HDFC tops Forbes' list of best Indian banks, SBI not even in top 10

After HDFC Bank, another private lender ICICI Bank took the second spot, while DBS was at the third rank in Forbes list of Indian banks

Forbes has compiled a first-ever list of the World's Best Bank 2019 in terms of customer services and technological advancements. The private lender, HDFC Bank, was ranked at the top of the list. However, India's largest public sector bank, the State Bank of India (SBI), did not even make it to top 10 of the list and was ranked 11th by the customers.

"We are extremely humbled to be ranked No. 1 by the customers. Our customer has always been at the heart of everything we do since we set out to create a 'World-Class Indian Bank 25 years ago. On behalf of all my colleagues, I would like to thank each and every customer for reposing their trust in us through the years," Money Control quoted HDFC Bank's Managing Director Aditya Puri as saying. HDFC Bank claims to provide the best of its technological features to its 43 million customers.

After HDFC Bank, another private lender ICICI Bank took the second spot, while DBS was at the third rank in Forbes list of Indian banks. Interestingly, Kotak Mahindra Bank and IDFC Bank had managed to gain the fourth and fifth spot respectively.

Syndicate Bank, PNB, Allahabad Bank, Vijaya Bank and Axis Bank were ranked from sixth to tenth respectively. On the other hand, the country's second largest public sector bank, Bank of Baroda (BoB) was ranked 16th and was followed by Paytm Payments Bank.  Canara Bank was placed at the 30th position by customers.

Forbes had partnered with Statista, a market research company, to measure the best banks in 23 countries. Interestingly, this survey ignored any financial performances like P&L statements and balance sheets in favour of a customer's opinion. The survey compiled data from around 40,000 customers around the world for their opinions on their banking relationships. The banks were rated on the basis of 5 key attributes - trust, digital services, financial advice and fees.

AIBEA LETTER TO RBI ON LVB MERGER

Ex Bankers May No Longer Able to Represent Unions

The Madras High Court has suggested to the law commission and ministry of labour and welfare to amend the Trade Union Act to stop outsiders, includingformer employees, from being members or office bearers of employees’ trade unions. Currently, employees’ unions in Banks and other several establishments are headed by non-employees.

“Even after retirement, if a person is allowed to continue as leader (of employees’ union), it will abrogate the powers of the trade union, which is meant for collective bargaining. Serving employees alone are in a better position to understand the difficulties faced by other employees. Therefore, the membership of any union should be restricted only to the serving employees of the establishment,” Justice N Kirubakaran said in an order last week. 

 Further, Justice N Kirubakaran said though the retired employees could continue as members and office-bearers of the union, they could not negotiate with the bank on behalf of the employees. Citing the Industrial Disputes Act, the bench said an honorary member was “not entitled to represent employees.”

The matter pertains to a petition filed by S Valaiyapathy, an employee of Indian Overseas Bank, seeking to restrain two retired employees who continued as office bearers of the union from negotiating with the bank on issues concerning the employees. 

Valaiyapathy’s counsel submitted that their continuation in top positions of the union after retirement was in violation of the bank’s code of discipline. He pointed out a Supreme Court ruling, which said that “a representative who is not in the employment of the establishment cannot represent the employee.”

Observing that the two office bearers were holding the post of president and secretary for the last 15 and 23 years respectively, it said: “Concentration of power is against the principles of democracy and socialism.” The court then restrained the two former employees. 

The court also asked the government enforce Section 3 of the Industrial Disputes Act to ensure that establishments with hundred or more employees constitute works committees comprising of representatives of employers.

Lakshmi Vilas Bank Approves Merger With Indiabulls Housing Finance

The board of The Lakshmi Vilas Bank Ltd. has approved a scheme of amalgamation with Indiabulls Housing Finance Ltd., the two entities said in separate notifications to stock exchanges on Friday.

For every one share of Rs 10 each, shareholders of Lakshmi Vilas Bank will receive 0.14 equity share of Rs 2 each of Indiabulls Housing Finance, the bank said in its filing.

