BREAKING NEWS ""****Cabinet approves plans to merge PSU banks-The final scheme will be notified by the central government in consultation with the Reserve Bank. post date 23.08.2017****IBA to restrict the negotiations on Charter of Demands of Officers' Associations up to Scale-III only post dated 07.07.2017***** 1st Wage Revision meeting of 11th BP was held on 2-05-2017 T- Tuesday See details outcome. post date 04.05.2017 **********11th BP charter of demand posted 20.09.2016***DA FOR BANK EMPLOYEES FROM FEBRUARY 2017 TO APRIL 2017 0.9% decrease*****Penalty awaits those accepting cash in excess of Rs. 3 lakh and above in any transaction*****INCOME TAX CHART FY 2017-2018******Out of 2.15 lakh ATM in India only 40000 ATM in Rural Are --- HOw the problem solve- blog post date 26.11.2016*****Goods and Services Tax (GST) – What is it and how would it affect Business activity in India ----must read post date 05.08.16****"Bank Merger List finalized in Ministry of Finance See mega list where you are?????******Aug 2016 DA increased 35 slab (3.50%) ie 455 @ 45.50% For Pensioners increase 29 slab****BANK MERGER FINALIZED SEE MERGER LIST OF INDIAN BANK*****Expected DA for MAY 2016 – Bank Employees posted 14.03.2016"****Income Tax Slabs and Rates for FY 2015-16 and AY 2016-17**"Basic comparision Bank Staff vs Lic employee ....See where the Bankers stand.......""**** created inside my main blog please visit for latest 11th BP news first"*****New DA FORM FEB 2016 WILL BE 43% for bank employee****PAN for cash transactions over Rs 2 lakh mandatorys****Comparison of Salary of Bank Staff and Central Govt Staff post 7th CPC must read must read ***** Government Plans to Privatize IDBI Bank: Jayant Sinha*** ****Three Bank may be forced to look at a merger in 1st stage*****Indian Overseas Bank and Bank of India look particularly weak-report by Moody's Investors Service************""

