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Few years ago the Government rolled out handsome cash incentive scheme
(Statement of Intent) for CMDs and EDs commensurate with the performance of
the Banks. During November 2006 the Government considered social security
bonanza of reimbursement of full hospitalization expenses to whole time Directors
and their surviving eligible dependents for their entire life period. Close on the
heels of these incentives, on December 5, 2012 there appeared a news in all the
leading dailies that the Government is set to overhaul the process of appointing the
top management of two dozen public sector Banks and financial institutions,
including an increase in the retirement age to 64 years in a phased manner. It
further stated that the finance ministry has moved a proposal to the Appointments
Committee of Cabinet, suggesting that Banking being a specialized activity, it
needed Chairman and Executive Directors with at least a five-year term instead of
the average tenure of one-two years at present. In fact, it pointed out that in
technical departments, the retirement age was already increased to 64 years and
argued for a similar dispensation for Bank Chairman and Managing Directors, a
move which is being seen as a precursor to raise the superannuation age in
Government-owned Banks over the next few years.

The Reserve Bank yesterday fixed 70 years as the maximum age for a person to
hold office of MD & CEO and other Whole Time Director (WTD) in a private
bank as stipulated in the new Section 196(3)] Companies Act. , 2013 "It has been
decided that the upper age limit for Managing Director & Chief Executive Officers
(MD & CEO) and other Whole Time Directors (WTDs) of banks in the private
sector should be 70 years," the Reserve Bank of India (RBI) said in a notification.
Post the announcement, shares of HDFC Bank and IndusInd Bank recovered as the
retirement of HDFC Bank MD and IndusInd Bank MD in the offing in the next one
year. Media reports on 10 September 2014 state that Today, shares of HDFC
Bank ended at 865.60 rupees on the National StockExchange, up 0.1% from its
previous close, while those of IndusInd Bank ended2.1% higher at 633.65 rupees

While the bank employees welcome these favourable developments to the
custodians of the PSU and Private Sector banks, the unions in the Banking Industry
have been demanding increase in retirement age to all employees right from the
fifth Bipartite Settlement and are eagerly expecting similar stand of the
Government to increase their retirement age which is in tune with global trends.

. In support of the same we give below the following justifications.

A large number of people joined the Banking Sector in 1972-73 following
the Nationalisation of Banks. The next wave of recruitment came in 1980-
81, and then there was a lull in activity.

Due to a legacy of ban of recruitments for two decades, the public sector
Banks are witnessing unprecedented loss of skills and competencies in form
of massive retirement over the next few years.

Indias Public Sector Banks have employed some 700000 people, many of
whom are to retire in the next few years. The business has grown manifold
in the past decade, but employees strength has dwindled.

At the start of the last decade, at least 100,000 employees left the industry,
responding to the first ever golden handshake scheme in the sector. Since
then, there have not been too many recruitment drives. Banks have embraced
technology, but that has not been enough.

Thus Banks are going through an unusual manpower crunch. There are
reports of experts that in the next 10 years, they will have to hire around one
million people to keep their branches running and account for retirement and
natural attrition. Finding the right candidate for a leadership position will be
even tougher.

So many people leaving at the same time has prompted the Reserve Bank of
India to call the 10 years from 2010 to 2020 as the 'decade of retirement'.
This peculiar situation facing state owned Banks is as much an outcome of
the slowdown in recruitment in the 1990s due to lack of retirement planning.

A report by Boston Consulting Group endorsed the above fact that PSU
Banks will need to employ 9 to 11 lakh employees over the next five years,
The report, which includes a survey of about 14,000 customers, 50,000 Bank
employees and analysis of data obtained from about 35 Banks in the country,
said about half of the employment will be due to attrition.

Even The Khandelwal committee, which was set up to address the human
resource challenges of state-owned Banks, while acknowledging the
manpower shortage Banks are facing, said: "The leadership gaps in public
sector Banks are palpable. In the next five years, 80 per cent of general

managers, 65 per cent of deputy general managers, 58 per cent of assistant
general managers and 44 per cent of chief managers would be retiring.

Retirements in public sector Banks will continue to increase and peak by
2017. In total, 1.8 lakh employees will retire and will be replaced.
Depending upon the productivity growth, the industry will need 2.5 4.5
lakh additional people for growth in business.

