Banking services paralysed on Monday as employees begin 2-day strike

Banking services were crippled on Monday as bank employees across regions begun a two day strike rejecting Indian Banks' Associations 10% hike offer.

Wage revision in public sector banks is due since November 2012. At the last tripartite wage settlement in 2007 which expired in October 2012, bank employees received a 17.5% hike.

United Forum of Bank Unions said over 10 lakh employees have joined the strike in 27 public sector banks and 48 regional rural banks.

However, Finance Minister P Chidambaram said the profit of banks cannot be used only to enhance salaries because there are other obligations.

IBA which represents bank managements in wage settlement talks with unions is reported to have said that banks can not afford more than 10% salary hike due to steep growth in non-performing assets putting pressure on profitability. A 10% hike would cost banks an additional Rs 3,150 crore a year cumulatively.

Union members in turn said offer was not in line with rising inflation. Their demands include regulated working hours for officers, five days a week and re-introduction of compassionate ground appointment.

"Some Rs 1.41 lakh crore has been written off in the last five years and the banks are sitting on over Rs 6 lakh crore bad loans because of managements' negligence. But they are not ready to pay staffs a reasonable hike," said Rajen Nagar, president of All India Bank Employees Association, the largest bank union representing almost half of 10 lakh bank employees including officers and subordinated staff.

The Finance Minister said that a significant part of retained earnings must be used to infuse additional capital, otherwise banks will not find the amount of capital that is required over the next five, 10 and 20 years.

"I will appeal to employees and officers of banks to recognise that banks profits, banks earnings have other claims. While claims of officers, staff and employees must be duly acknowledged, and a fair and just (wage) settlement is arrived at, there are other claimants to banks' profit," Chidambaram was quoted saying in a PTI report.


Source: Economic Times

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Public sector bank staff start two-day strike; operations hit

Cheque clearances and cash withdrawals and deposits in public sector bank branches across the country were hit as employees started a two-day strike from Monday to press for a revision in wages.

However, private sector banks such as ICICI Bank, HDFC Bank and Axis Bank were functioning normally because their staff are not on strike.

Employees are compelled to take this route as the Indian Banks' Association (IBA) did not come up with an improved wage offer, United Forum of Bank Unions (UFBU) Convener M V Murali said. The IBA represents bank managements.

Banks, including the State Bank of India, the country's largest, had informed customers in advance about the likely inconvenience they would face during the strike.

The unions had rejected the IBA's offer of a 10 per cent wage hike during a conciliation meeting held on February 6 with the Chief Labour Commissioner.

The offer made by bank managements was not in line with rising inflation, General Secretary of National Organisation of Bank Workers Ashwini Rana said.

The staff of public sector banks had gone on a nationwide strike for a day on December 18 after discussions with the IBA on wages on December 14 failed. The wage revision of public sector bank employees has been due since November 2012.

UFBU is an umbrella organisation of nine bank employee and officer unions.

There are 27 public sector banks in the country with a combined employee strength of about 8 lakh. There are about 50,000 branches of these banks across the country.


Source: Economic Times

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SBI offers lower interest rates to rivals’ customers

In a fresh twist to the rate war in home loans, the country's largest lender State Bank of India is pitching its low interest rates to lure buyers who have already availed mortgages from rivals. The bank has sent out emails to prospective customers where it is marketing a balance transfer scheme in addition to selling fresh loans.

SBI offer loans up to Rs 75 lakh at an interest rate of 10.15 per cent or 15 basis points above its base rate of 10 per cent. The base rate is the benchmark rate on which its floating rate loans are re-priced. The other highlights of its home loan include: absence of charges on foreclosures or pre-payments and a balance transfer fee of Rs 1,000. In addition, the bank also promises a maximum tenure of 30 years. Mortgage major HDFC is currently offering an interest rate of 10.25 per cent for loans up to Rs 75 lakh. Other lenders are in the same range.

"The takeover campaign has been launched with a view to provide an option to switch over to our home loans, which have the lowest interest rate," senior officials from the bank said (see box for interest rate comparison on home loans). During the third quarter of FY14, home loans acquired from other lenders accounted for 11 per cent of the bank's home loan book.

But even as SBI pitches its low rates to customers of rivals, some of the bank's own customers are paying higher rates. "Consumers need to be watchful. In the current scenario, such rate cuts are only for new borrowers. When such schemes are announced, old borrowers should take the opportunity to refinance their existing loans with their existing banks or home finance companies. Otherwise, only a base rate cut entails benefits across the board," Adhil Shetty, said chief executive officer of Bank Bazaar.com.

