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Vol. I | No.1 | Panchkula | Monday, August 10, 2015 | Pages 08 | `10 | Annual Subcription `180

Owned by: Khushboo Media & Enter tainments Private Limited

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CONNECTING INDIA WITH BANKING NEWS

Were turning towards


taking action on divergences
(NPAs). These things cant
be done with impunity
RAGHURAM RAJAN, RBI GOVERNOR

Frauds

ndia

Banks that need capital the


most and the performing
ones will get capital
support.
ARUN JAITLEY, FM

GOVT MULLS UNIFIED PACKAGED


INSURANCE FOR FARMERS

Oriental Bank, sugar mill


committed `150-crore
fraud: Whistleblower P3

CROP INCOME INSURANCE


LIKELY TO BE SCRAPPED

Editorial
Khushboo of India (KOI):
A crusader is born P4

Savings
Post offices plan rural foray
with CBS P5

Life in banks
Bank employees rank high
on STRESS SCALE P6

DRTs

Chandigarh DRTs inundated


with cases; delays leading
to growth of NPAs P7

Right To Information
SBI shows transparency,
furnishes details under RTI
Act P8

KOI NEWS SERVICE

info@khushbooofindia.co.in

Mumbai: In its bid to curb the menace of rise in farmers suicide, Narendra Modi government has plans
to launch Bharat Kisan Bima Yojana (BKBY) as part of the ongoing
Pradhan Mantri Jan Dhan Yojana
across the country in near future.

Thus, the government is likely


to do away with its earlier muchhyped plan to come up with crop
income insurance scheme. A highlevel committee, which had been
appointed by the government to
look into various aspects of the
crop income insurance scheme, advised that it will not be viable as the

country lacks the infrastructure to


run it successfully. The BKBY draft
as prepared by the government,
doesnt mention anything on crop
insurance income scheme.
The unified packaged insurance scheme, which will be known
as Bhartiya Kisan Bima Yojana
(BKBY), will also provide protec-

tion to farmer and his/her family


members in case of the accidental
death/disablement, hospitalisation
due to illness and accidental insurance protection of farmers school/
college-going children and provisioning of education fee to the students in case of death of parent.
continued on P2 >>

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Insurance
New package to include mandatory crop insurance

continued from P1

Moreover, it provides life insurance protection to the farmer and


his/her family members. Because it
was meant for the poor farmers, the
premium will be kept low. However,
nothing has been decided by the
government on the issue as yet.
It will cover the farmers dwelling and other essentials which help
him in earning his livelihood such as
milch cattle, agricultural pump sets
and tractor, says a government draft
on the topic.
The policy will have nine sections
with mandatory crop insurance.
However, farmers have to choose at
least four other sections too, so as
to avail the applicable subsidy under
crop insurance section, it adds.
It will feature various products
like agriculture insurance, health
insurance, personal accident insurance, livestock/cattle insurance,
tractors and pumpset insurance, student safety insurance and of course,

Unified packaged
insurance scheme
n
Bhartiya Kisan Bima Yojana will

provide protection to farmer and


his family in case of the accidental
death/disablement
n
Hospitalisation due to illness
n
Accidental insurance protection
of farmers school/college-going
children
n
Provision of education fee to students in case of death of parent
n
Agriculture insurance to cover compensation to farmers suffering loss
due to crop loss/damage arising
out of unforeseen events

life insurance.
Apart from providing financial
protection to farmers, the scheme
will also ensure food security,
crop diversification and enhancing
growth and competitiveness of agriculture sector.
The insurance cover will be for
one full year except for agriculture
insurance (which will be bi-annual
separately for kharif and rabi seasons) renewable from year to year.
The scheme would be offered/administered by the non-life insurers.
The scheme is likely to be implemented through a multi-agency
framework by implementing agency (IA) under the overall guidance
and control of the Department of
Agriculture & Cooperation (DAC),
Ministry of Agriculture (MoA),
Government of India (GoI) and the
state concerned in co-ordination
with various other agencies. The
other agencies involved include financial institutions like commercial
banks, co-operative banks, regional
rural banks and their regulatory
bodies and government departments
like agriculture, co-operation, horticulture, statistics, revenue, information/science & technology and panchayati raj.
Agriculture insurance part of the
cover will provide compensation to
farmers suffering loss due to crop
loss/damage arising out of unforeseen events, stabilise the income of
farmers to ensure their continuance
in farming, encourage them to adopt
innovative and modern agricultural
practices and ensure flow of credit
to the sector.
The loanee farmers will be covered through banks/financial institutions whereas non-loanee farm-

