable wage settlement.

The government has stressed the importance of fairness and equity in the revision, ensuring that the compensation structure remains competitive with other players in the banking industry, the official said.

"Wage settlement for banks has always been a tedious and time-consuming process with bank managements, represented by IBA, and employees' unions engaging in tough negotiations. Historically, delays of 2-3 years in wage settlement have led to a substantial accumulation of arrears, which are eventually disbursed in a lump-sum.

"This contrasts with the more sustainable approach of integrating the revised wages into the regular monthly salaries," said the official.

Highlighting that the banking sector is the backbone of the Indian economy, the official said it is incumbent upon the management of banks to ensure that employees are adequately compensated and it is necessary for the health and stability of the entire economy as well.

It also comes at a time when the financials of the Public Sector Banks are healthy with the net profits almost tripled to Rs 1.04 lakh crore in FY'23 as compared to Rs Rs 36,270 crore earned in FY'14.

At the same time, the Return on Assets (ROA) in PSBs rose from 0.51 per cent in FY'14 to 0.78 per cent, while Net Interest Margin (NIM) has also increased from 2.73 per cent to 3.23 per cent in FY'23.

Wage settlement talks normally benefit employees of public sector banks, old generation private banks and some foreign banks.

In the previous agreement, 12 state-owned banks, 10 old-generation private sector banks and seven foreign banks signed up. New-generation private banks like HDFC Bank and ICICI Bank are not part of these settlement talks.

The last 11th Bipartite Wage Negotiations concluded after three years of negotiations in 2020 agreed for 15 per cent pay revision for PSBs employees.

Almost 3.79 lakh officers and close to 5 lakh bank employees of PSBs, old-generation private banks and foreign were covered under the wage hike due from November 1, 2017.

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