Lenders are fighting for home loans in the absence of large loan off take from corporates. Also, banks are now targeting larger loans by offering uniform rates up to Rs 75 lakh as against Rs 30 lakh earlier. But over 80 per cent of home loans in India continue to be below Rs 30 lakh.


Source: Economic Times

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Bank unions to go on two-day strike from Monday

Operations at public sector banks are likely to be impacted as employee unions have decided to go on a two-day nation-wide strike from Monday to press for wage revision.

During the conciliation meeting held on February 6 before the Chief Labour Commissioner, the IBA did not come up with any improvement in the wage offer of 10 per cent hike in the pay package, United Forum of Bank Unions (UFBU) Convener M V Murali told PTI.

As conciliation proceedings remained inconclusive, he said, UFBU has decided to go on two day nation-wide from February 10.

Banks including country's largest lender State Bank of India have informed customers in advance about the likely inconvenience they could face due to the strike.

Private sector players such as ICICI Bank, HDFC Bank and Axis Bank are expected to function normally.

All India State Bank Officers' Federation and All India State Bank of India Staff Federation, being part of UFBU will, also participate in the strike, SBI said in a statement.

General Secretary of National Organisation of Bank Workers, Ashwini Rana said as the offer made by bank management is not in line with the rising inflation, the unions are compelled to protest.

Staff of public sector banks had gone on a day's strike nationwide on December 18, after the discussions with IBA on wage revision had failed on December 14. The wage revision of public sector bank employees has been due since November 2012.

UFBU is an umbrella organisation of nine bank employees and officers unions.

There are 27 public sector banks in the country with employees strength of about 8 lakh. There are about 50,000 branches of these banks across the country.


Source: Economic Times

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Dena Bank Q3 profit down 67 pct to Rs 67.80 cr on higher provisioning

Public sector lender Dena Bank reported a 67 per cent decline in net profit at Rs 67.80 crore for the quarter ended December 31 on account of higher provisioning.

The bank's profit after tax stood at Rs 206 crore in the corresponding quarter last year.

"Profitability is under stress due to higher provisioning," the bank's Chairman and Managing Director Ashwani Kumar told reporters here.

The bank's provisions increased to Rs 382.43 crore in the October-December quarter as against Rs 156.59 crore last year.

The bank's net interest margin (NIM) stood at 2.66 per cent in the quarter as against 2.88 per cent.

"We expect our NIM to be in the range of 2.75-3 per cent by March 2014," Kumar said.

Net Interest Income (NII) for the quarter was Rs 660.89 crore, a growth of 7.48 per cent, compared to Rs 614.90 crore in the same quarter last year.

The bank's asset quality deteriorated in the quarter with gross NPA increasing to 2.96 per cent from 2.09 per cent in the year ago quarter. Net NPA ratio rose to 2 per cent from 1.31 per cent in the same period last year.

In absolute terms, gross NPA has increased from Rs 1,317 crore to Rs 2,066 crore in the third quarter ended December 31, while net NPA increased from Rs 817 crore to Rs 1,379 crore.

Provision coverage ratio for the quarter was at 63.92 per cent. In the quarter under review, the bank's provisioning for non-performing assets was Rs 124 crore while for restructured assets it was Rs 53 crore, Kumar said.

The bank saw fresh slippages of Rs 503 crore during the quarter. One of the large accounts which became NPA was SEL worth Rs 99 crore, Kumar said.

The bank upgraded Rs 400 crore of bad loans in the quarter. The state-owned bank restructured Rs 552 crore of assets in the December quarter and has a pipeline of Rs 600 crore in the current quarter, Kumar said. Total business of the bank stood at Rs 1,65,976 crore as compared to Rs 1,47,922 crore.

While deposits of the bank increased to Rs 96,081 crore as on December 31 from Rs 84,882 crore last year, recording a growth of 13.19 per cent; advances increased to Rs 69,895 crore from Rs 63,041 crore, showing a growth of 10.87 per cent. Credit deposit ratio stood at 72.75 per cent.

The bank expects a credit growth of 17 per cent and deposit growth of 14-15 per cent by March-end.

Meanwhile, the public sector lender today launched a new term deposit 'Dena-444' with maturity of 444 days for retail customers, which will offer an interest rate of 9.15 per cent to general public and 9.65 per cent for senior citizens.


Source: Financial Express

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