ers shall be covered through banks


or insurance intermediaries.
The policy is designed to take
care of the insurance needs of
farmers associated with agriculture
activities and also provides yieldbased crop insurance to the farmer
based on his ownership rights of
land and sown crop, it said.
A senior Nabard official said that
the premium will be kept quite low

for this unified insurance package as


it would be meant for farmers. The
head of a state-owned non-life insurance company also hoped that
the premium for the policy must be
affordable for the farmers.
The actuarial premium rates
(APR) will be charged for crops
covered/insured under the scheme,
including farmer share ranging from
two-three per cent of sum insured

(SI). The difference between APR


and the rate of Insurance charges
payable by farmers shall be treated
as rate of normal premium subsidy
contribution to the corpus fund
which shall be shared equally by the
Centre and state.
In case of adverse seasonal conditions during crop season, including, floods, prolonged dry spells,
severe drought, unseasonal rains,
IA in consultation with concerned
state government/UT based on
agro meteorological data/ satellite
imagery or any other proxy indicator will decide about crops/areas
for which on account payment will
be made, not exceeding 25 per cent
of likely claims.
The claim amount along with
particulars will be released to the
individual nodal banks. The banks
at the grass-root level, in turn,
shall credit the accounts of the individual farmers and display the
particulars of beneficiaries on their
notice board. The banks shall provide individual farmer wise details
claim credit details to IA and shall
be incorporated in the centralised
data repository.

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03

Frauds

Oriental Bank, sugar mill committed


`150-crore fraud: Whistleblower
Money pilfered from the accounts of farmers under Kisan Credit Card Scheme
BHUPINDER SHARMA

Loopholes

info@khushbooofindia.co.in

Chandigarh: Oriental Bank of


Commerce (OBC) and Simbhaoli
Sugars Limited have jointly committed a fraud of Rs 150 crore in the
name of sugarcane farmers under
Kisan Credit Card Scheme.
While the scheme aims to provide
many facilities to sugarcane producers, bank officials in connivance
with the sugar mill management
misused it and allegedly gave undue
favour to the mill.
Gurinderjit Singh, a whistleblower
in his letters to Reserve Bank of
India and Central Bureau of Investigation (the letters are in the possession of Khushboo of India), alleged that under this Rs 150-crore
fraud, 5,761 farmers were financed
and refinanced on an exorbitant rate
of interest by OBCs Hapur (Uttar
Pradesh) branch on the directions of
its head office in Gurgaon.
Money intended for the poor, illiterate and needy farmers was misused by crediting it to the current
account of Simbhaoli Sugars Limited, claimed Singh.
He added, officials concerned not
only bypassed various laws but also
never cared to follow the guidelines
of the personalised scheme under
Kisan Credit Card for the farmers.
He added the bank officials credited the total sanctioned loan amount
to the current account of sugar mill
by debiting the loan accounts of the
poverty-stricken farmers. The account of the mill was opened in con-

Only two officials of the


}
bank completed all the formalities of these 5,761 loan
accounts within a span of
few days whereas there is
no secret that nationalised
bank officials take months
to complete formalities of
single loan account

Gurinderjit Singh, Whistleblower

n
Farmers not properly

identified by the
officials
n
KYC compliance not
ensured
n
Credentials not checked
n
Credit needs not
appraised
n
Land holding details
not verified

travention of RBI directives without


taking No Objection Certificate
(NOC) even from the existing lenders of the mill so as to facilitate it
to receive the amount from farmers
accounts directly.
Singh alleged that farmers were
also not properly identified by the
officials as KYC compliance was
not ensured, credentials were not
checked, credit needs were not appraised, land holding details were
not verified as bank officials were
not interested in providing them the
loan amount but were ready to transfer the loan amount to the account of
the sugar mill. It is also feared that
some of the beneficiaries were fake,
alleged Singh.
He further added that a reasonable marketing period after actual
harvest was not allowed to the farmers as the mill deposited some part
of the sale proceeds of the farmers
produce one day earlier than the
dates fixed for recovery of interest
to take benefit of interest subvention
which does not synchronise with
harvesting and marketing of crops.
The very next working day the loan
amount was again transferred to the
current account of the mill from the
loan accounts of farmers.
The sugar mill didnt route the
payment of sugarcane supplied by
the farmers through their accounts
as per condition specified in the
scheme. This route was intended to
provide double benefit to the farmers so that they could get the amount
as per their convenience and also
earn interest on their balance, said
the whistleblower.
He added pre-sanction visit report

record did not follow KYC policy


guidelines, maximum permissible
limit was not calculated, farmers
were not told about terms and conditions, document register was not
maintained, primary and collateral
securities were not verified, periodical inspections were concealed and
loan accounts closed without any

request from the customer.


