STATE BANK OF INDIA OFFICERS' ASSOCIATION

[Chennai Circle]
State Bank Buildings,
# 84, Rajaji Salai,
Post Box No.1992,
Chennai - 600 001.

Telephone

Fax

25340226
25340225
25340226

E-mail: sbioacc@yahoo.com
sbioachennaicircle@gmail.com
Website: www.sbioacc.com
www.facebook.com/SBIOACC
Circular to All Unit Secretaries / Members:

No. 56 /08 / 2016

11 th February 2016

Dear Comrade,
Letter to Business Line
I forward herewith the letter I have sent to Business Line for your information and
sharing with others. Time has come for us to dispute the wrong notions propagated by
the newspapers and some economists. Let us all do our best to save Public Sector,
Save Public Sector Banks and Save the country.
With Greetings,
Comradely yours,

(D. THOMAS FRANCO RAJENDRA DEV)

GENERAL SECRETARY

10.02.2016
To
The Editor
Business Line
Dear Sir,
COUNTRY NEEDS PUBLIC SECTOR AND PUBLIC SECTOR BANKS
With reference to the editorial Parity Please dated 5th Feb 2016, everyone will agree that it is
very essential to have persons of integrity and talent on Bank Boards. Public Sector Banks
Board of Directors are cleared by the Central Vigilance Commission and the final approval is
given by the Cabinet Committee for appointment of the Government of India. It is their duty to
ensure that the integrity and talent are not sacrificed for appointing their political supporters. At
present, many posts of Directors including Officer Directors and Workmen Directors are vacant
for months together as the Cabinet Committee / PMO has not cleared the files. If you do an
analysis of the present and past Directors on the Boards of Public Sector Banks, you can easily
find people who have no expertise on Banking sitting as Directors due to their political
affiliations.
Why should the Secretary, Department of Financial Services be in the Board of a Public Sector
Bank when he or she does not have time to attend the full Board and the Executive Committee
of the Central Board. Why should persons like Dr. Urjit Patel, Dy. Governor, RBI be in the
Board of a Public Sector Bank which is supposed to supervise, that too, when he was an
employee of a Consultancy Firm earlier which has become a major consultant to that Bank?
The RBI Governor in his speech spoke about Market linked pay structures that can help Banks
to attract best talent . Your editorial has interpreted that the centre should delink the pay scales
of top level executives of State owned banks from Govt scales. You have also compared the
pay scales of PSB Chiefs with that of Private Sector Banks like ICICI, Kotak Mahindra and Axis
Bank. The Governors speech talks about salaries to attract the best talents. Best talents are
1

needed not only at the top but also at the entry level. Today a Probationary Officer in a Public
Sector Bank draws less than his counterpart in the Govt and the Private Sector. So to attract
talent and to ensure integrity the pay scales have to be attractive at all levels. In case of the
Chief Executives of Public Sector Banks and the Private Sector Banks, one should not see only
the salary. After all, the Governor of Reserve Bank of India himself has given up a lucrative
assignment abroad not for money but for the country. There are many Professors in IIMs and
IITs in India who have given up financially lucrative assignments for the same reason i.e. to
serve for the country. Let us also not forget that the higher compensation in the Private Sector
has not led to higher efficiency.
Your suggestion to dilute the Govt share holding below 51% is dangerous. The RBI Governor
himself has stated that the Banks should revalue their assets which are huge. For example,
Main Branch of State Bank of India Chennai is valued at Re.1. SBI Officers Federation and All
India Bank Officers Confederation have been suggesting this revaluation of assets for long. We
do not feel that we have to follow BASEL III norms when developed nations do not even follow
BASEL II. Moreover Public Sector Banks have a sovereign guarantee of the Government which
the people trust. Diluting the shareholding to less than 51% will lead to the Private Sector
Corporates taking control of the Banks from which they have availed huge credit. For example
the total loan outstanding of the Reliance Group as on March 2015 is Rs.150,681 crores. Let us
not forget that between 1947 and 1969 in our country 559 Private Sector Banks failed and
people lost 80 to 90% of the deposits. After 1969, 23 Private Sector Banks have been merged
with Public Sector Banks because of their inefficiency and mismanagement. Privatisation of
Public Sector Banks will lead to a disaster.
The State Bank of India is already well controlled and RBI and SEBI look at their functioning
very closely. I wonder why you want SBI Act to be repealed. To hand over SBI to Ambanis or
Adanis ?
For the bad loan problem Government alone is responsible. Look at the NPA in infrastructure
lending by Public Sector Banks as the Govt itself killed the development banks which were
created for this purpose. Look at the history of ICICI, HDFC, IDBI and UTI. Look at the history
of the credit guarantee corporations promoted by the Govt. Who Killed Them? Will the
Government implement the recommendations of the Parliament Committee which has
recommended Publications of names of top 30 defaulters of each Bank which the Associations
have been demanding for years. Will the Govt bring in legislations to take over assets of the 30
big Corporates whose NPA outstanding amounts to almost 50% of the total NPA? Will the
Government bring legislations to take actions against wilful defaulters like Vijay Mallaya?
The proposed constitution of the Banks Board Bureau itself is flawed. Newspapers have
reported that besides RBI Governor there will be 3 Officials from the Finance Ministry, 2 from
the Banking Sector and one with international exposure. Do you think that Finance Ministry
officials will not follow the dictates of their political bosses? The aim is only to bring in people
from Private Sector as Chief Executives of Banks / Directors who will be called Professionals
but will have their vested interest to safe guard the Private sector at the cost of the common
man and the country.
If the ambitious Startup Mission, Make in India, Digital India and Swatch Bharat have to succeed
we need the Public Sector and finance from the Public Sector Banks. So it is imperative to
support the Public Sector and save the country.
Public Sector Banks are not created for making profit alone. Good governance and reforms do
not mean Privatisation. What we need is good salary at the entry level itself to attract the best
talents, correct direction from the policy makers and nil political interference.

(D. THOMAS FRANCO RAJENDRA DEV)

PRESIDENT, ALL INDIA STATE BANK OFFICERS FEDERATION
SR. VICE PRESIDENT, ALL INDIA BANK OFFICERS CONFEDERATION
PS: I could not paste it in your website as this is a large letter. I request you to kindly publish it
as an article for debate. We are ready for debate.