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The Kerala High Court has ordered an interim stay on a circular issued by the Indian Banks’ Association (IBA) fixing pay for ex-servicemen employed by public sector banks.
It has issued notices in this regard to the Finance Secretary, Government of India, represented by the Assistant Solicitor-General of India; the IBA; Chairman and other officials of State Bank of India.
Discrimination allegedEx-servicemen employed by public sector banks have alleged discrimination at the hands of the IBA in the fixation of pay in accordance with a new circular.
They allege that the IBA had misinterpreted and violated not only established policies and existing guidelines in the matter but also instructions issued by the Finance Ministry.
The latter had presumed that components not mentioned in the definition of pre-retirement pay in the Ministry of Defence office memorandum (OM) of July 24, 2009, need not be protected. It had dealt with pay and allowances of retired armed forces officers on re-employment in the armed forces itself.
But pay fixation is a benefit extended only to ‘personnel below officer rank’ on re-employment in Group C and D posts in public sector undertakings. The IBA referred to inappropriate and insufficient data, and grossly misinterpreted as well as violated many existing Government policies and guidelines, the ex-servicemen alleged.
Clarification soughtThe Finance Secretary’s own letter dated December 30, 2013 clearly instructed IBA to clarify the date of implementation of these guidelines, and the mode of tackling effect of financial implications, which it did not adhere to.
Most PSU banks complete pay fixation of ex-servicemen re-employed after six months of joining. The pay is fixed at a stage just above the last drawn pay by them, which is the correct method to do. But the IBA has asked to review the pay fixation done so as per their new guidelines, which will result in removing the major part of the pay so fixed. The very purpose of re-fixation for protecting the last drawn pay by ex-servicemen will be defeated in this manner, the ex-servicemen allege.
Recovery of the pay already paid for the last three or four years from their salaries would also result in huge financial loss to individuals and imbalance their financial stability.
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