Only two officials of the bank
completed all the formalities of
these 5,761 loan accounts within
a span of few days whereas there
is no secret that nationalised bank
officials take months to complete
formalities of single loan account,
alleged Singh.
Even in the audit report of the sugar mill corroborates this accounting fraud as outstanding liabilities
shown by sugar mill are Rs 460
crore, but charge was created on the
assets of farmers.
Financial results, analysis and review of summary of the standalone
financial results of the company for
the year ended March 31, 2014,
clearly mentioned, Short term
borrowings: Unsecured short term
borrowings have increased by Rs
459.83 crore (net) principally on

account of re-classification of agri


loan liabilities due to certain banks
from current liabilities to short term
borrowings. While the outstanding
amount of company is Rs 459.83
crore but in OBCs Hapur branch it
is Rs 150 crore as corporate guarantee provided by the sugar mill as
short term unsecured loans. This
hints that other banks are also involved in this trickery.
When senior official of OBC Arvind Kumar of Hapur branch was
contacted, he told Khushboo of India, We have not declared Simbhaoli Sugar Limited as Non Performing Asset (NPA) as yet. They
are paying Rs five lakh per day to
the bank to settle the amount. He
refused to share further details.
However, sugar mill company officers refused to comment on the alleged fraud.

MEDIA & ENTERTAINMENTS


PRIVATE LIMITED

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Editorial

KHUSHBOO OF INDIA (KOI):


A CRUSADER IS BORN

The story behind the countrys first exclusive banking newspaper

Sanjay Sharma
Editor-in-Chief, Khushboo Of India

People have had a love and hate


relationship with banks. Banks are
crucial for growth and are also accused of ruining several countries.
International funding agencies are
seen with suspicion by several developing countries for imposing
conditions that do not suit them.
Post Lehman Brothers default in
2008 in American on mortgaged
properties, the entire international
community started focusing on
ethical banking. Transparency was
expected in the banking. A sense
of responsibility to the globe was
another concern.
There is a concern that even
sovereign debts held by countries
are becoming unpayable. Euro
zone was recently hit by the phenomenon.
Non Performing Assets (default
of three instalments) in India was
pegged at Rs 3 lakh crore and it is
feared to reach Rs 4 lakh crore the
next year. The build up of NPA is
partly because of a global economic slowdown. The other major reason could be corruption and indiscretion by unscrupulous bankers.

Banks show their double standards refusing to


}
give the public information about default, name
of defaulters, investigations into an account
turning NPA in RTI applications at the level of a
branch but share the same information, though in
parts, in their balance sheets and other
proceedings at the national level. They just
avoid self disclosure .
0

What needs a deep analysis and


investigation is finding out if there
was any connivance between a section of bankers and greedy defaulters. A crisis gives greedy elements
an opportunity to benefit from a
situation where the guard is lowered to promote economic growth.
Obviously, transparency is the
key to prevent a repeat of Lehman
Brothers like situation where indiscretion fueled by speculative
greed led to the collapse of econo-

mies the world over.


We may have been nave to believe that the public sector banks
will come forward to share information in a tell-all manner.
Khushboo of India web page
was launched two months back
to bridge the trust deficit between
the customer and the banks. My
colleagues Bhupinder Sharma,
Munish Nagar and Akarsh Sharma made an all out effort for prevailing upon banks to reveal vital
information about the scale of
default virtually in each branch.
But, they faced a China Wall in
front of a mine of information
that may have given an insight
into if greed and indiscretion
have pushed the countrys economy to this situation.
Intransigence of banks became
a challenge and we in Khushboo
of India (KOI) knew there are
only challenges that propel the
human spirit to push harder. KOI
launched a next frontal attack filing applications under Right to Information (RTI) Act. Our queries
were related to potential NPAs,
NPAs and the restricting of accounts in this zone for a quarter
but except SBI and Bank of Maharashtra, rest of banks kept on
quoting one section or the other
to deny information. While denying information, banks did not

