RBI Letter Reg 2nd & 4th Holidays

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Gold coins will soon be available with buyback facility

NCDEX launches gold forward contract to cut imports

In a first, commodity exchange NCDEX plans to sell gold coins with a buyback facility, but only when the new forward contract ‘Gold Now’ launched on Thursday enters the second stage.

While various banks sell gold coins, so far no one is offering the buyback option, making things difficult for the consumer when he/she wants to sell. The new NCDEX arrangement gives consumers an exit route.

The ‘Gold Now' platform, an online market for buying and selling gold, will accept gold recycled in exchange-approved refineries. The idea is to reduce dependence on imports by complementing the recently announced Gold Monetisation Scheme (GMS).. With ‘Gold Now’, NCDEX hopes to bring out 2-5 per cent of the 25,000 tonnes of gold lying idle in homes and lockers.

“We intend to offer contracts in 5 gram, 10 gram and 50 grams coins in the next six months,” Samir Shah, Managing Director and Chief Executive Officer of NCDEX, said at a press conference here. At present, the spot trading contract is available in 100 gram and 1 kg bars.

Terming the new product a ‘new national market’ for gold, Shah said the exchange is creating an international standard ecosystem. Investors, too, will get a wider choice as they can either opt for a gold deposit scheme under the GMS, or go for the exchange-based contract.

“When you open a gold deposit account under the proposed GMS, you will get a fixed rate of 1 per cent. But on the exchange platform the returns will be market-driven. One may get 5-6 per cent returns,” he said, adding the new initiative will lead to ‘Make in India’ gold by linking up the gold recycling industry.

“We need to create an awareness in the market. Hopefully, if we get 5 per cent of an estimated 25,000 tonnes of idle gold, you can imagine the impact it will have in reducing imports,” he said. Gold demand in India, the world’s largest consumer, will not come down, but the supply side can be addressed by mobilising idle gold, he added.

Under ‘Gold Now’ contracts, one can trade in ‘imported gold’ accredited by the London Bullion Market Association as well as recycled ‘India gold’ from domestic refineries, he said. Under these contracts, gold will be compulsorily delivered to buyers from six centres — Delhi, Ahmedabad, Mumbai, Kochi, Hyderabad and Chennai.

To ensure quality of the recycled domestic gold, NCDEX has accredited four refineries — MMTC Pamp, Kundan, Shirpur Gold Refinery and Edelweiss Gold Refinery — as ‘Good Delivery’ gold refiners.

Postal department readying game plan to roll out payment banking service

The postal department is readying its game plan to roll out payment banking services — hoping to get a licence in a couple of months — and is closely looking at global models and preparing to hire top executives, people familiar with the matter said.

"Based on our discussions and interactions with the RBI ( Reserve Bank of India), we hope to get a nod by July," a senior official of the Ministry of Communications & Information Technology told ET. The central bank hopes to issue payment bank licences by the end of 2015, RBI Deputy Governor SS Mundra said recently.

The postal department expects to make the payment bank viable within three years of operations. Payment banks can accept deposits and can't offer credit. "Our calculations show that we will be able to generate profits of close to .`91 crore by the end of five years," the official said.

In February, Finance Minister Arun Jaitley had thrown his weight behind India Post's application, saying the government hoped to utilise its vast network of about 1.55 lakh points of presence across the country to help promote schemes such as the Pradhan Mantri Jan Dhan Yojana, aimed at promoting access to financial services.

India Post has studied models of various postal bank models of China, Japan, Vietnam and France to chart out its growth plan. "We have set a target of opening around 650 branches by the fifth year of operations. Additionally, we hope to have around 25,000 spokes and 1.3 lakh access points across India," the official said.

According to guidelines issued by the RBI in November, payment banks can accept demand deposits, subject to a cap of .`1 lakh per customer, and provide payment and remittance services through the Internet, branches, business correspondents and mobile banking.

Payment banks cannot offer credit facilities directly, although they can act as agents of commercial banks for credit and other services.

Pension fund and 2% load!