Thursday, September 21, 2017


Dear friends,
Banking system in India is carefully studied under two categories as per the service rendered by the Banking sector to the common man of this country. They are Pre Independence Phase [1786-1947] and Post Independence phase [1947 till date].
The banking facility for the people of India during the Pre independence period and Post independence period shows two different poles of managerial and administrative approach.
The unique identity of the common man during the Pre independence period was the socio- economic exploitation. Though these two approaches show various positive and negative developments for the Indian economy, the expectation of the people is to get rid off from these socio-economic exploitations from those capitalistic sector, prevalent during the Pre independence era.
Because, the economic exploitation of the peoples during the Pre-independence period were the symptoms of socio-economic atrocities against the common man by those capitalistic dominance.
Due to this exploitative situation, people were keen to tap an alternate institutions through which their economic standard was getting uplifted.
The development of Banking system during Pre independence Period was derived from ancient Vedic period. During the Pre independence period the main objective of the banking system was meant for serving the highest business society only, with the support of the rulers.
The colonization made the banking system to serve for the purpose of developing the business of an individual capitalists. From that stage, banking system was emerged due to swadeshi movement in India for serving the people of India.
Thus shifting of banking industry from an unilateral service to multi focal services. We can understand the growth of our banking industry with the intensified contribution of our people. At the same time, people harvested the benefit of the growth of Banking industry vide various social schemes.
Though these schemes were initiated by the government, implementation, and the end use were assured by our PSB. Thus growth of the PSB and the people were achieved simultaneously.
From the following paragraphs we can understand that PSB and the people are inseparable.
Banking in India, in the modern sense, originated in the last decades of the 18th century. Among the first banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32; and the General Bank of India, established in 1786 but failed in 1791.
The period between 1906 and 1911 saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to establish banks of and for the Indian community.
A number of banks established then have survived to the present such as Catholic Syrian bank,The South Indian bank, Bank of India, Corporation Bank,Indian Bank, Bank of Baroda, Canara Bank, and central Bank of India.
The fervour of Swadeshi movement led to the establishment of many private banks in Dakshina kannada and Udupi district, which were unified earlier and known by the name South Canara (South Kanara) district.
Four nationalised banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".
During the First World war (1914–1918) through the end of the Second World war (1939–1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918.
Bank of Calcutta was started in June 1806. In 1809, it was renamed as the Bank of Bengal. This was one of the three banks funded by a presidency government, and the other two were the Bank of Bombay in 1840 and the Bank of Madras in 1843.
The three banks were merged in 1921 to form the Imperial Bank of India, which upon India's independence, became the State bank of India in 1955. These small mergers were planned for the better administrative purposes only.
For many years the presidency banks had acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935, under the Reserve bank of India Act 1934.
The Indian banking system at the time of independence was under Private ownership. The rural population of the country had to depend upon money lender for their requirement. A huge number of people lost their life’s earnings. The common man had no access to banking facilities, and the PARTICIPATION OF RURAL POPULATION WAS NIL.
Growth of Private sector banks during this period was massive and paved ways for a unilateral capitalism. It was found that the private sector banks in the country did not provide the required credit disbursal support, especially to the unorganized sector.
We have our major portion of our human resources in this unorganized sector from our Rural back ground that is back bone of our country. The unorganized sector consisting of farmers, small scale industries, transporters, self-employed and professionals had to largely depend on private moneylenders who exploited them with extremely high interest rates.
During this period, class banking was prominent rather than supporting the rural mass. A massive shifting was required at that time from CLASS BANKING TO MASS BANKING to bring Banking facilities at the door steps of the rural peoples to protect them from economic exploitation from local money lenders and to safeguard the hard earned money of those rural peoples.
This has led the government to turn their attention towards ‘TO PROTECT THE PUBLIC MONEY AND TO SERVE THE GROSS ROOT RURAL MASS AGAINT ECONOMIC EXPLOITATION”. Because, the government realized that banking industry only can serve for the upliftment of our Indian economy and serve the people of India.
Thus, pre independence period also witnessed that, Banking industry is paramount for the Indian economy. But the private sector banks were working on the basis of profit making only without the conscious of serving the people. Government realized that Public sector Banking only can serve both for the upliftment of our Indian economy and the people of India.
People of India were also keen to accept a strong public sector forum, by which these ill effects of their day to day well being can be eradicated. The much awaited demand of the people was fulfilled by the government in the name of NATIONALISATION OF ALL THE PRIVATE SECTOR BANKS.
Despite the provisions, control and regulations of the Reserve bank of India, banks in India except the SBI, all the remaining banks owned and operated by private persons. By the 1960s, the Indian banking industry had become an important tool to facilitate the development of the Indian economy.
At the same time, it had emerged as a large employer, and a debate was going around strongly in favour of nationalization of the banking industry. Smt Indira gandhi, the then Prime Minister of India, expressed the intention of the Government of India in the annual conference of the All India Congress Meeting in a paper titled "Stray thoughts on Bank Nationalization. The meeting received the presentation with enthusiasm.
Thereafter, her move was swift and sudden. The Government of India issued an ordinance ('Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969') and nationalized 14 largest commercial banks with effect from the midnight of 19 July 1969.
These banks contained 85 percent of bank deposits in the country. Sri Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August 1969.
A second dose of nationalisation of 6 more commercial banks followed in 1980. The stated reason for the nationalisation was to give the government more control of credit delivery. With the second dose of nationalisation, the Government of India controlled around 91% of the banking business of India.
To solve this issues and better development of the country, the government of India initiated the nationalization of our Central Bank of India [Reserve Bank of India] in 1949 followed with 14 major banks in 1969.The basic idea behind nationalisation was to serve the poor and not to earn profit, and also to boost up our Indian economy.
The objectives of initiating such an act was to rapidly expand the bank branches and channeling the credit in accordance with the set targets. These banks were given quantitative targets for the distribution of credit to specific sectors in the economy and for the expansion of their network through branches.