even feel shy that they declare the


same information in their balance
sheets at the national level. Obviously they had double standards.
Without caring to be bogged
down, we did a series of investigative stories to uphold the trust
of the people in the banking.
Banking is crucial for economic
growth and even job creation.
Around 50,000 jobs are falling
vacant every year in banks and 80
lakh aspirants are trying for jobs
in banks. It is huge interest.
Financial inclusion has been a
buzzword for almost a decade in
India and the present government
even launched a campaign to open
an account of each citizen. Crores
of new accounts have been opened.
We also tried to investigate if
opening accounts and carrying
out welfare schemes is prudent for
banks without getting any support
from the government. The financial position of banks is already
poor due to NPAs and an extra
burden of raising capital by Rs
2.4 lakh crore. The government
has only been able to arrange Rs
70,000 crore in the next few years.
Even share markets are not favourably placed to allow banks to raise
the same capital from the share
markets, when profits of banks
are dipping and the share market
is looking at Chinese share mar-

ket with a lot of suspicion as it is


believed that the Shanghai share
market is being propped up by the
government creating an artificial
condition. The economic signals
from the US economy picking up
and Federal Reserve interest rates
on deposits going up are also sending a chill down the spine of a lot
of emerging markets.
Transparency is the biggest
demand and RBI governor Raghuram Rajan is quoted at snapping at the feet of banks for hiding
information regarding NPAs. If it
becomes a public perception that
banks are trying to hide NPAs then
the people may lose confidence in
the banking thinking what makes
banks conceal facts. They may be
led to believe there is something
fishy in banks.
KOI decided to bring out a newspaper in this context and for the
mission. We have planned TV serials also that reveal how banks
are swindled by willful defaulters sometimes in connivance with
some bankers only.
So much is the resistance to reveal information that KOI had to
file an RTI asking banks as to who
can reveal what information in as
small a unit as a branch so that
the people feel safe about their
accounts held by a branch. But,
branches are not coming out with
information.
There are bankers who just do not
entertain queries of my reporter colleagues, nor do they reply to mails
and short messages over phone.
The newspaper in print is an attempt to demand for the people
the information which is their
right as their accounts are held by
branches. They also have a democratic right of Freedom of Speech.
The freedom of speech cannot be
exercised unless authorities respect an individuals right to information which banks are refusing to honour.
A sentiment of a crusader to
bring in transparency in banks is
gathering steam as we progress.
We are committed to redefine
transparency in the banking sec tor
at any cost.

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05

Savings

Post offices plan rural foray with CBS


AKARSH SHARMA

info@khushbooofindia.com

Chandigarh: Post offices are all set


to go online, just like public sector
banks, with its new equipment and
software. Aiming to promote core
banking services (CBS) in rural areas, they are also angling for implementing Pradhan Mantri Jan Dhan
Yojana and other schemes from this
platform having a widespread network in rural areas.
In an interview to Khushboo of
India, Hari Mohan, Superintendent
of Post Office, Chandigarh Postal
Division, said, Electricity cuts are
a major bottleneck in rural areas so
we are ready to instal ICT devices
in rural post offices. The equipment
has reached Grand Post Office, Sector 17. We are scheduling technical
training sessions for our employees
working in rural post offices.
He further said, There are 50
post offices in Chandigarh, including 39 in rural areas. Chandigarh
Grand Post Office (GPO) in Sector
17, New Secretariat, Raj Bhavan,
Manimajra, Sectors 11, 12, 15, 18
and Sector 9 branches are already
online. With the help of CBS, the
amount of monthly instalment
can be transferred from saving accounts to recurring deposits (RD)
and fixed deposits (FD) in post offices. We provide interest rate better than the banks to senior citizens
on fixed deposits.
Saying that their banking services
were on track as all their employees
have post office saving accounts,
he added that there were plans to
open ATMs. In fact, our first ATM
in Chandigarh division has been installed at Sector 17 and the second
one is proposed at Sector 19. Amritsar Grant Post Office has also got an
ATM, he said.
Hari Mohan suggested that even
Pradhan Mantri Jan Dhan Yojana
and other schemes of the package
could prove fruitful if these were introduced in post offices.
With the banks claiming PMJDY
and other schemes are extra burden
on them, India Post with its network
of 1,55,000 branches all over the
country can run these to advantage.
As 90 per cent of post offices are in
rural areas, PMJDYs benefit can be
maximised as many villagers do not
even have saving accounts. Sukanya
Samridhi Yojana, which all public
sector banks are offering, is part of
post office package.

