Pension bill of PSBs may be an impediment for sale

Pension bill of PSBs may be an impediment for sale
© Provided by The Times of India

Mumbai: Pension liabilities of public sector banks (PSBs) would impede prospective buyers should current provisioning norms continue. If a private promoter takes over a PSB, it would have to provide hundreds of crores for all future pension liabilities in addition to making an upfront provision.

Some private banks have suggested that the government should allow pension payments to be made out of current expenditure to retired employees. This would enable the privatised banks to meet obligations towards retired employees without taking a big hit on their profit & loss account.

Unlike the government, where employees joining after 2004 shifted to a defined contribution scheme, banks moved to the new scheme only after 2010. This means that the bulk of PSB employees are eligible for an indexed-linked pension after retirement. The fact that the pension is indexed to inflation results in pension rising every time there is an increase in dearness allowance for bank employees.

“The scheme was devised at a time when life expectancy was in the 60s and interest rates were around 14%. Life expectancy for this segment is expected to be above 80 years,” said a senior banker. He added that the bank would have to make provisions every time there is an increase in inflation (dearness allowance) or if there is a drop in interest rates as life insurers hike the cost of annuities when interest rates fall. There would also be periodic provisions to be made to reflect the gradual increase in life expectancy.

The finance minister had assured bank employees that none of them would be affected by the sale of the PSBs. However, employee associations have been holding protests over fears that the government may extend its sale plans to other PSBs as well. While public sector senior management get low salaries compared to their peers in the private sector, probationary officers receive a much better package when compared to entry-level executives in large private banks. As a result, the wage-to-income ratio of most private banks is lower than that of PSBs.

News Related

OTHER NEWS

Volkswagen releases more ID Buzz photos ahead of March debut

We’re inching closer to the March 9 reveal of the Volkswagen ID Buzz, which means it’s time for more teaser images. VW released a handful of new photos of the ... Read more »

Dustin Pedroia has revealing take on Manny Ramirez, players who take PEDs

© Provided by Fansided Boston Red Sox legend Dustin Pedroia had a surprising take on Manny Ramirez and players who take performance-enhancing drugs. Give Pedroia credit for not judging a ... Read more »

CFB Analyst Names 7 Teams With “Most To Prove” In 2022

© Provided by The Spun Clemson and North Carolina lined up against each other. Just as there is every season, this coming year’s college football landscape features several teams with ... Read more »

Highly-sought 4-star 2022 RB on two-day visit to Gainesville

© Provided by Gators Wire Florida football has been hot on the market for running backs in the current recruiting cycle, which comes as no surprise as new head coach ... Read more »

Les Miles told Ja'Marr Chase he couldn't play WR

© Provided by Bengals Wire Cincinnati Bengals wide receiver Ja’Marr Chase…as a cornerback? A guy by the name of Les Miles thought that was a viable course of action for ... Read more »

Eleazar wants more livelihood opportunities for solo parents

© The STAR / Michael Varcas, file Eleazar wants more livelihood opportunities for solo parents MANILA, Philippines — Senatorial candidate and retired Philippine National Police chief Guillermo Eleazar yesterday vowed ... Read more »

EU announces new rules for corona certificates

On February 1, the EU will change its rules for valid corona certificates. Here are the most important changes: * Has it been more than 270 days (approximately nine months) ... Read more »

Kemba Walker's starting Knicks role is a Derrick Rose stopgap

MIAMI – When the formal part of the Knicks’ morning shootaround ended at FTX Arena Tuesday, Tom Thibodeau huddled on the sidelines with rehabbing Derrick Rose for a 10-minute conversation. ... Read more »

Big Ten Is Reportedly Considering A Major Schedule Change

© Provided by The Spun The Big Ten Logo on the field for the Ohio State-Maryland game. The Big Ten is considering some major scheduling alterations for football, according to ... Read more »

Raiders interview process to fill GM role in full swing

© Stephen R. Sylvanie-USA TODAY Sports Las Vegas Raiders owner Mark Davis The Las Vegas Raiders are wasting no time finding their next general manager, conducting a series of interviews ... Read more »

