By CL Jose
It’s not an issue anymore, says bank CEO Rajendran
KOCHI/January 01-2022: The CSB Bank employees’ wage-revision conundrum is, at last, getting resolved?
The months-long standoff between the CSB Bank management and a section of the bank’s employees, who have been pushing for their long-due wage-revision, has started showing signs of thawing.
‘The unionised 1635’, as is referred to by a top management personnel, have succeeded in drumming up support in their effort from the employees fraternity across the industry.
Despite the passage of more than one year since the signing of the banking industry-level 11th Bipartite Settlement and 8th Joint Note on November 11, 2020, between Indian Banks’ Association (IBA) and the bank unions all over country, CSB management has been dragging its feet on the implementation.
The CSB Bank employees have staged a number of protest demonstrations during the past few months seeking the establishment of their ‘legitimate’ demands with regard to their rightful wages and service conditions.
Standoff thaws
However, in a positive turn of events, the MD & CEO of the bank, C VR Rajendran, indicated that the issues regarding the ‘settlement’ between the management and the employees was all set to be resolved amicably soon.
No issue anymore
“We are negotiating with the employees. Anyway, I am moving out of the bank….we may come to a settlement before I leave,” Rajendran said while responding to a specific query on the issue from analysts at a meeting a few days ago. Rajendran is set to take early retirement on March 31, 2022, according to an official release earlier.
The bank MD went on to explain that even if it’s not settled before he leaves the bank, the management has people, who can take care of the issue.
Without mincing words, the bank MD & CEO said, “It’s not an issue anymore.”
Genesis of disputes
Ever since FIH Mauritius nvestments Ltd (Fairfax) entered the capital-strapped centenarian bank in 2019 with an investment of Rs1208 crore to pick a majority stake, the legacy employees complain, they have been looked down upon by the ‘new management’.
The employees’ union leaders aver that the management had designed various ways to ease out not-so-wanted officers by reducing retirement age from 60 to 58 in the first phase, and thereafter requiring all officers above 50 to undergo a management review in order to avoid early (compulsory?) retirement.
There are many in the bank, who love to believe that the series of agitations launched by the employees may have forced the obdurate management to ‘rethink’ on its stand on the wage revision, and favourably consider the employees’ demands on wage and service conditions..
Responding to the new development in CSB Bank, T Narendran, State president of Bank Employees Federation of India (BEFI), said, “whatever happened has happened; frank discussions can very well resolve the issue in the bank.”
Narendran warned the management against the growth the bank has been achieving in ‘sheer numbers’ at the cost of its employees’ self-respect and job security.
Targets are persecutory
Leader of one of the four unions in CSB Bank told businessbenchmark.news that the management represented by the HR Department had earlier presented three targets to be achieved in order for the employees to qualify themselves for a 15 per cent salary hike originally envisaged by the bipartite agreement- 5 per cent against each target.
- Growth in gold loans by an additional Rs6000 crore; 2) bringing down the cost-to-income (C2I) ratio below 40 per cent and and 3) pruning the special mention account (SMA) by 50 per cent and recovery of retail NPA- barring gold loans and loan against property (LPA) – up to a value of Rs45 crore.
Talking to businessbenchmark.news, the former credit chief of a nationalised bank said, growing gold loan by additional Rs6000 crore in CSB amounts to more than doubling the current gold loan portfolio, which is less than Rs6000 crore as of end Q3
.“Achieving 100 per cent growth is obviously a herculean task for any bank within a specified time frame,” he said.
More daunting will be the challenge to achieve a cost to income (C2I) ratio below 40 per cent. Very rarely has any bank in India, let alone Kerala, achieved that target, and moreover, it’s more of a management play.
As of Q3, CSB’s cost to income ratio was 58.49 per cent and the bank used to enjoy a much better ratio a year ago at 48.47 per cent.
Let’s take a look at the other leading banks in Kerala. Federal Bank’s cost to income ratio has surged from 49.99 per cent a year ago to 58.49 per cent as of December end, 2021.
It will be worth looking at how the ratio moved for South Indian Bank in the past one year. C2I for SIB has inched up from 60.2 per cent as of Q3, FY21, to 64.8 per cent after a year, on December 31, 2021. In between, SIB’s cost to income ratio has shot up to a whopping 82.1 per cent for the quarter ending September 30, 2021.
