SBI–Is it that pension demand may affect profits?

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.

45 Comments (+add yours?)

  1. rajkumarnegi
    Apr 17, 2013 @ 01:33:31

    Sir, now we can imagine the reason for shifting the supreme court case to Delhi high court. Govt just want to delay the court case The arrears you have projected can be paid from the interest of the pension fund deposits.The way our pensioners Sr advocate was missing and some other Sr advocate was present at the time of transferring the case to Delhi high court.It is a matter of concern and,It appears that some thing behind the table has happened.The Chairman of State Bank Of India has given how much amount to Mr Malaya for Kingfisher Air Lines which has gone in N.P.A. and nobody /no govt is asking any question from him and now The bank has no funds to give the just demand of proper pension .to their pensioners.It is a matter of shame for the institution,if they think so..I may say frankly that the public will not come and join the bank if after serving more than thirty/ years ,the employees are not paid full pension. The bank will also loose the creditability in the market

    Raj Kumar Negi

    Reply

  2. KESHAV RAI SAINI
    Apr 17, 2013 @ 06:03:40

    AS PER THYE AUDITED BALANCE SHEET OF SBI EMPLOYEES’ PENSION FUND AS ON 31-03-2012 THE BALANCE OF SBI PENSION FUND AMOUNTED TO RS 27024.66CRORES .THE INCOME RECEIVED DURING APRIL 2011 TO MARCH 2012 AMOUNTED TO RS 1880.79 CRORES AS PER AUDITED REPORT 2011-2012 OF THE STATE BANK OF INDIA,THE SBI PENSION FUND INVESTED AS UNDER-CENTRAL GOVT SECURITIES=30.34%STATE GOVT SECURITIES=22.63% CORPORATE BONDS=36.06% &OTERS =19.97% TOTAL=100%. YOU CAN PERUSAL THE BALANCE SHEET OF SBI FOR THE LAST 10 YEARS AND WILL OBSERVED THAT INCOME IS MORE THAN PENSION PAID DURING THE YEAR SO MUCH SO AT PRESENT BALANCE IN PENSION FUND IS RS35000 CRORES & AND SBI CAN SOLVE ALL THE PENSION ISSUES BUT GOVT IS AGAINST ANY INCREASE OF PENSION TO SBI STAFF. K.R SAINI

    Reply

  3. TN Ramachandran Nair, Retired AGM (SBI), Nellayi, Thrissur, Kerala
    Apr 17, 2013 @ 09:57:21

    This is nothing but a hide and seek game by the Government and the Management. The likely financial burden is utter nonsense and the attitude only shows how indifferent are both the govt. and management to the legitimate demand of a section of SBI pensioners.

    Reply

  4. avi2012
    Apr 17, 2013 @ 10:03:26

    Useful information

    Reply

  5. mysonnetsdeeper
    Apr 17, 2013 @ 10:30:04

    Pran, the great villain role player deserves it most, Sir.

    Reply

  6. KESHAV RAI SAINI
    Apr 17, 2013 @ 13:20:27

    DEAR SHRI NEELKANTH JI,AS PER BALANCE SHEET OF SBI &ITS PENSION FUND –FIANCIAL YEAR 2010-2011 PAGE 183-184PENSION FUND BALANCE RS 16800.10 CRORES,2011-2012 PAGE 182-183,RS27205.57 CRORES/IGIVE THIS FIGURE FOR STUDY OF OUR PENSION FUND FOR DETAIL YOU CAN REFER TO BALANCE SHEETS OF SPECIFIC PAGES & YOU WILL FIND THAT SUFFICIENT PENSION FUND IS AVAILABLE TO SOLVE THE ALL PENSION ISSUES OF ALL THE RETIREES OF SBI. K.R SAINI

    Reply

  7. veepee45
    Apr 17, 2013 @ 13:22:02

    Sir,there can be no 2nd thought as you have expressed in your post that “this an absurd proposition on the face of the fact.”

    Reply

  8. bndubey
    Apr 17, 2013 @ 14:29:28

    Sir The management of SBI should advise to government of India to close all the social welfare schemes and stop road construction and establishment of hospitals as all these huge expenses lead government in loss. The top management of the bank should shun all the benefits they are enjoying and they should also donate their funds to the bank as it will increase the profit of the bank. What a nonsense stand sir? It is beyond the limit of shamelessness. The older generation who toiled hard to make State Bank- a premier bank in real sense are being sidelined by those who are most benefited. Of course we have to wait for court verdict.

    Reply

  9. antony rudolf
    Apr 18, 2013 @ 04:07:56

    As per the IBI and SBI pension fund rules bank has to set aside sufficent funds before declaring any profit.These aversions are idiotic.

    Reply

  10. shyammohanmisra
    Apr 18, 2013 @ 08:01:04

    Very useful.

    Reply

  11. A.V.MURALI
    Apr 18, 2013 @ 15:58:45

    It is shameful that SBI should stoop so low in taking care of its senior ex employees who toiled to make SBI the great institution it is.

    Reply

  12. A.V.MURALI
    Apr 18, 2013 @ 16:17:33

    You have demolished the plea of paucity of funds by providing clinching figures. The Govt is bent on denying its senior citizens their rightfull dues.God save the powers that be.

    Reply

  13. Balakrishnan Iyer
    Jul 30, 2013 @ 07:00:51

    The Manmohan SinghGovernment with Chindambaram Finance Minister are responsible for the bad economic policies the Criminal Community like Filmstars,
    Cricketers, Politicians are the people who earn Sacks of Money but honest hardworking have to face retrengement , VRS, Downsizing they will have no facaevalue the SBI Management is largely responsible by not peroviding Wages and Increments in time also troubling honest and efficient officers during there tenure, Now all the parliamentarians are in deep routed corruption to fight elections where and why they will thnik of the olds state bank Pensioners or there needs.

    Reply

    • neelkanth
      Jul 30, 2013 @ 07:36:47

      Very well said. The feed back so provided by you is certainly of much interest to the SBI retiree pensioners in particular and the other readers in general. My sincere thanks for the comment.

      Reply

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