Today Banking has become increasingly relationship driven in order to get
the best value out of the customers. Banks are also not certain whether the
prospective candidates are serious in pursuing Banking as a career. It is also
the fact that since the salary package is not attractive to attract new talents,
there is huge attrition rate of over 30% among the new recruits in all cadres
and Banks are unable to retain them with over 100,000 experienced
employees of PSBs retiring on superannuation in the next 5 years, Many
PSBs are also facing the problem of employee turnover and Public sector
Banks will edge out in competitive edge to give the best value out of the
customers if the management of the Banks are not quite alive to initiate
various measures to contain it.

A study states during the period 2004-2011, the number of branches of all
Nationalised Banks grew from 34,469 in 2003-04 to 45,850 in 2010-
2011. It registered an annual growth of 3.99 per cent, with an average
of 38, 387 br anches f unct i oni ng e ve r y year . The number of
empl oyees of al l Nationalised Banks decreased from 570951 in 2003-
2004 to 473041 in 2010-2011. It registered negative annual growth of -
1.59 percent, with an average of 477428 employees working every year.
But the deposits of all Nationalised Banks grew from 7, 94,427 crores in
2003-2004 to29, 46,636 crores in 2010-2011. It registered an annual
growth of 20.22 percent, with an average of 15, 94,500.25 crores deposits
every year. The advances of all Nationalised Banks grew from 412521
crores in 2003-2004 to 2154380 crores in 2010-2011. It registered an
annual growth of 25.89 per cent, with an average of 1114018.63 crores
advances every year. The investments of all Nationalised Banks grew
from 378873 crores in 2003-04 to 877326 crores in 2010-2011. It
registered an annual growth of 12.20 per cent, with an average of
5,41,486.63 crores investments every year. The total business of all
Nationalised Banks grew from 12, 00,454 crores in 2003-04 to 51, 01,016
crores in 2010-2011. It registered an annual growth of 23.02 per cent, with
an average of 2745561.25 crores business every year. At a glance it is

evidenced that the growth rate of deposits, advances and total business
is more than the growth of branch expansion and employee recruitment.
It shows that the business performance of Nationalised Banks is improved
during the study period.

But the co-efficient of variation of branch expansion and employees
recruitments are relatively low. The group which has less co-efficient of
variation is said to be more stable. The co-efficient of variation of other
variables such as deposits, advances, investments and total business are
high. A high co-efficient of variation indicates less consistency or less

It is found that branch expansion, deposits, advances, investments and
business performance are positively correl at ed t o other
variables, whereas employee recrui t ment s negat i vel y
correlated to all other variables. It shows that even with a decline in
number of employees, the business performance of Nationalized Banks
is not affected. Public Sector Banks are required to perform all types of
non productive work such as payment of pension, old age pension,
MANREGA payment, teacher salary payment, tax collection, selling of
gold, mutual fund and insurance products and now Pradhan Mantri
Jan Dhan Yojana (PMJDY) etc which Private Sector Banks are not
doing. It is Public Sector Banks which have to shoulder the
responsibility of target for Financial Inclusion fixed by the Government.
Similarly Public Sector Banks have to lend for agriculture development,
distribute UGC and take part on all KVC projects recommended by
District Industry centers.

In other words it correlates to the additional work pressures and
responsibilities which, dedicated, hard working Bank employees are
shouldering and has reached a stage of break down if the vacancies
arising out of envisaged massive retirements in another 5 years stated
above are not addressed through visionary manpower planning, pragmatic
salary structures and service condition in the 10

While we have often heard of people leaving Banks to join finance, legal,
accounting firms, etc. seldom have we heard of people leaving these
professions to join Banks? This needs to change. The right people will come
only if they are paid competitive salaries.


In this context UNIONS pragmatic demand for 25 % increase in paylsip
components in wage load in the Charter of Demands submitted to IBA
assumes significance than ever before.