Story in points
n
Of the 50 branches of post office

in Chandigarh, all urban branches


have gone online.
n
More than 21,000 accounts have
been opened under Sukanya
Samridhi Yojana in post offices
under Chandigarh division
n
India Post also providing Rural
Postal Life Insurance Scheme
n
Post offices are using core banking
services to promote post office
savings
n
Post offices are beginning to
provide ATM services

Senior GPO officers said, In


Chandigarh division, we have received a very good response to Sukanya Samridhi Yojana and have
opened more than 21,000 accounts
under it. Ramesh Kumar, a fruit
seller at Manimajra, said, I came to
know about the scheme being provided by post offices and opened the
account of my five-year-old daughter at Manimajra post office.
Grandmother of another girl from
Mauli Jagran said, My son and
daughter-in-law died in a road accident two years ago and I take care
of their daughter Supriya. When I
came to know about this scheme at
a camp organised by the post office,
I opened an account for Supriya at
Mauli Jagran post office.
India Post is also providing Postal
Life Insurance Scheme and Rural Postal Life Insurance Scheme.
The insurance policy and plans are
adaptable to requirements of the
buyer. Now, with the help of online
system even the policy premium can
be transferred from post office saving account to policy account.
In rural areas, the wages are being
paid to workers through post office
saving accounts after working for
200 days under Mahatma Gandhi
National Rural Employment Guarantee Act (MNREGA) programme.
Notably, India Post has highest
deposits of Rs 6 lakh crore after the
largest public sector bank -- State
Bank of India -- and this money is
used by government for development of the country.
The proposal of Post Bank of India
has been hanging fire due to Ministry
of Finances opposition. It has been
claiming that post offices do not have
expertise to provide total banking services, such as handling credit.

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Life in banks
Bank employees rank high on STRESS SCALE
BHUPINDER SHARMA

How to de-stress

Chandigarh: Bank employees


across the country are grappling
with new problems of stress, and
more disturbingly suicide. Around
11 officers have reportedly killed
themselves recently due to depression while many more are battling
stress triggered by the target issues,
mounting Non Performing Assets
(NPAs) and senior officers misuse
of unbridled power.
Such is the relevance of these topics with officials that when a report dealing with stress among the
banking staff was published on our
website, Khushbooofindia.co.in, it
generated a good response and widespread discussion.
No wonder this happened as words
like anxiety, frustration, depression and inferiority complex have
become quite common in lexicon of
bank employees who usually talked
about accounts and balance sheets.
Depression took toll on lives of two
officers recently. Kuldeep Sharma
and Ajay Sehgal killed themselves
in two incidents. While Sharma was
branch manager of Union Banks
Agra branch and Sehgal was senior
manager of Punjab National Bank.
Sehgal even wrote in his suicide
note that he did so under pressure
exerted by two officials A K Gupta
and J K Gupta.
Recently, body of an officer of
UCO Bank, Varinder Sharma, was
found dead on railway tracks at Ambala. Sharma had taken VRS due to
stress from his bank a few days ago.
Such is the enormity of the situation that a study found that as high

According to various experts, with


the help of proper techniques stress
level can be reduced to a great
extent. Among this meditation is
foremost. It is an integral part of the
science of yoga and has a direct and
positive impact on the mind giving
it strength and power to resist
pressure. Pranayam (brain stilling
exercise) is a holistic strategy to
bring peace to mind.

info@khushbooofindia.co.in

What can management do


n
Take adequate steps to redesign

jobs, which are taxing to employees


abilities and capacities
n
Adequate role clarification whenever necessary to eliminate role
ambiguity
n
Introduction of more job-oriented
training programmes which
improve employees skill and their
confidence to work effectively
n
Encouraging open channel of communication to deal work related stress
n
Undertaking stress audit at all levels
in the organisation to identify areas
for improvement of conditions of job
n
Good ambience at work place can
help employees

