There have been several flimsy grounds offered by the management of State Bank of India to the courts and other agencies that if demand for an increased pension is acceded to by them, it is bound to result into dwindling of profits for the Bank. This is an absurd proposition on the face of the fact that the funds accumulated on pension itself are more than enough to meet the demand and it may not be necessary for the Bank to further channelize extra funds. Profit wise, the Bank has all along been in a comfortable position growing richer by leaps and bounds. Quoted below is the text from editorial of ‘SBI Elders Voice’ adequately clarifying the fund position in regard to Pension duly explaining the Bank’s profit position:
- “The obvious reason for the Supreme Court to divert our Writ Petition to Delhi High Court is the adamant stand of the Central Government. The Government is reported to have taken a stand that any further increase in pension payment would have an impact on the profitability of SBI. This stand does not have any credence or justification. The net profits declared by the SBI have grown substantially over the years with substantial increase in the Dividends declared from 40% in 1997 to 350% in 2012. As per the audited financial statements of SBI Pension Fund and IBI Pension Fund as on 31.3.2012, the SBI Pension Fund had a corpus of Rs.27,024.65 crores and IBI Pension Fund had a corpus of Rs.182.27 crores. The income earned on these funds is Rs.1,303.00 crores, and Rs.15.67 crores respectively. The total pension payment for 2011-2012 from these funds is Rs.1,149.59 crores. The income that can be earned on the corpus even at 8% p.a*. would be about Rs.2,162.00 crores p.a. For the payment of pension at 50% of pay to all eligible pensioners, the additional amount involved would be less than Rs.200 crores per year, which can very well be taken care of by the income earned on the corpus. The payment of arrears to all the eligible pensioners with effect from 01.11.1987 would not exceed about Rs. 1600 crores as per a rough estimate made”.
* This could be only a conservative assessment as the interest rate on bigger amounts is supposed to be much higher.