The Banking sector is expected to grow at approximately 20 per cent over
the next decade and will need major induction of talent, a significant part of
which is to replace vacancies arising due to retirements in Public Sector
Banks. At the current rate of attrition, the industry will need to employ over
four lakh more people. Employment can be announced through news papers
by IBPS but retaining them on account non attractive salary package, long
hours of work, no defined working hours, slow career progressions etc. the
gap between the actual need and attritions pointed above is going to be
tough task to be bridged.

As the economy grows at a steady rate of around 7-8%, incomes rise and
demographic dividends start accruing, the Banking industry is expected to
take a quantum leap forward. But this growth will need a large number of
people and considering that there are retirements in lakhs, a defining
moment is being presented before the Nationalized Banks to transform.

So in tune with this defining moment increasing retirement age is a
thoughtful move and is the only alternative which will result in better use
of retaining the knowledge and experience of the existing Bank employees
to sub serve targets and goals of the Banks to face a host of HR challenges,
effectively recovering the rising non performing assets (NPAs), right
manpower retaining, training, retaining existing talent, leadership
development, credit appraisals , recovery, risk management and augment
succession planning of fresh recruitments Planning, Acquiring the right
people, Retaining/ Developing the people, Managing people separation /

The Central Government has already increased the retirement age of
professors in all the Central Universities from 62 to 65 years, two years
back. It was not just a matter of filling the ranks of teachers, but imparting
quality teaching.

On August 18, 2012, The Prime Minister Dr.Manmohan Singh, speaking at
the 150th year celebrations of the Bombay High Court, said the Government
was in favour of raising the age of retirement of High Court judges.

Presently, Supreme Court judges retire at 65 and High Court judges at 62.
The Prime Minister was referring to the Constitution (114th Amendment)
Bill 2010 to raise the retirement age of only the High Court judges from 62
to 65, which was tabled in Parliament for the working of the superior
judiciary which require far-reaching changes and to secure the quality of
judges is tune with the global trends. In leading Supreme Courts abroad, the
retirement age is above 65. In the High Court of Australia (which is the apex
court there) it is 70, in the Supreme Court of Canada 75, in the Supreme
Court of Ireland 70, in the Supreme Court of Israel 70, in the Supreme Court
of New Zealand 68, in the Constitutional Court of South Africa 70 or after
12 years of service, and in the U.K. Supreme Court 75 and no retirements in
U S.

Describing shortage of doctors as a global problem, many States
Governments have tried to solve this by increasing the retirement age of

Whether it is true or not but it is believed that Railway gave its consensus to
raise the retirement age of its employees, as it is already re-engaging their
retired employee for daily remuneration after their retirement till the age of
62. It was followed from 1998 with the reference of Railway Board Letter
No.E(NG) II/97/RC-4/8 dated 03.02.98. In 2009 the rates of Daily
Allowances also revised for engagement of retired employees on daily
remuneration basis.

The National Democratic Alliance Government had raised the retirement age
from 58 to 60, in 1998, a move that benefited 90,000 Government servants
and 50,000 Defence personnel. At the time, the logic was: the retirement of
140,000 employees would have costed Rs.5200 crore whereas paying
salaries cost only Rs.1493 crore.

And there were many reports after introduction of sixth pay commission that
the Central Government is keen on extending the retirement age of civil
servants to 62, on fiscal grounds, to curb expenditure on pensions as had
happened when the retirement age was raised from 58 to 60 in 1998.

Over the last three years there were further reports in newspapers that the
Board for Reconstruction of Public Sector Enterprises (BRPSE) had

recommended to the department for increasing the retirement age of
employees of loss-making Central Public Sector Enterprises (CPSEs).

For one thing, life expectancy in India has gone up. According to UNICEF,
in 2007 it was 64 years, and this is a figure that the average Bank employee
would have pulled upwards. Thus, when a civil servant or Bank employee
retires at 60, she or he is still at their mental peak, and each acts as an
institutional storehouse of Government/Banks policy and programme
implementation. Retaining them for another two years would possibly enrich
functioning of the Government/ Government Banks.