as 60 per cent of the staff were suffering from stress in a few bank
branches. According to various
medical experts, they have usually
started finding symptoms of stress
among the bankers. These often
manifest in health problems, like
heart diseases, ulcers, arthritis, increased smoking, cardiovascular,
gastrointestinal, endocrine and other
disorders. This also leads to psychological and behavioural problems,
including change of moods, inferiority complex, widespread resentment,
reduced aspirations and self-esteem.
Dr Jasmine, a senior psychiatrist
with the Psychiatry Department at
Government Medical College and
Hospital, Sector 32, Chandigarh,
said, We are getting cases of more
than one dozen bankers in our OPD
alone every month. They usually
complain of anxiety, stress and frustration which later leads to depression and these numbers are gradually increasing.
Other clinics, government hospitals
and dispensaries too are seeing an upward trend in such cases. This is of
serious concern to the banking industry, which is considered as backbone
of economy of the country.
Officials mostly complain of
stress due to not able to reach targets, public humiliation by seniors
and tension due to recovery of bad
loans, added Dr Jasmine.
Parveen Vij, a former branch manager of Zirakpur branch of UCO
Bank, who had taken voluntary
retirement under forcible circumstances, raises several questions on
the banking sector at large. In his
autobiography, Ghav Aaj Bhi Hare
Hain, he not only tried to elaborate
on the pathetic condition of bankers
but also conveyed the plight of those
officers, who were given big targets
of advances and NPA recoveries.
Seniors intentionally give us

huge targets of advances besides


allocating task of recovery of bad
loans which were not done by us,
said Vij. He added besides these
seniors also force officers to recommend loans to those parties, which
do not fulfill the required conditions
of the banks.
If we do not obey the orders of
seniors, they blackmail us by holding out the threat of spoiling our
Annual Confidential Reports, besides transferring us to faraway
places. he added. This creates
pressure on our minds.

Some bankers on the condition of


anonymity also told Khushboo of
India that they are humiliated by
their seniors in the presence of other
counterparts during monthly review
meetings of advances and recovery
of NPAs. Vij himself was admitted
to Inscol Hospital in Chandigarh for
stress during his job at UCO Bank
in Chandigarh.
A recent cross-sectional study
conducted on 12 banks in urban
Puducherry revealed prevalence
of stress level at 60 per cent among
various employees, including
managerial, official and clerical
staff of selected banks. Another
survey on banks also found high
and very high level of stress in
the 75.5 per cent of staff besides
stress level at 95 per cent among
employees there.
A Khushboo of India team also
during its visits to various banks in
Chandigarh found that 80 per cent
of staff under stress and pressure.
Speaking about working conditions of employees, Deepak Sharma, who is state secretary of All
India Bank Officers Confederation

(AIBOC), said, the job nature of


banking employees is very tedious
as it involves direct customer interaction at all levels.
A large number of bankers are
facing high stress levels because of
their job and the reasons behind it
are long working hours, improper reward system, lack of job autonomy,
organisational culture, role conflict
and the main reason is lack of management support to employees.
Not only health but personal life
of bankers has also been affected.
Most employees are unable to spend
time at home or with their families
as on all days of week they are
working. On Sundays too they are
busy as they have to launch various
schemes, organise loan melas and
attend emergency meetings with
senior officers.
When asked about job pressure, S
K Kalra, MD and CEO of Andhra
Bank, admitted it but said,We cant
do anything about it.
We all know about it but are helpless. We ask officers to release their
tensions but how it is to be done is
up to them, he said.

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07

DRTs

Chandigarh DRTs inundated with cases;


delays leading to growth of NPAs
Wilful defaulters, erring officials misuse tribunal process to prolong cases
MUNISH NAGAR

info@khushbooofindia.co.in

The Debt Recovery Tribunals


(DRTs) meant for speedy disposal
and recovery of loans of public sector banks seem to have lost sight
of their main objective as Chandigarhs both tribunals are flooded
with cases.
As a result the cases keep lingering on in DRTs and delays are
increasing the growth of Non Performing Assets (NPAs) with the
banks.
The two DRTs approximately list
70-80 cases daily and out of these
very few get disposed of. The Debt
Recovery Tribunal-1 jurisdiction
extends to Chandigarh, Haryana
and Himachal Pradesh while DRT2 gets cases from Punjab.
Requesting anonymity, an official
of DRT-1, said, More than 60 cases
come up in the tribunal everyday,
including new and old. The presiding officer hears all of them but the
disposal or settlement is even less
than five.
When asked about delays, the official blamed it on the staff crunch
and wide jurisdiction of DRT-1. He
said that the tribunal had two posts
of recovery officers while one position was vacant, the second officer
was on maternity leave.
The official added, Often litigants do not complete their paperwork and its quite obvious that in
such instances the case is put off to
the next hearing. Even due to rush,
litigants have to wait for months for
hearing. This sometimes leads to a
wilful defaulter getting benefit.
Often bank officials, who are in
cahoots with borrowers, also profit
from the system as they know cases
take time in the tribunal. So they deliberately adopt tricks for postponing the cases by making excuses in
the tribunal or providing incomplete
documents.
Talking to Khushboo Of India,
Ashok Pal Jagga, President of
Chandigarh DRT Bar Association,
said, There are multiple reasons
for the delay in the cases. One is
staff crunch in DRT-1 because the
both posts of recovery officers are