Former Patriots Executive Has Telling Admission On Tom Brady

© Provided by The Spun Tampa Bay Buccaneers quarterback Tom Brady. We don’t know if Tom Brady‘s last game happened in Sunday’s divisional round loss to the Rams. But former ... Read more »

College Football World Reacts To Big Ten Schedule News

© Provided by The Spun Ohio State football players carrying Big Ten football signs. The Big Ten Conference is reportedly mulling significant changes to their football schedule over the next ... Read more »

NFL World Reacts To Wednesday's Jim Caldwell News

© Provided by The Spun Detroit Lions coach Jim Caldwell with his team. For the past few weeks, former head coach Jim Caldwell has been linked to the Chicago Bears‘ ... Read more »

Joe Burrow called his own plays vs. Titans when headset went out

© Albert Cesare / The Enquirer / USA TODAY NETWORK A week removed from overperforming in a playoff win, the entire offensive line managed to underperform. The interior was totally ... Read more »

Pro Football Writers Announce Their 2021 NFL MVP

© Provided by The Spun Aaron Rodgers walks off the field on Saturday night. The Professional Football Writers of America have announced their MVP for the 2021 NFL season. For ... Read more »

Eagles DT Javon Hargrave named to 2022 NFL Pro Bowl as injury replacement

© Provided by Eagles Wire Kicking in the door to Vegas!@Jay_MostWanted has been named to his first Pro Bowl after replacing Kenny Clark, who is unable to participate due to ... Read more »

Chiefs Fans Getting Praised For Incredible Postgame Act

© Provided by The Spun Kansas City Chiefs fans celebrate the team’s Super Bowl win. The Kansas City Chiefs and the Buffalo Bills played an instant classic this past weekend ... Read more »

College Football World Reacts To The Les Miles News

© Provided by The Spun Les Miles coaching LSU. Earlier Wednesday afternoon, Cincinnati Bengals wide receiver Ja’Marr Chase met with the media before the AFC title game against the Kansas ... Read more »

Chiefs' fans donate more than $178K to Buffalo Children's Hospital

© Provided by Touchdown Wire The Kansas City Chiefs’ fandom has stepped up in a huge way for an opponent. Days after the AFC West champs outlasted the Buffalo Bills ... Read more »

New report finds 1 in 8 congressional staffers are not making a DC living wage

One in eight congressional staffers in Washington, DC, are not paid a living wage, a new report from a nonprofit found. © Sarah Silbiger/Getty Images The dome of the US ... Read more »

New Giants GM Joe Schoen committed to QB Daniel Jones?

© Danielle Parhizkaran/NorthJersey.com / USA TODAY NETWORK New York Giants quarterback Daniel Jones The New York Giants recently hired ex-Buffalo Bills assistant general manager Joe Schoen to be their new ... Read more »

Blinken announces US has delivered written responses to Russia over Ukraine crisis

The United States has given Moscow its written response aimed at deterring a Russian invasion of Ukraine, Secretary of State Antony Blinken announced Wednesday. © CNN The response was delivered ... Read more »

Wisconsin offers a three-star ILB in the 2023 class

© Provided by Badgers Wire There are few programs that have hit the recruiting trail harder in recent weeks than the Wisconsin Badgers. Today, Paul Chryst extended a scholarship offer ... Read more »

UBS kauft in USA Online-Vermögensverwalter für 1,4 Milliarden

© KEYSTONE/DPA/SEBASTIAN GOLLNOW Die UBS kauft in Amerika zu: Die Grossbank übernimmt den digitalen Vermögensverwalter Wealthfront für eine Barzahlung von 1,4 Milliarden Dollar. Mit dieser Akquisition wolle die UBS ihre ... Read more »

Chiefs HC Andy Reid provides injury updates after Wednesday practice

© Provided by Chiefs Wire Kansas City Chiefs HC Andy Reid provided his typical post-practice injury update to start the practice week. The only player to sit out of practice ... Read more »

Joe Burrow Reveals His Expectation For Arrowhead Stadium

© Provided by The Spun Cincinnati Bengals quarterback Joe Burrow The Cincinnati Bengals will be stepping into a harsh environment on Sunday, but quarterback Joe Burrow seems unfazed. Arrowhead Stadium ... Read more »