Following this initiative, the government nationalized seven more scheduled commercial banks in 1980, This move gave the impression that in case a private bank grew beyond the size, it would be brought under ambit of nationalization.
The second nationalization took place in order to affirm more control over the Indian banking system. The Indian banking system was becoming increasingly important to expand their presence unexposed, even the poverty ridden parts of the country. It was also enabled to increase priority sector lending and sourced the funds to bridge the budgetary deficits. Along with the nationalization of the Indian banks, the government also set the lending targets for priority sector.
After Nationalisation, government paved the way for providing services of the Banking industry towards the multi facial sector [PRIORITY AND NON PRIORITY] of the people of India. Their intention was that, Indian banking sector should reach all the sectors of the people without making much profit from the banking business. During this period the government objective was for the development of our Indian economy and the impartial services to all the sector of the peoples. Moreover, government realized that their objective will be fulfilled only with the help of the PUBLIC SECTOR BANKS ONLY.
The aspiration of the government and the people were completely fulfilled by our PUBLIC SECTOR BANKS ONLY.
This government call was against the interest of the Private sector banks. Because, their business was PROFIT ORIENTED. During the period between 1947 and 1969, our country faced a massive failure of the PRIVATE SECTOR BANKS once again.
Even after nationalisation, private sector banks continued to fail. One of the most prominent example was the high-profile Global Trust Bank. GTB was eventually merged with Oriental Bank of Commerce in 2003. Between 1969 and 2014, TWENTY THREE private sector banks were merged with public sector banks for their inefficiency.
In 1960, the State Bank of India was given control of eight state-associated banks under the State Bank of India (Subsidiary Banks) Act, 1959. These were till recently called as associate Banks.
In 1969 the Indian Government nationalized 14 major private banks; one of the Big Bank was Bank of India. In 1980, 6 more private banks were nationalised. These nationalised banks were the majority of lenders in the Indian economy. They dominate the banking sector because of their large size and widespread networks.
The Indian banking sector is broadly classified into Scheduled banks and non-scheduled banks. The scheduled banks are those included under the second Schedule of the Reserve Bank of India Act, 1934.
The scheduled banks are further classified into: nationalised banks; State Bank of India and its associates; Regional Rural Bank (RRBs); foreign banks; and other Indian private sector banks.
The term commercial banks refer to both scheduled and non-scheduled commercial banks regulated under the Banking regulation Act 1949. All these sector wise divisions of the PSB, leads to unconditional service, for the benefit both the PRIORITY AND NON PRIORITY sectors of the people of India.
The policy makers also realized that the Public policy and the banking policies are inseparable. Because, PSB are meant for the Publics only. Moreover PSB and the people of our country are interwoven, with the common agenda with MUTUAL INTEREST.
PREAMBLE of our Constitution of India, BY THE PEOPLE AND FOR THE PEOPLE IS CLEARLY VISIBLE IN OUR PUBLIC SECTOR BANKING ONLY. Any Private sector banks in our country cannot enter this zone, which is reserved for the PSB by the people of our country.
As per the government directives, the Public policy can be defined as courses of action, regulatory measures, laws and funding priorities concerning a given topic promulgated by the governmental entity or its representatives.
Banks undertake the two most important functions in an economy of providing payments services for the retail and wholesale markets and channeling savings into investment for ensuring economic activity and growth. Banks are highly leveraged entities using public funds; they have the ability to generate resources, they provide all types of financial services, hence our PSB operations are very much within the purview of public policy.
Here, once again we proves that PSB and the people of India are interwoven, their traditional socio-economic relationships can not be compromised at any cost. Because people of India already witnessed the failure of the private sector banks in various aspects.
Though, the relationships between the PSB and the people of India are understood, our government is very keen towards merger and privatization of this massive economic asset.
The UPA had set up a committee under P.J. Nayak to suggest reforms in public sector banks in January 2014. The main thrust of its recommendations was Privatisation of PSBs.The present government not only endorsed the Nayak Committee report completely, but announced measures to implement the recommendations.
To achieve their ulterior ambition, they are tarnishing the best image being enjoyed by PSBs. In fact, no one in this country gained anything after independence,
When we closely observing the recent development in our Public Sector bank, we can understand the seriousness and treacherous activities done by our regulator and the government in a systematic way to eradicate our PSB in the arena of our Indian banking sector.
The latest those developments are appended below;-
From 2008-Compelling Indian PSB to become a major lender for the Infrastructure sector in India. This is being plunged to cover up the FISCAL DEFICIT of the government at the cost of the PSB.
Now Real estate sector also being included in this lending process. During this period, PSB stood first in lending and now it paved the way for a major NPA status from this sector.
PSBs are being forced to lend more for this sector for long term loan. Now, Tele communication also joins in this race. At the same time they encouraged the Private sector bank to lend more for the retail loans.
During that time onward, Private sector Banks are dominating in the Retail loans.
Then also, we were able to control the NPA level, though the regulator and the government were started tarnishing the best social sector of our Indian economy that is PSB. NPA level was within 1 Lakh crore upto 2015. At the same time, our NPA level suddenly raises from 1 lakh crore to 6.06 Lakh crore in December 2016.
This alarming NPA level is being artificially set out by the regulator and the government. This is not the natural NPA level during 2016. That was an artificial and man made NPA level during that accounting period such as
Thus government and regulator DEFAME our PSB and try to DE-LINK us from our best relation with general public, where no one in this democratic country achieved that after our independence. WILL IT BE SUCCESSFUL?
NEVER. Because, people of India never let down our PSB in the hands of big corporate.
Outcome of Cashless Economy such as, Digital payments, Adhaar based payment, all government ,social sector schemes payments to the publics, Payment of salaries to all the un organized sector and private sector employees, Small bank payments, Online transactions through various Applications , DEMONETISATION programmes is being well organized by the government and regulator, to accumulate the complete money through a single window.
Now the government is ready to channalise this huge money through this single window for the benefit of BIG CORPORATES. Cashless economy brings the normal citizen without cash. This cashless economy and Demonetisation does not bring any benefit for our brethren. But it makes the big corporates, to enhance their business in the Banking sector by sucking the common man income in the name of commission and extra charges.
Government is allowing, giving more interest rate by the Private Banks (CORPORATE OWNERS), and reducing the SB interest rate of the PSB simultaneously forcing the publics to rush towards the Private sector banks for depositing their hard earned money.
Accumulating poor man’s saving for long term basis for their individual business development. Final outcome of those deposits is understood for the economists of this country.