Defaulters, bank officials make hay


An official of Oriental Bank of India, who left his job in protest against the bank,
said, Whenever a case goes to a tribunal, the final settlement should be on the
principal amount. The erring bank officials often working with borrowers delay
the cases because the borrower knows that whenever he or she has to return
the loan under settlement, they will have to repay only the principal amount.
However, a senior police officer of Chandigarh Police told KOI, In big loan
cases, bank officials are in tandem with borrowers. So, the delays in the cases
are beneficial for both of them. The officials save their skins because during the
delay period they get transferred with promotions to other stations.
Talking to KOI, Debt Recovery Appellate Tribunal Bar Association President B S
Nagar said, The tribunal hears approximately 30 cases regularly and decides four
or five cases. The delay depends on the types of cases as some can be disposed
of within months and there other which can continue for two-three years. The
borrower often wants to prolong them and often the banks want to dispose of
them as soon as possible. The delay depends on the cases and nature of litigants.

Why were DRTs established?


The Debt Recovery Tribunals were established by the Government of India
under an Act of Parliament (Act 51 of 1993) for expeditious adjudication and
recovery of debts due to banks and financial institutions.
The DRT is also the appellate authority for appeals filed against the proceedings
initiated by secured creditors under the Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest Act.
There are 33 DRTs across India and three DRATs in Delhi, Mumbai and Chennai.
They function under the ambit of the Finance Ministry. The appellate authority
has to be headed by a retired high court judge.
Given the current state of government-owned banks, all of them are saddled with
bad loans. The DRTs should have been seen as their saviour, ensuring they got their
money back quickly. But the tribunals have been bogged down by inadequate
infrastructure and red tapism, with cases taking years, even decades, to be decided.

lying vacant. Second is that there


is no proper staff against the sanctioned posts in the tribunal. The
Ministry of Finance is also aware
about this but it is least bothered
about the problems in the tribunal.
Ultimately, the delay is leading to
the growth of NPAs.
However, Presiding Officer of
DRT-1 Harcharan Singh was not
available for comments.
Same is the situation in DRT-2.
Being run from a small portion of
Punjab National Bank building in
Sector 17, this tribunal gets cases
from Punjab. According to information, approximately 75 cases come
up regularly. Of this, only three-four
are decided daily.
The shortage of employees ails
this tribunal also. Wilful defaulters
take advantage of the fact as they
get time for settlement of the cases.

They know longer it takes to decide


on the case, more are their chances
of getting away by paying just the
principal amount or less at the time
of settlement.
Harinder Pal Singh, new President of Punjab DRT Bar Association, said, We have written to the
Secretary, Ministry of Finance, that
there is a staff shortage in DRT-2.
Due to this the cases are being delayed which is helping erring bank
officials and defaulters.
The speedy disposal of the cases
is top on our agenda because it saves
the time of litigants. This will help
recovering bad loans because its
public money lying in the banks.
When the cases are decided quickly
then its obvious that the both erring
bank officials and wilful defaulters
come to fear the law.
When KOI tried to contact, Pre-

Who is at the receiving end?


The delay in the cases leads to growth of NPAs and public is at the receiving end

because its their money that is with the banks. When the banks cannot get their
loans back then its clear that they will not earn much profit. Ultimately, the public
is the sufferer as the late repayment of loans lead to lesser rate of interest on saving accounts and under different schemes.
The countrys economy too is in danger if the bad loans cannot be recovered
on time as already the public sector banks NPAs have reached more than Rs 2.5
lakh crore.

siding Officer of DRT-2 Akshay


Bippin, over this issue, he refused to
meet the KOI correspondent saying
he was busy.
Reeling under rising NPAs and
lingering cases in DRTs, bank officials are of the opinion that the
bank should settle the these under one-time settlement (OTS)
schemes so that the public money
can be recovered.
Bharat Bhushan Mittal, a former
senior officer of Union Bank of
India, said, Due to the delays in
the tribunal or courts, the interest
on loan increases. I have witnessed
a case in my career, which went on
for eight years but finally the bank
recovered the full loan. Though it
resulted in wastage of time, money
and manpower of the bank.
In my opinion, the banks should
adopt OTS solution of the loan re-

payment instead approaching the


courts to avoid delays or either the
tribunals should speed up the process which seems impossible, Mittal said.
Santosh Kumar, a retired bank
officer of State Bank of Patiala,
said, The banks should strengthen
their own system to disburse the
loans because whenever borrower
defaults and approaches the DRT,
it means trouble for them. The
borrower gets hearing put off by
deliberately bringing wrong documents because there are so many
cases coming up in the tribunal.
After the decision at the tribunal, the borrowers often approach
Debt Recovery Appellate Tribunal
(DRAT) or high court. In sub judice matter, the loan amount is not
easy to recover till the disposal or
settlement.