The merger will create a large, healthy and diverse asset book, said the bank in its statement. It will also allow them to collectively foray into newer businesses that help increase fee income, the bank added. “The merger will create a stable low-cost funding in the form of public deposits and expanded distribution franchise,” Indiabulls Finance said in its statement.

The merger will need the approval of the Reserve Bank of India. Typically, the regulator does not agree to a bank licence transfer as part of a merger. As such, the licence will continue to be held by Lakshmi Vilas Bank.

Post the merger, promoters of Indiabulls Housing Finance will hold 19.5 percent in the entity in return for the current 21.6 percent they hold in the non-bank lender. The promoters will need RBI approval for holding more than 10 percent in the bank.

The exposure that the Indiabulls Group has in the real estate business will be a factor of consideration for the regulator, which, in the past, has frowned on an overlap between the real estate and the banking businesses.

What Will The Combined Entity Look Like?

The deal, if approved by the regulators, will have a loan book of Rs 1.23 lakh crore and deposits of Rs 30,787 crore. It will have a gross non performing loans ratio of 3.5 percent and net NPL ratio of 2 percent. Its capital adequacy ratio will stand at 20.6 percent and the tier-1 capital adequacy ratio will be at 14.4 percent.

Return on equity for the combined entity will be 19.2 percent and the return on assets will stand at 2 percent.

What Prompted The Merger?

Non-bank lenders like Indiabulls Housing Finance have faced a tougher fund raising environment since September 2018, when the defaults by Infrastructure Leasing and Financial Services Ltd. roiled the financial markets.

Since then, liquidity has been tougher to come by and the cost has risen.

In the December-ended quarter, Indiabulls Housing Finance saw disbursements fall by 65 percent over the previous three months. The company saw an improvement in the January-March quarter, but disbursements still remain below normal. The company reached about 70 percent of its disbursement target in the three-months ended March, as compared with 40 percent in the October-December period, Ashwini Kumar Hooda, deputy managing director at Indiabulls Housing Finance told BloombergQuint recently. The company was averaging disbursements of about Rs 10,000 crore every quarter before the crisis hit, Hooda said.

Meanwhile, Lakshmi Vilas Bank has faced its own troubles. Bad loans have surged to 13.95 percent and capital adequacy has fallen to 7.57 percent.

IDBI Bank: AIBEA wants RBI to reconsider decision

PSBs' wage negotiations stuck over IBA's performance-linked pay proposal

The eleventh bipartite agreement for wage revision of about 800,000 public sector bank (PSB) employees is stuck over a proposal by the Indian Banks’ Association (IBA) to link salaries of senior executives with performances of banks. This is for the first time that the IBA has proposed a performance-linked pay for banks. While the officers’ union had been opposing the move, now the workman unions have decided to go ahead with talks.  The IBA had proposed that remuneration of grade six and seven be linked to the return on assets and operating profit of banks.

RBI PENSION REVISION

OFFICERS PAY SCALE

STARTING SALARY OF OFFICERS IN PUBLIC SECTOR BANKS PRIVATE BANKS AS PER LATEST WAGE SETTLEMENTS.
Details	HRA Center I (9%)	HRA Center II (8%)	HRA Center III (7.00%)
Officers-Scale I.
Basic pay	23700	23700	23700
Special Allowance	1837	1837	1837
Dearness Allowance( From November 2018 DA rate : 60.7 % of B.P and Spl Allowance)	15501	15501	15501
House Rent Allowance	2133	1896	1659
Total Salary-Officer Scale I	43171	42934	42697
Officers-Scale II.
Basic pay	31705	31705	31705
Special Allowance	2457	2457	2457
Dearness Allowance(From November 2018 DA rate : 60.7 %of B.P and Spl Allowance)	20736	20736	20736
House Rent Allowance	2853	2536	2219
Total Salary-Officer Scale II	57751	57434	57117
Officers-Scale III.
Basic pay	42020	42020	42020
Special Allowance	3257	3257	3257
Dearness Allowance(From November 2018 DA rate : 60.7 % of B.P and Spl Allowance)	27483	27483	27483
House Rent Allowance	3782	3362	2941
Total Salary-Officer Scale III	76542	76122	75701
Officers-Scale IV.
Basic pay	50030	50030	50030
Special Allowance	5003	5003	5003
Dearness Allowance(From November 2018 DA rate : 60.7 % of B.P and Spl Allowance)	33405	33405	33405
House Rent Allowance	4503	4002	3502
Total Salary-Officer Scale IV	92941	92440	91940