Finally, where they are going? What is their TARGET? Are they are marching towards PRIVATISATION!
The answer is YES. Now, the government and regulator ideology is to
Now, government is mobilizing social media against our PSBs starting from our DEMONETISATION PROGRAMMES. They planned and turn the common man against the PSB to DE LINK PSB FROM PUBLIC.
Thus defaming the PSB in front of our common man. Now, they are making our common man to raise the question’WHY WE SHOULD pay for the alleged inefficiency of PSB.
We have to see the performance of PSBs, which have not only survived the major global economic crisis but also shared the government’s social agenda like the farm loan waiver, the Jan Dhan Yojana, priority sector lending and lending to small and medium enterprises. These are the activities which bring our profitability under pressure.
1. The contribution of Private sector banks in these social welfare schemes is almost NIL.
2. Private sector banks are not ready to share the government’s social responsibilities.
3. Private sector Bank even in the matters of recruitment, they don’t follow the government’s reservation policy.
4. Don’t show any enthusiasm in giving education loans to needy students.
Thus, we can see that privatisation is not the solution for problems facing PSBs. Moreover, Merger is also not the solution for the present situation.
As per the latest development in banking industry we have been informed by our (Regulator) Reserve Bank of India (RBI) HDFC Bank is the second largest private sector lender of country in list of Domestic Systemically Important Bank, (D-SIB).
HDFC is the third largest bank in our country after SBI and ICICI.
As per the RBI directives, our country’s economy is dependent upon these biggest banks.
Because, these banks are perceived as ‘Too Big To Fail” (TBTF) theory. This theory was initiated by the global bankers after the financial crisis 2008.
As per Business dictionary, the “Too Big To Fail theory asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system in the country.
To evade that, those financial institutions must be supported by government when they face potential failure. The government might be tempted to step in if ‘THESE INSTITUTIONS FACES PROBLEMS / FAILURES WITHIN THE COMPANY OR OUTSIDE THE PROBLEMS”.
Bringing an illusion to the citizen of India that, Big financial institution only can serve better for the countrymen, than an individual PSB. Thus cultivate the symptoms of MERGER POLICY indirectly in the minds of the people.
When Global Financial institutions were facing the Crisis during 2008, only financial institution in this globe, to stand firm and proves the stability and confidence to their customers are our Indian Public Sector banks (PSB).
The remaining part of the globe formulated this TBTF theory to safeguard their economic slide, why the same formula is being followed for our Indian financial sector?
Regulator and Controller admit that, failures / collapse are prominent in these Too Big financial institutions also. At the same time, they are predetermined to save those big institutions with amended policies and frame work from time to time. Initially, they were safeguarding the individual PSB.
Afterwards, for the past three years, their policies are against PSB. Now they are supporting the too Big financial institutions only. Why the same strategy is not followed to set right for our individual PSB?
Now the Regulator and Controller are moving towards to set right of the Private sector banks. Bringing hope and confidence among the minds of the people, that Private sector banks are more secure than our PSB. They brainwash the minds of the common man that, PSB are under collapsed state, and the solution is the MERGER POLICY to follow the TBTF theory.
When Regulator and Controller are considering only the Gross NPA as a primary tool to decide the fate of the PSB, it is paramount for them to shows how maximum PSB falls under this poor GNPA status within last three years.
Also, the bifurcation of this Gross NPA is to be disclosed to the common man. The major NPA are coming under POWER, STEEL, ROAD INFRASTRUCTURE AND TEXTILES. My dear friends please spell out, who are the major owners of these sectors. No doubt, they are the major CORPORATES of our poor country.
As per the latest report of our RBI, Just TWELVE ACCOUNTS of corporate loan defaulters that accounts for TWENTY FIVE PERCENT of the total NPA in our Indian banking sector.
Our Regulator instructed banks to file insolvency proceedings against these companies, under the new Insolvency and Bankruptcy Code as per the revised BR Act 2017. The regulator did not explicitly name those12 accounts to the common man till now. Now, RBI is bringing those culprits under their shadow [Overseeing Committee (OC)]. SBI and RRB are brought under this scrutiny.
The treacherous activities of the government and regulator to be put forth in front of the common man that is PUBLIC. Because they are only going to be affected much. We as an employee of the PSB are included in that PUBLIC. Now, as a banker, we also have social responsibility to makes the common man to understand the treacherous developments in our PSB.
Every individual of us should make the common man to identify the danger for their social harmony and security, and explains the public regarding the dangerous situation prevailing in our PSB which would go against the common man.
Dear Brethren, the idea of the existing government is MERGER AND PRIVATISATION. Once this happens, the other recommendations, such as reducing priority sector lending or making it profitable, cutting down on unprofitable banking activities such as lending to small and medium entrepreneurs, will automatically follow.
This would totally defeat the idea of inclusive banking as it is practiced now and was the guiding principle at the time of nationalisation of banks. Besides, if we look at the government’s record, in 2000 too, the then NDA government tried to reduce the government’s share in PSBs but dropped the idea because of the stiff opposition from the Trade Unions and the Left parties. The present political situation is a volatile and a dangerous one towards PSB.
We need to tell the people,
Why it is necessary to save the public sector Bank?
Why concentration of wealth in the hands of a few powerful individuals is not good for the common people?
Why we should learn from the experiences of Japan, Korea and the USA?
Why we need to heed the earlier warnings by the RBI, which said in 2010 that private sector ignored SMEs [small and medium enterprises], agriculture, education and export?
These problems are not pertaining to Public sector banks alone; it is a WAR AGAINST THE WELFARE OF THE PEOPLE OF INDIA. The Public sector Bank is sailing along with the people of India, for their well being from beginning to till date. PSB, are the BOON for their socio-economic upliftment. This treacherous move of the government symbolizes, returning of the Pre-Independence period situation.
It is the moral duty of the each and every individuals of the PSB, to make the people to understand the present danger of the PSB..
We the PSB employees, are the best ambassadors to bring awareness among the people of our country. Because, we are having our banking branches throughout the country. Even, the remote areas are also having our bank branches. We must educate the customers and the public of our country regarding the MERGER AND PRIVATISATION threats by this treacherous government.
Apart from this we must join hands with other PSU organisations in our country, and architect a National Platform to bring all the Public Sector Officers’ Organisation under a single umbrella.
This unity can play a vital role, to arrest these types of ANTI PEOPLE ACTIVITIES. The representation from all the Public Sector enterprises, like Power engineers, Telecom, Insurance, and Railways should come together for this social cause to help the people of India.
We should plan a nationwide campaign to create public awareness. We will do it through street plays, short films and documentaries. We must plan to organise alternative Gyan Sangams to educate people on the tremendous contribution of PSB for the upliftment of the subjugated people of India towards nation building.