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Right To Information

SBI shows transparency,


furnishes details under
RTI Act
Many PSBs avoided
giving information

GOOD PERFORMERS
THE BANKS WHO RESPONDED WELL
AND RESPECTED RTI ACT
1) STATE BANK OF INDIA.
2) BANK OF MAHARASHTRA.
3) PUNJAB AND SIND BANK
4) ALLAHABAD BANK
5) CANARA BANK
6) BANK OF BARODA

WORST PERFORMERS
THE BANKS TOTALLY AVOIDED
INFORMATION OR GAVE IT PARTLY

MUNISH NAGAR

1) IDBI BANK

info@khushbooofindia.co.in

Maintaining transparency in its


functioning, the top public sector
bank (PSB), State Bank of India,
Local Head Office, Sector 17,
has provided all the information
sought under the RTI Act, 2005.
This came even as other PSBs
failed to give details, citing Sections 3 and 8 of the Act.
Khushboo Of India had sought
the information regarding Non Performing Assets (NPAs), Potential
Non Performing Assets (PNPAs),
restructuring of the accounts and
quarterly reports regarding these.

Transparency scale

2) STATE BANK OF PATIALA, LUDHIANA


3) ANDHRA BANK
4) UNITED BANK OF INDIA
5) SBP, ZONAL OFFICE

Why the State Bank Of India replied while maintaining full transparency and other banks avoided
information is a big question in
front of the other PSBs, who tried to
escape the truth by taking the shield
of RTI sections.
Regarding the NPAs, SBI clearly
said that its LHOs NPAs were more
than six per cent.
Earlier, KOI had filed RTI ap-

plication with SBI but the bank


quoting a section of the RTI Act
did not provide the data. Then KOI
requested SBI that it was countrys
first PSB and information sought
was not personal but in public interest. Moreover, KOI supported
the cause of Save Public Money
slogan given by the Ministry of Finance. The bank gave the information after the request.

6) VIJAYA BANK
7) BANK OF INDIA
8) ORIENTAL BANK OF COMMERCE
9) SYNDICATE BANK
10) PUNJAB NATIONAL BANK
11) STATE BANK OF BIKANER AND JAIPUR
12) CENTRAL BANK OF INDIA
13) INDIAN OVERSEES BANK
14) INDIAN BANK
15) CORPORATION BANK

SBI replied to all the three questions


1) UP TO THE FINANCIAL YEAR MARCH 2015

2) QUARTERLY REPORT FROM APRIL, 2015 TO JUNE, 2015

3) QUARTERLY REPORT FROM JULY 2015 TILL SEPTEMBER

Total number of NPA accounts

Total number of NPA accounts

69,031

72,236

Target to regional office for the recovery of NPAs,


PNPAs and restructuring accounts:

Total number of Potential NPA accounts

Total amount of NPA accounts

65,389

`2,356.19 crore

Number of restructuring accounts

Total number of recovery in NPAs,

258

Total advances

`39,385.73 crore

PNPAs and restructuring accounts

`209.73 crore
Total increased number
of PNPAs accounts

504

Total number of regularised


PNPA accounts

NA

Total number of
restructuring accounts

263

Total number of restructuring


accounts converted into NPA
accounts after restructuring

Total amount of advances:

`38,730.71 crore

`325 crore

circle target for full FY 2015-16 NPA accounts


Recovery policies adopted by the regional office
to recover bank due: Soft and hard recovery
measures, notices, compromises, SARFAESI
action and DRT.

Target of the region of the bank for Expectation estimated by the bank to recover the
bank dues in NPAs, PNPAs and restructuring
the recovery of NPA accounts:
during this quarter

`325.20 crore
circle target for FY 2015-16

`325.20 crore in NPA accounts

Amount recovered by banks


regional office in NPAs, PNPAs and
restructuring accounts:

`290.73 crore
NPA accounts considered
as wilful defaulters

121

Design: Garima Awasthi


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