Let me explain about P.F. Fund and Pension Fund from my understanding.
P.F is deducted at the rate of 10% of Basic Pay from Employee.
An equal amount is contributed by bank to the P.F. account of employee 
These amounts are credited to the P.F. trust account of the individual banks.
Representatives of recognised unions will find place in the Board of trustees.
They have access to the Income/Expenditure account and balance sheet of the trust.
The amounts deposited in the account are invested in various financial instruments like 
Govt., Bond etc., Income generated will be utilized for giving interest to employees account.
At the time of retirement the amount (both employee contribution and Bank contribution) 
standing in the concerned employee will be given to the employee

This is the procedure of Contributory P.F. system.

In case of Pension Fund what is happening?
In 1995 Pension was introduced in Banking sector.
At that time, amount lying in P.F. trust (belonging to Pension opted employees) 
is transferred to Pension fund of the individual Banks.
Thereafter 10% contributions from employees were credited to P.F. Trust account.
10% Contribution by Bank was/ should be credited to Pension Fund.
The amount thus accrued in Pension Fund is invested and income generated also 
credited to Pension Fund .
Out of this fund only, Pension to all retired employees who opted for Pension scheme,
Commutation amount and family pension for the diseased employees, are disbursed every month .

Now my doubts are
1. Whether union representatives are members of any governing board of Pension Fund?

2. If not, Why? After all, the fund belongs to employees.
3. Whether Union people have access to read Income /Expenditure account and
    Balance Sheet of the fund?
4. Whether unions are aware of what is the income generated in this fund every year?
5. Whether Bank is contributing 10% of Basic Pay of all employees every month to Pension Fund?
   (or contribute some funds at their will and pleasure. )
    Whether Banks have contributed the 2/3 amount of additional cost, as accepted by in 9th B.P.S?
6. Whether UBFU is accepting the figures given by IBA , without any scrutiny.?
 Replies received under RTI act by some interested comrades, reveals that Pension Fund is not maintained as if it should be maintained.
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9th B.P.S. and Pension fund!

At the time of every B.P.S , IBA will tell that “pension fund is short of funds.
 To retain its viability some sacrifice from employee side is needed “ 
In 7th and 8th some % in increase in wage revision is sacrificed/compromised.

At the time of 9th B.P.S , employees under Contributory P.F. system also want to  join Pension scheme. 
Then IBA said Pension Fund can’t bear the additional cost due to joining of more employees to the scheme. Further it said that additional cost to be shared by Banks and employees. Unions accepted for this deal. Then what will the additional cost ? IBA gave a huge figure that is far away from actual expenditure. Then BEFI intervened and produced a document containing the actual projection of additional cost.  It is much much lesser amount than what is given by IBA. All the unions in UFBU and IBA 
accepted the document after verifying the correctness of the projections.
Then it was decided that 2/3 of additional cost will be borne by IBA and 1/3 will be borne by employees.
The amount so decided are recovered only from those employee who newly joining the Pension scheme. (Thanks to one leaf of two leaves union’s change of stand at the last minute)
Thus a section of employees paid penalty for joining Pension Scheme, even though this  section  of employees suffer from lesser wage revision for the sack of employees already in Pension Scheme.

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10th B.P.S. and Pension fund!

This time also IBA said that “since merger of D.A. with Basic Pay is much higher and consequent Pension disbursement will also be high. 
(Mere merging of D.A will not increase pension. Because D.A. is reduced correspondingly. Only loading in addition will make the difference.)
Pension Fund can’t bear the additional burden.
Hence restrict the loading to 2% instead of 15 % “.  Unions accepted the IBA’s argument and signed in the dotted line.
1. My question is, if any document containing the projection of additional cost due to merger of D.A to Basic Pay with 15% loading, is given to UFBU?
2. What is the additional cost mentioned by IBA?
3. Whether unions have analysed and come to a conclusion?
4. On what basis UBFU accepted the proposal of loading 2% only on Basic Pay?
  (which is not a practice in previous occasions)
Members have the right to know about this decision.
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What will happen in 11th B.P.S.?
IBA will again say Pension Fund can’t bear additional cost. Therefore Pension will not be paid 
at 50% of last drawn Basic Pay. 
Only 40% of last drawn Basic Pay will be paid as Pension hereafter,
UFBU will accept and sign.