Billionaire Rana Kapoor's Yes Bank Is Said To Cut 12% Of Jobs

Yes Bank Ltd. has cut about 12 per cent of its workforce to lower expenses and push technology amid an industry-wide lending slump, said people familiar with the matter.

In its first widespread reduction of jobs since it was founded in 2004, the lender cut about 2,500 roles, the people said, asking not to be identified as they aren't authorized to speak to the media. Most of the cuts are in the bank's sales team, the people said. The bank had 20,851 employees at the end of June, exchange filings show. The Economic Times newspaper had earlier reported about the cuts.

Yes Bank, led by billionaire Chief Executive Officer Rana Kapoor, is an outperformer in India's banking system. It has one of the fastest paces of loan growth while the broader gauge languishes at a two-decade low, because companies staggering under bad debt and excess capacity are awaiting evidence of a pick up in demand before they invest more.

The bank's push toward automation and innovation will make some roles redundant, and other staff cuts were due to natural attrition and "performance-linked actions," a Yes Bank spokesman said by email. More details will be communicated in the September-quarter results, the spokesman said, without sharing the exact number of employees being dismissed.

Yes Bank shares rose as much as 1.9 percent as of 1:14 p.m. in Mumbai on Thursday, and have more than doubled in the past year. The lender had 1,020 branches and loans of 1.4 trillion rupees ($17.6 billion) as of end-June, exchange filings show.

Wednesday, September 20, 2017

Central employees in West Bengal to get salary on 26th September

Due to Durga Puja and Dussera festival, Banks to remain closed from 27th Sep to 2nd October 2017, Central Govt. employees posted in West Bengal will get the salary of September 2017 on 26th of this month.

Cheque Book of six Banks will be invalid from Sept 30

Cheque book of six banks will be invalid from Sept 30. State Bank of India is largest public sector bank, there is a big news for subscribers of SBI subsidiary banks. The cheque of these banks will be invalid after 30 September. Cheque book of six banks will be invalid from Sept 30. So if you are also the bank account holder of these bank, then just submit the application to change the cheque book.
SBI has said that we request customers of SBI’s erstwhile Associate banks and Bharatiya Mahila Bank to apply for new SBI Cheque books. Old cheque books and IFSC codes will be invalid after September 30. Cheque book of six banks will be invalid from Sept 30.
The new cheque book will require submission of application through internet banking, mobile banking, ATM or later in the branch. State Bank of Hyderabad (SBH), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Travancore (SBT), State Bank of Bikaner and Jaipur (SBBJ), SBI, And Bharatiya Mahila Bank (BMMB) has been merged with SBI.
Cheque book of six banks will be invalid from Sept 30 The country’s largest public sector bank has asked the bank account holders to stop cheque usage of these five banks before 11 days. Also, the applications will be deposited right now to get a new cheque book, so that they will not have to worry about transactions after September 30.