The increase in retirement age and year it was introduced given in the
parentheses (brackets) for males in many countries are as under:

Albania (64.5) (2011), Armenia (63) (2011), Austria (65) (2011),
Azerbaijan (62.5) (2011), Belgium (65) (2009), Bosnia and Herzegovina
(65) (2011), Bulgaria (63) (2011), Croatia (65) (2011), Cyprus (65)
(2011), Czech Republic (62.5) (2012), Denmark (65-67) (2008), Estonia
(63) (2011), Finland (62-68) (2008), France (62) (2011), Georgia (65)
(2011), Germany(65) (2008), Greece (67) (2012), Hungary (62) (2011),
Iceland (67) (2007), Ireland (65-66) (2008), Israel (67) (2011), Italy (66)
(in the 2011-2013 budget), Kazakhstan (63) (2011), Kosovo (65) (2011),
Kyrgyzstan (63) (2011), Latvia (62) (2011), Liechtenstein (64) (2007),
Lithuania (62.5) (2011), Luxembourg (65) (2011), Macedonia (64)
(2011), Malta (61) (2008), Moldova (65) (2011), Montenegro (64) (2011) ,
Netherlands (65) (2011) , Norway (65) (2011) , Poland (65) (2011),
Portugal (65), Romania (63) (2008), Serbia (63) (2011), Singapore (62)
(2012), Slovakia (62) (2012), Slovenia (63) (2008), Spain (65) (2011),
Sweden (61-67) (2011), Switzerland (65) (2007), Tajikistan (63) (2011)
Turkmenistan (62) (2011) & United Kingdom (65) (2011).

The retirement age in the US is 65; in Japan it is 60 and the Government is
gradually raising it to 65 by 2013, but people anyway continue working till
65 on reduced wages. By 2011, Austrias retirement age will be 65. In
Denmark it will be 67 years by 2008. Hungary plans to make it 69 years by
2013. Israel is already raising it to 67 years for men. French Senate house
voted and passed the core article of the pension reform bill to prolong the
minimum retirement age to 62 on October 9, 2009. Retirement in Germany
may rise to age 69.All these countries and many others are increasing the
retirement age because of an increasingly alarming problem their ageing

populations. By 2020, a quarter of Japans population will be 65 and over.
Life expectancy in the US is about 77, and by 2050 is expected to go up to
83. Japans is already 82.4 years. Indeed, the life expectancy in some of the
advanced countries, according to 2009 OECD data, are: France 80.9 years,
Canada 80.4 years, Sweden 80.8 years, Italy 80.9 years and Spain 81.1

An UNDP report states in India in 2010, 5.3 percent was aged 65 or older.
This percentage is estimated to increase, and at an increasing rate. By 2025,
these numbers will be 7.7 percent in India and by 2035 they will be 10.2
percent and will be termed as country of good, grey haired people.

As India gets wealthier which it undoubtedly is our populations life
expectancy will similarly increase. Imagine a person retiring at 60, but living
till at least 80 (if not more), perhaps physically weakened as she or he passes
75, but still mentally at the top of his or her game. What do they do with
such a long retirement? And besides the fact that the increase in life
expectancy leaves retirees with too much time on their hands and their skills
unutilized, it also places a great burden on the working population, which
has to finance the social security and health benefits that the elderly need.

In the West it costs much more to maintain an elderly person than it does to
raise a child; and health care costs in the rich world are projected to be those
countries biggest finance headache (much more than the costs of the
stimulus to end the current economic crisis). Thus it is not surprising that
there are an increasing number of voices in the West and Japan who are
talking of increasing the retirement age to 75.

Increasing the retirement age will engage the older citizens, contribute to the
state exchequer in terms of taxes from older workers, and reduce the social
security burden on the young.

In a move that will benefit hundreds of bureaucrats across the country, even
the federal Government of Pakistan has announced a two-year increase in
the retirement age of all civil servants. The decision came into effect from 1,
November 2012. The change has been made through a presidential approval
by amending the Civil Services Act 1973, instead of the usual parliamentary


Finally Private sector Employees, Public Sector Employees, Government
Employees, Bureaucrats, Judges - all have a retirement age. Individuals
running their own businesses hand over the baton to the next generation at
some point of time. But what are our Parliamentarians doing? Once they
get elected to Parliament they find ways not to retire. A Times of India data
states The 1st LS had 112 MPs in the age group 25-40 and the 14th LS have
just 63 MPs in the same age group. On the other hand, the 1st LS had just
1MP in the age group 71-90 and the 14th LS have 38 MPs in the same age
group. Is this truly representative of the youth of India, given that half of
India was born after 1983? The above table is definitely not encouraging.
Interestingly, these are the same MPs who decide the retirement age of an
average Indian and a well qualified professional Indian heading a prestigious
Institute. Tony Blair was 43 when he became the Prime Minister of Britain,
Barack Obama is 47. But in India Sexagenarian is now touted as the young
face of his party. Even would be our 'young' leaders are old.

