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Chances of An Honourable Settlement Are Becoming Dimmer and Dimmer As Time Is Passing
by
Rajesh Goyal
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The last talks on 10th BPS were held almost over a month back i.e. middle of August, 2013, wherein only limited progress took place i.e. merger of DA. This too fell short of the expectation of bankers. The date for next talks is yet to be announced. In between, lot of water has flowed through Ganges, and country saw many upheavals - some of which are very relevant for an honourable settlement. During this period, there was crisis in INR trading as INR tumbled against USD so much so that there was all round gloom and stock markets crashed. INR has recovered a bit but not due to internal factors, but owing to external factors which are beyond the control of Indian Government. (This is topic for Banking Tutor - which I will talk separately in a different article), Narender Modi has been named as Prime Ministrial candidate by BJP. There have been communal clashes in UP which have weakened the Central Government as well as SP Government in UP , etc etc. When I wrote last article on wage revision, there were better chances for an honourable settlement. Now, things are looking more gloomy. Let me explain why I feel so. Certainly number of union leaders will not agree with me at thing moment, but they will give similar reasons for their failure to snatch an honourable settlement.
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The slide in INR vs USD has adversely impacted our economy, more so for banks. We saw huge downward trend in bank shares on stock market at the Rupee crisis. Although, stock market is not the true parameter to judge the health of an industry, yet it is considered as a good indicator to view the perception of the investors. Thus, banking industry will be passing through a bigger crisis soon and their bottom lines will be under greater stress owing to huge NPAs and thinning margins. This situation will be used an alibi to suppress the demands of bankers for an honourable settlement.
The declaration of Narender Modi as Prime Ministerial candidate by BJP has shrunk the changes of Congress to coming to power. In such a situation, a blame game will start wherein for all the ills of the banking industry, scapegoat will be previous governments. With poor performance of banking sector, new government will be least willing to budge to give higher wages to bankers. The talks are likely to be stretched and if early settlement does not happen, it may be deferred for much longer period than it was expected last year. IBA is playing its cards smartly and delaying the talks. Next round takes place after 2 months and that too without much progress. At this speed, it may take over two years for conclusion of the BPS. Mr Modi is likely to prove much tougher guy for such settlements as he will have to face crisis on several economic fronts. Thus, a new government will be less sympathetic to bankers.
Now I have come across MoF circular dated 18th September, 2013, the heading of which reads "Expenditure Management - Economy Measures and Rationalisation of Expenditure". I am sure, most our readers must have read the extracts of this circular in newspapers. I am giving below a link for the benefit of readers, so that they can read the full circular, if they are interested. Although, this circular is not directly applicable to banks, but past trends have shown that big Babus in MoF get great pleasure in extending such measures to Banks who are considered as the best whipping boys for such activities. It gives them a pleasure and earn lot of brownee points from Mnisters when they show how they have been able to save crores of rupees by squeezing the banks. I still remember of the time, when our former FM had asked banks to increase the dividend amount as GoI was hard pressed for funds. This or similar acts are likely to be repeated soon. If more dividend is demanded by GoI, then lesser amount will be left for wage hikes.
Click Here to View Full Circular of GoI on Economy Measures and Rationalization of Expenditure
Now, all our readers well understand, what happens during Economy Measures - No recruitment, no wage hikes, curtailing LTC etc etc. If MoF gives a slight hint, all CMDs will fall upon each other to show that they are the best slaves to do what their bosses want them to do. Union leaders will be happy as they will have an easy route to escape.
In these circumstances, the hope of honourable settlement are becoming dimmer and dimmer. I may look to be pessimistic, but this is reality. Therefore, there is a need for gearing up and ensure that union leaders do not buckle under pressure. Certainly our economy is facing crisis but it is more home made due to corruption and mismanagement. Bankers should not suffer for such mismanagement. Let us hope, union leaders will now realise the gravity of the situation and ensure that 10th BPS is concluded before the Lok Sabha elections are announced by Election Commission sometime in February 2014. Time is short, please hurry up if you wish to have a honourable and timely settlement.
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