• Add to the Salary :City Compensatory Allownce as follows :
• CCA (I) Places in Area 1 and in the State of Goa 4% of Basic Pay Maximum : Rs.870/- p.m
• CCA(II) Places with population of five lakhs and over and State Capitals and Chandigarh,
  Puducherry and Port Blair 3% of Basic Pay Maximum :Rs.600/- p.m.
• House Rent Allowance depends on place of posting
• HRA I : Major A Class Cities and Project Area Centres in Group A 9.00% of Pay
• HRA II : Other places in Area I and Project Area Centres in Group B and State of Goa 8.00% of Pay
• HRA III : Other places 7.00% of Pay
• Dearness Allowance varies quarterly with every rise or fall of four points 0ver 4440 points in the
  "All India Average Working Class Consumer Price Index (General) Base 1960=100".
• Apart from the above major components of salary ,you are eligible at the time of joining bank
  depending on qualification and place of posting :
  
  • 1.Professional Qualification Pay (PQP)
  • 2.Hill and Fuel Allowance
  • 3. Project Area Allowance .

  • 4.Split Duty Allowance etc etc

MEETING TO BE HELD ON 13.03.2019

11th Bipartite 11th Bipartite Wage Revision for Bank Officers and Workmen will be done separately
11th Bipartite Wage Revision for Bank Officers and Workmen will be done separately
Split in UFBU - ET has reported that the process of 11th Bipartite wage negotiation for public sector bank officers and workmen may be done separately. Wage revision in public sector banks takes place in every five years. The 11th bipartite settlement is due from Novemb
11th Bipartite Wage settlement is already pending since 01st Nov 2017. The largest officers union boycotting the talks while the workmen unions are in favour of going ahead with it. 
While the negotiation process for the 11th bipartite settlement may be split , the wage revision is any way likely to be delayed by at least three months following the imposition of model code of conduct before Lok Sabha elections.
IBA has raised its offer to 10% hike but the bipartite talks are stuck as the All India Bank Officers Confederation (AIBOC) is protesting the proposal to leave deputy general managers and general managers out of common wage negotiation purview which would pave the way for bank-wise wage hike for them.

Following this impasse, the five workmen unions led by All India Bank Employees Association are keen to go ahead with negotiation only for their members under the Industrial Dispute Act. Workmen includes clerical and subordinate staff of banks. A final decision will be taken Wednesday at a United Forum of Banks’ Union meeting, AIBEA president Rajen Nagar told ET. 

Differences within the UBFU -- the umbrella body with nine unions -- surfaced publicly in last December when AIBOC observed a one day bank strike on December 21, five day before another strike called by all unions.


IBA had earlier proposed a split mandate for officers up to scale III suggesting bank-wise increment for officers in Scale IV to VII. It is learnt that the bank management body has now proposed to expand the scope of bipartite wage talks up to Scale V officers. DGMs and GMs in public sector banks are in scale VI and scale VII respecti

The updated proposal for officers means bipartite negotiation will now cover 3.76 lakh officers, which is 99.27% of total officers in public sector banks.

“In any case, about three months delay is likely for wage revision benefits to workforce & improvement in superannuation benefits to past pensioners,” another union leader said.

Since the eight bipartite settlement, the wage hike talks have been held jointly for workmen and officers. The 21 public sector banks has over 8.5 lakh people with about 458000 workmen.