Abolishing personal income tax a good idea, but India just not ready yet

India has become largely a tax non-compliant society.” This statement by the Finance Minister Arun Jaitley during his Budget speech earlier this year was not a mere rhetoric. The income tax figures substantiate the argument. Only 2.4 per cent Indians paid income tax in the last financial year 2015-2016.
While 3.7 crore individuals filed income tax returns, 99 lakh of those claimed the yearly income below the exemption limit of Rs 2.5 lakh, leaving just 2.81 crore individuals who actually paid tax. Of these 2.81 crore individuals, mere 24 lakh people showed income above Rs 10 lakh, with only 1.72 lakh reporting an income of above Rs 50 lakh.
Taxing the middle
The meager percentage of taxpayers in India is good enough for many economists to argue against the regressive personal income tax, in which the middle-income group or the salaried class takes the maximum burden, the rich find ways to evade it, and the poor are exempted from it. Of the total 2.81 crore taxpayers, 2.47 crore people earned below Rs 10 lakh or belonged to the middle-income group.
What one can infer clearly from the income tax data is that the middle-income group bears the maximum burden of the tax, while the rich find ways to evade it, and hoard it as black money or in form of assets. Moreover, nearly 90 per cent of India’s employment is in the informal sector. A lot of those people, even while earning enough to fall in the tax bracket, escape the tax net because their incomes are not recorded.
There might be gains…
Many economists, including ruling party leader Subramanian Swamy, argue that abolishing the income tax will make the cash white, and unnecessary holding of assets like gold and real estate property will go down. Reason: People would either start spending or investing money, which they were paying as taxes or were trying to hide from the authorities. Both ways, the cash will flow into the economy accelerating growth. Bank deposits will rise, and as a result, the interest rates will come down, further accelerating industry investments. More industry investments will lead to more employment opportunities.
Albeit, the reform will demand a lot in return. First, it will drastically bring down government revenues; secondly, there is no concrete alternative proposed so far which could help the government meet the revenue shortfall. In the year 2015-2016, the government collected Rs 2.87 lakh crore. If the income tax is abolished, the government will have to — at least — recover this amount to prevent an economic crash either through indirect taxes or other alternatives. So far, the alternatives that are being suggested are at best theoretical and abstract.
Subramanian Swamy says spectrum and coal auction could be a source of government revenues. Another alternative could be of levying taxes on expenditure and bank transactions instead of income. This will need drastic economic reforms like the GST, which is going to take a lot of time, effort and support from all stakeholders. 
… but costs would be higher
Care Ratings Chief Economist Madan Sabnavis does not think abolishing personal tax is a feasible option. The current taxation system is robust, in which each individual pays tax on the basis of ability, Madan Sabnavis says, while raising the question that what would be the revenue model if the income tax is abolished. “If the tax is levied on bank transactions, it will be messy. Who will monitor the transactions for consumption and the transactions for saving?” Madan Sabnavis said in an interview with FE Online. “The current taxation system is equitable and progressive,” he added.
While India debates whether or not to abolish the income tax, there are only ten countries which do not levy a personal income tax, namely, Qatar, Oman, Saudi Arabia, UAE, Bahrain, Kuwait, Bermuda, Cayman Island, Bahamas and Monaco. Interestingly, six of them are oil-rich countries, and earn a majority of revenues from oil trading. The other four are island nations, and have repeatedly figured in conversations about tax evasion.
While doing away with the income tax may seem to be a good idea in theory, the nation seems to be far away from being fully prepared to make up for lost revenues and to build as robust an indirect tax system. 

Monday, September 18, 2017

Mergers will divert banks focus on NPA recovery, says Indian Bank MD Kishor Kharat

Voices against public sector bank mergers are becoming louder. 

After former Reserve Bank of India Governor Raghuram Rajan, here's now a public sector bank boss which has openly aired his views against forced mergers. 

"It's not the right time for mergers," said Indian Bank Managing Director Kishor Kharat. He said that banks would neither get additional capital by way of merger nor there would be any reduction in non-performing assets (NPAs). 

Indian banks in the public sector space are weighed down by steep rise in sticky loans leading to net loss for many lenders and shrinking of capital. About seven of 21 state-run lenders are under Reserve Bank of India's prompt corrective action plan. 

"If merger is pushed (by the government), it will lead to further deterioration of banks' health. Our focus will be diverted," Kharat said in Kolkata at an event organised by Merchants' Chamber of Commerce & Industry. 

