Banking unions and the Indian Banking Association (IBA) signed a bipartisan pay agreement on Wednesday, giving bank employees a 15 percent raise and increasing the payroll by 7,900 crore rupees per year.
Of this, 3,385 million rupees are for unofficial; the rest for officers. The salary agreement is for the period between November 2017 and October 2022.
Bank employees can expect to receive their arrears before Diwali, but no official communication has yet been issued.
“All the increases accumulated during this period will be announced as of November 11,” says a statement issued by the union of leaders.
A statement issued by the IBA states that in order to instill a sense of competence “and reward performance, the concept of performance-related pay has been introduced for the first time.”
The salary negotiation covered 29 banks (12 public sector banks, 10 private banks and seven foreign banks) and 500,000 employees in the banking sector. A joint statement from the four unions representing workers said for the first time that there will be a uniform basic subsidy, labor cost subsidy, house rental subsidy (HRA), special subsidy and transportation subsidy. The HRA rate will be 10.5 percent of salary nationwide.
The employees mainly demanded three things: salaries on par with the central pay commission, a five-day work week and update of the family pension.
The first two have not been achieved, but the IBA has agreed to recommend the family pension plan to the government. Now it is the government who will decide whether this facility should be extended to bank employees.
However, Finance Minister (FM) Nirmala Sitharaman told the IBA annual general meeting on Tuesday that retired bank employees should be treated in the same way as the defense sector.
Therefore, some improvement in government pension schemes can be expected, although pensions for retired employees improved under the current wage pact. “Non-financial issues such as the five-day week, the pension update following the recent announcement made by the FM for seniors, network holidays, D&A regulations and the introduction of the Northeast allowance for all the officers were discussed, “said the union leaders’ statement.
Level 5 officers will get a staggered increase starting in November of this year. The periodicity of said stepped increase will be two years, while for retired employees, the notional periodicity will be every two years from November 2017.
For the first time, there will be a uniform wage structure across the country for the category of workers, rather than separate state slabs that currently lead to “one nation, one wage.”
The monthly per capita duty of bank employees will be higher than all previous settlements.
“It is hoped that performance-related pay will motivate employees and lead to higher productivity,” said Secretary General of the Bank Employees Association of India, CH Venkatachalam.
The salary review will take effect retrospectively from November 2017 to October 2022 and will cover state-owned banks, old-generation private banks such as the Federal Bank and Dhanlaxmi Bank, and some foreign banks.
In addition to introducing a performance-linked pay for PSBs that depends on their operating profit, in the range of 5 to 15 days of additional income, changes have been made to the conditions of service of workers and officials.
Starting with the 2020 calendar, employees will be entitled to the five-day privileged leave “at the time of any party chosen by the employee”, in addition to being able to do so at the time of retirement.
The notice period to enjoy privileged leave has been reduced to 10 days, from 15. Employees will be able to enjoy medical / sick leave to care for the health of their children and may combine their maternity leave with other leaves. Maternity leave in the case of legal adoption of a child has been increased from six to nine months.
Most banks have been accounting for an increase in the wage bill, in the range of 12-14 percent, and have made adequate provisions on their balance sheets since November 2017, so the bipartisan agreement does not immediately affect finances. from lenders.
More importantly, the basic salary will not be increased by more than 2.5 percent (approximately Rs 1,155 million). Most pension and retirement costs are tied to basic salary.
“The family pension limit of Rs 9,000 per month has been removed. It will be paid at a flat rate of 30 percent. The banks’ finances will not be affected, as they have already taken into account the increase in the wage bill over the years. Liability for future costs will remain limited as there will only be a 2.5 percent discharge on the basic payment component, which was 2 percent during the last settlement, ”said IBA CEO Sunil Mehta .
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