Taking into account that life expectancy in India has increased consistently over
the last decades. Keeping in view of the entire above aspects, our demand for
enhancement of retirement age is just and right. News papers are agog with reports
that the Centre has not really discarded the move to increase retirement age
altogether. But economically speaking, the Government with a large fiscal deficit,
could lessen the burden by raising the retirement age as it may save more money
by not paying the retirement benefits such as gratuity etc. for two years though the
Government's salary budget would immediately be inflated.

One hopes that the Government will soon enough have the political wind and will
to back our just demand of increase in retirement age as per global trends and
justifications cited above for it is an eminently sensible one.

Pending consideration of our demand for increase in retried age, the least the
Government could do to meet ends of justice is that the prime issue Updation of
Pension as being extended Government employees that are being seriously and
anxiously expected by the bank retirees is settled at the earliest .

I would like to appeal to my young colleagues. A bank man is not the inhuman
machine. While fighting our way in the world, we never compromised the honour
and dignity of Bankers life. It is our precious life blood. Pay, money, overtime and
all the much is not everything in life. Bank man can survive through any
eventuality only if he wears a Big Heart.


I am conscious he or she reaches 60 years they shall have no place in their own
bank. They are deemed to be retired. But there is no retirement age for a
doctor, a lawyer, a businessman, a politician, but for us retirement is
compulsory. Why? Is it because workers Rights of citizenship are transferred
automatically to their employers? This is a very big question for me. Our
competence is decided by age whereas others competence is decided on their
actual physical fitness.

After all sauce for the goose is sauce for the gander.

Retried Bank Unionist
Email: ambujchinu@gmail.com

P.S :
Points to ponder and act :
Article 41 of the Constitution provides that the State shall within the limits
of its economic capacity and development, make effective provision for
securing the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement, and in other cases of
undeserved want.( article 6 of the ICESCR) Article 38 states that the state
shall strive to promote the welfare of the people and article 43 states it shall
endeavor to secure a living wage and a decent standard of life to all

Having denied living wage to all us all through our service are not
entitled for updation pension after retirement ipsofcto at par with other
civil servants as per law ?

As per the constitution of India every citizen has right to work . No where
we find a term Senior Citizen . Does this mean that on reaching 60 year of
age an employee /worker from then onwards is a senior citizen and has no
right to work but to live on doles offered by the Government/ employers. .
In 1992, the U.N.General Assembly adopted the proclamation to observe the year
1999 as he International Year of the Older Persons.
(ii) The U.N.General Assembly has declared Ist October as the International Day
for the Elderly, later rechristened as the International Day of the Older Persons.
(iii) The U.N.General Assembly on December 16, 1991 adopted 18 principles

which are organized into 5 clusters, namely-independence, participation, care, self-
fulfillment, and dignity of the older persons.
These principles provide a broad framework for action on ageing. Some of the
Principles are as follows :
(i) Older Persons should have the opportunity to work and determine when to
leave the work force.
(ii) Older Persons should remain integrated in society and participate actively in
the formulation of policies which effect their well-being.
(iii) Older Persons should have access to health care to help them maintain the
optimum level of physical, mental and emotional well-being.
(iv) Older Persons should be able to pursue opportunities for the full
development of their potential and have access to educational, cultural, spiritual
and recreational resources of society.
(v) Older Persons should be able to live in dignity and security and should be
free from exploitation and mental and physical abuse.
If global standards which is the global buzzwords widely talked about today by all
successive Governments in power India ,e when will such sound the
proclamations the U.N.General Assembly s and for that matter the sacred
provisions of Indian constitution quoted supra will come to vogue in letter and
spirit in India especially when she is member of U.N and all resolutions and
proclamations are binding on it.