The government is keen to reduce the number of public sector banks to 15 from 21 to ensure economies of scale. Finance minister Arun Jaitley said the objective of the merger is to create stronger banks. 

Captains of bigger banks like Bank of BarodaBSE 0.14 %, Canara BankBSE -0.14 % and Punjab National BankBSE 0.03 % are known to have set certain conditions if they are asked to acquire smaller banks to fulfil the government’s agenda. They said that the target banks should be profit-making among other things. 

Former RBI Governor Rajan said that banks are already weak and that it would make mergers even more problematic. "You have explain how it is going to be easy to do that. Why this is going to be helpful and not just another distraction which weakens the entire entity," he had said in a recent interview to ET. 

Kharat said that weak banks need recapitalisation and NPA recovery as a priority. "If money from the top 100 NPA accounts can be recovered, a lot of stress will be eased." 

12,000 Aadhaar enrolment centre at bank by 30th SEPTEMBER 2017 otherwise will impose Rs. 20,000 as fine per uncovered branch ---UIDAI

The UIDAI has given banks one more month to open Aadhaar enrolment centres in a stipulated 10 per cent of branches and will impose Rs. 20,000 as fine per uncovered branch after September 30, CEO Ajay Bhushan Pandey said today.
The Unique Identification Authority of India (UIDAI), in July, had asked private as well as public banks to open Aadhaar enrolment and updation facilities in one out of 10 branches by August-end.
The reprieve of one month has now been granted as many banks sought additional time from the authority for setting up such facilities on their premises.
“Banks approached us saying they need more time, so we have given them till September 30 to set up the facility. Non-compliance after the deadline will attract a fine of Rs. 20,000 per uncovered branch every month,” Pandey told PTI.
This means a bank with 100 branches will need to have Aadhaar enrolment facility in 10 branches.
Failure to open the stipulated facility in, say, five branches even after expiry of the September 30 deadline, would mean that the bank will have to cough up penalty of Rs. 1 lakh in the first month itself (at the rate of Rs. 20,000 per uncovered branch).
Similarly, the penalty will be imposed in subsequent months, also based on the branches that are left uncovered.
Aadhaar, the 12-digit biometric identity number, is required for opening bank accounts and financial transactions of Rs. 50,000 and above.
Existing bank account holders too are required to furnish the Aadhaar number by December 31, 2017.
“This (enrolment facility in bank premises) was done for the convenience of people. Given the requirement of linking Aadhaar with existing bank account and for new bank accounts, having the enrolment and updation facilities within the branches (10 per cent) will ensure that people do not face any difficulty,” Pandey explained the rationale.
Many banks have informed the authority that the process of procuring biometric devices, certification of enrolment operators and identifying enrolment agencies is still on.
“We wanted to give banks a reasonable time to set up the required infrastructure, and one month is a reasonable time,” Pandey said, adding that he did not anticipate any further delay by banks to have the enrolment facilities in place.
The PSU and private banks have been informed about the extension.
There are 1,20,000 bank branches in the country and with this move, 12,000 Aadhaar enrolment and updation centres will have to be set up in those branches.
Many banks are already registrars, but they do not have enrolment centres inside the bank premises today.

When will 11th Bipartite Settlement take place?

Wage Revision of banks employees’ is done through bipartite settlement between UFBU and IBA.  11th bipartite settlement is due from 1st November 2017. Government of Indian has already written a letter followed by a reminder to complete the negotiation process to meet the timelines of 11th bipartite settlement date which is 1st November 2017. After the followup from Government, UFBU has submitted the Charter of Demand for 11th bipartite settlement.
But after that, there is no significant development and there seems no chances of bankers would get their salaries increased on time.
If you look into past trend, it clearly shows that salary revision of bank employees in India are always delayed and salary revision never happen on schedule time. We have complied the data about how much the previous bank wage revisions were delayed. Keeping in mind the past trend, you can guess the actual 11th bipartite settlement date.

During the 10th Bipartite Settlement, there were 20 rounds of negotiations with IBA before final settlement. For next wage revision (11th bipartite settlement), which is due on 01.11.2012, negotiations are yet to start, if it follows the past trend, you can understand, what time it is going to take and when it is going to be implemented

What are your expectations? Give your views in commend box below.