NFL World Reacts To Awesome Chiefs Fan News

© Provided by The Spun Chris Jones celebrates with Chiefs fans in the stands. Although a rivalry is brewing between the Bills and Chiefs on the football field, it’s evident ... Read more »

Nicht-EU-Bürger sollen weniger Sozialhilfe erhalten

Der Bundesrat will mit finanziellem Druck die Arbeitsintegration von Drittstaaten-Angehörigen erhöhen. Die Sozialhilfe befürchtet, dass noch mehr Bedürftige in prekäre Verhältnisse geraten. © Foto: Salvatore Di Nolfi (Keystone) Während des ... Read more »

Erhöhung erst im März?: US-Notenbank signalisiert baldige Erhöhung des Leitzinses

Die US-Notenbank Federal Reserve (Fed) belässt den Leitzins vorerst weiter bei 0,0 bis 0,25 Prozent. Das entschied der Zentralbankrat am Mittwoch. Doch damit dürfte es bald ein Ende haben. © ... Read more »

Walmart-backed firm buys two companies in effort to build personal finance app

Walmart-backed fintech firm Hazel will purchase Even, a financial benefits platform, and ONE Finance Corp., which will be combined into a single company under One’s name. Getty Images The financial ... Read more »

Fashion Nova fined $4.2 million for suppressing negative customer reviews

Fashion Nova is accused of using a third-party review management app that blocked customer reviews below four stars. fashionnova.com Online retailer Fashion Nova will pay a $4.2 million fine to ... Read more »

Prince Harry under fire again after refusing to terminate £18million Spotify contract over Joe Rogan's vaccine lies

PRINCE Harry is under pressure to end his £18million Spotify deal after the streaming giant was accused of promoting anti-vaxxer content. Harry, 37, is set to release podcasts on the ... Read more »

Emmerdale drops Aaron Dingle return bombshell as Liv finally lands court hearing

Emmerdale dropped an Aaron Dingle bombshell on Wednesday evening as his younger sister Liv Flaherty finally had a glimmer of hope. Liv is currently behind bars on suspicion of murdering ... Read more »

Miami Heat vs. New York Knicks NBA betting odds, lines, trends

The Miami Heat (30-17) host the New York Knicks (23-25) after winning three home games in a row. The Heat are favored by 6.5 points in the matchup, which tips ... Read more »

The Bay's Marsha Thomason shares exciting update on season four - exclusive

Chatting to HELLO! from her home in Los Angeles, Marsha Thomason is worlds away from her role as the new family liaison officer, DS Jenn Townsend, on The Bay, but ... Read more »

Mom blasts suspect Anna Bella Dukes in son's Snapchat hostage death

A heartbroken New Mexico mom on Wednesday blasted the teen girl arrested in her son’s Snapchat-fueled hostage scheme murder for taking “everything away from us.” Anna Bella Dukes, 18, was ... Read more »

West Indies vs England 2022, 3rd T20I Live Updates From Barbados

© Provided by News18 West Indies vs England 2022, 3rd T20I Live Updates From Barbados West Indies vs England, 3rd T20I Live Cricket Score: Hello and welcome to our live ... Read more »

Living with Covid: The pandemic has changed and so must South Africa's approach to it

Vaccination helps to train the immune system on how to combat the virus. © Copyright (c) Daily Maverick , All Rights Reserved Covid has changed. The virus is now much ... Read more »

How ‘living snow fences' help make roads safer for drivers during winter

I couldn’t see the end of the hood of the Jeep that I was driving through the snowsquall, so I kept the speed down to around 30 km/h. The wind ... Read more »

US-Notenbank signalisiert baldige Erhöhung des Leitzinses

© KEYSTONE/AP/RICHARD DREW Die US-Notenbank Federal Reserve (Fed) hat eine baldige Erhöhung des Leitzinses signalisiert. Angesichts der hohen Inflationsrate und der guten Lage am Arbeitsmarkt werde es “bald angemessen sein”, ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic