Public sector banks will have to shell out nearly Rs 12,500 crore more a year as part of the new wage settlement agreed between the managements of state-owned banks and their employee unions. Nearly 7.56 lakh public sector banks, including State Bank of India, will now get 17 per cent annual increase in salary and allowances for the next five years.

The agreement was finalised after discussions were held between the Indian Banks' Association (IBA) representing managements of banks and the authorised representatives of workmen unions and officers' associations on wage revision for officers and workmen in banks, a joint memorandum signed by IBA and unions said. The total wage bill of SBI alone for FY23 was pegged at Rs 57,292 crore.

IBA has already recommended to the government for declaration of all Saturdays as holidays under the Negotiable Instruments (NI) Act for the banking industry in line with earlier negotiations with unions, according to the memorandum. If the government agrees to this proposal, banks will work only from Monday to Friday every week.

Many countries, including the US, follow the Monday-Friday working days for banks. Currently, bank branches in India are closed on second and fourth Saturdays every month.

Bank unions are also pushing for declaration of all Saturdays as holidays. “The unions/ associations urged for implementation of the same before signing of the final bipartite agreement/ joint note,” the memorandum signed by the IBA and unions said.

Bank employees got a wage hike of 15 per cent involving an outgo of Rs 7,900 crore for the banks for the 2017-2022 period. Both the sides agreed to implement the concept of Performance Linked Incentive scheme for the first time from the FY2020 fiscal. PSU banks reported a 57 per cent rise in net profit to Rs one lakh crore in FY2023.

According to the agreement, the new pay scales will be constructed after merging Dearness Allowance corresponding to 8088 points (average Index point as applicable for the quarter of July, August and September 2021) to the basic pay as on October 31, 2022, and adding thereon a loading of 3 per cent amounting to Rs 1795 crore. “The annual increase in salary and allowances is agreed at 17 per cent, of the annual pay slip expenses for FY 2021-22, which works out to Rs 12,449 crore for all public sector banks including SBI,” IBA said.

The memorandum says distribution of annual wage increase between workmen and officers will be worked out separately and proportionately based on breakup of establishment expenses for FY 2021-22. “Without prejudice to the demand of unions/ associations for updation of pension for all retirees, it is also agreed that as a one-time measure applicable for the current bipartite / joint note period, monthly ex-gratia amount will be considered along with pension by PSBs to pensioners and family pensioners, who were drawing pension as on October 31, 2022,” it said

The applicability of the ex-gratia for the retirees of the current settlement period will be discussed further. The ex-gratia amount will not attract any other allowance including dearness allowance, it said.

The memorandum said the parties will meet on mutually convenient dates to draw out a detailed bipartite settlement/ joint note on the various issues on which consensus positions are reached. The parties will endeavour to finalize the settlement within a period of 180 days.

Earlier, some banks even contemplated moving away from Indian Banks Association-led wage settlement to retain talent under its own remuneration package. However, this plan was dropped later.

2023-12-09T07:00:33Z dg43tfdfdgfd