        Due DateActual DateDelay
1st Bipartite settlement1.01.196619.10.19669 months
2nd Bipartite settlement1.01.197012.10.19709 months
3rd Bipartite settlement1.09.19781.08.197911 months
4th Bipartite settlement1.09.198217.09.198424 months
5th Bipartite settlement1.07.198710.04.198921 months
6th Bipartite settlement1.11.199214.02.199528 months
7th Bipartite settlement1.11.199727.03.200029 months
8th Bipartite settlement1.11.200202.06.200532 months
9th Bipartite settlement1.11.200727.04.201030 months
10th Bipartite settlement1.11.201225.05.201530 months

PF, PPF, FDs, NPS and NSC: Tax Benefits How to avail read the articles details

Tax planning is not easy. You may be earning a lot but if you are not able to save enough, neither will you get money in times of need nor can you save on the taxes that you have to pay to the government. Deciding to invest in a particular savings scheme is also tough. One has to take care of several aspects like the returns it will give, lock-in period of investment and more.

“The major objectives from savings schemes are principal protection, meeting long-term financial goals and the tax benefits that they provide,” said Tarun Birani, Founder and CEO of TBNG Capital Advisors. Here, we bring to you five key savings schemes and the benefits that they can make you earn:

1. Employee Provident Fund

Provident fund is a fund for salaried employees. It is a compulsory retirement savings scheme for public as well as private sector employees. The Employees' Provident Fund Organisation under the Ministry of Labour and Employment oversees this fund.

Interest rate:
The interest rate on EPF is decided by the EPFO board every year based on the weighted average return generated by the fund. For fiscal 2016-17, it paid an interest of 8.65 per cent.

Tax benefits:
The amount that you contribute for your EPF will qualify for tax deduction under Section 80C of the Income Tax Act, subject to a maximum of Rs. 1.50 lakh. The interest you earn on your EPF savings every year and the final maturity amount is also exempt from tax.

2. Public Provident Fund

Public Provident Fund (PPF) offers safety with attractive interest rates and returns that are fully exempted from tax. The minimum deposit in a PPF account in a financial year is Rs. 500 and maximum is Rs. 1.5 lakh.

Interest Rate:
Interest rate on PPF and other small savings scheme are reset every quarter. Investors in PPF currently get an interest rate of 7.8 per cent.

Tax benefits:
PPF enjoys EEE or exempt, exempt, exempt status - contribution, interest and maturity proceeds all are tax free.

3. Fixed Deposits

Fixed deposits are one of the most popular savings product available in the country due to their flexibility and liquidity. Fixed deposits, also known as term deposits, offer fixed rate of interest for the entire tenure of deposit.

Interest rate:
Rates of interest vary from bank to bank. For example, State Bank of India revised its FD rates with effect from July 1, 2017 for retail domestic term deposits (fixed deposits below Rs.1 crore). SBI now offers 6.75 per cent interest on one-year fixed deposits compared to 6.9 per cent earlier. But this was for usual FDs which do not give tax-saving benefits.

Tax benefits:
Interest income earned from bank fixed deposits is fully taxable, unlike savings bank account where one gets income tax exemption on interest earned up to Rs. 10,000 a year. In case of bank fixed deposits, banks deduct tax at source (TDS) at the rate of 10 per cent if the interest income for the year is more than Rs. 10,000. TDS is calculated by checking the combined interest income of all branches of a particular bank.

Some banks also offer tax saving fixed deposits. The amount that you invest in these FDs qualify for income tax exemption under section 80C. However, the interest that you earn from a tax-saving FD will be taxable.

4 National Pension Scheme

The National Pension System (NPS) was launched on 1st January, 2004 with the objective of providing retirement income to all the citizens. NPS aims to institute pension reforms and to inculcate a habit of saving for retirement amongst the citizens, states the NPS website (See more details on NPS here:

“NPS although partially taxable does not provide the same tax benefit as EPF. However, considering that it provides greater choice over asset allocation, potential for return enhancement and the additional tax deduction of Rs. 50,000 over and above the Rs. 1.5 lakh that it offers, individual taxpayers, specifically the younger generation,  should consider allocating more funds towards it,” said Mr Birani.

Interest rate:
In case of NPS, returns are market-linked. "In our view, the potential of returns in a market-related investment like NPS is higher than of a guaranteed return instrument like PPF/PF. This is due to two reasons, one is the choice of equity exposure in NPS and secondly the component of professional fund management," Manoj Nagpal, CEO of Outlook Asia Capital, told NDTV Profit.

Tax benefits:
Investments of up to Rs. 2 lakhs (Rs. 1.5 lakh under section 80C and an additional Rs. 50,000 under section 80CCD) is eligible for tax deduction under NPS

5. National Savings Certificates

This savings scheme is offered by the government of India, and is sold in all post offices. Amount invested in this scheme qualifies for tax deduction under section 80C. 

Interest rate:
The rate of interest currently being offered on NSC is 7.9 per cent, according to India Post website.​ The maturity value of a certificate of Rs. 100/- purchased on or after 1.10.2016 shall be Rs. 146.93 after five years.

Tax benefits:
There is no maximum investment limit in NSC and also TDS is not deducted on interest amount. However, interests earned on NSC is taxable.