The decision on increase in wages and pensions in public sector banks is more than a year away, but the Reserve Bank of India ( RBI) has already asked banks to start making adequate provisioning. That’s because banks will have to pay arrears from November 2012, even though the Indian Banks Associationhas informed banks that an agreement with unions on wage revision will be reached by March 2014.
The banking regulator told bankers at the post-monetary policy meeting that it would take a “very serious view” if banks are found making lower provisioning during the annual financial inspection report. RBI’s next round of annual inspection report will start from April 2013, in which the wage and pension provision figures will be examined.
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