The Indian Bank Association (IBA) and bank employee unions have reached an agreement on wage revision, as stated in a press release issued on Thursday evening. Under this memorandum of understanding, there will be a 17 percent increase in salary and allowances for a period of five years, starting from November 2022.
The statement also mentioned that the 17 percent increase is based on the annual pay slip expenses for the fiscal year 2021-22, which amounts to Rs. 12,449 crore for all public sector banks, including the State Bank of India (SBI). The IBA has already recommended to the government to designate all Saturdays as holidays for the banking industry under the Negotiable Instruments Act (NI Act), in line with previous negotiations with unions and associations. The organizations had requested for this implementation to be done prior to the final bipartite agreement.
Bankers in the public sector and old private sector banks have received positive news, as the Indian Banks’ Association and the unions have agreed on a 17 percent annual increase in salary and allowances. This increase exceeds the 15 percent agreed upon in the previous bipartite wage settlement.
The 12th bipartite wage hike settlement has been agreed upon by the Indian Bank Association (IBA) and bank employee unions. This settlement will be effective for the next five years, commencing on November 1, 2022. According to the memorandum of understanding (MOU), which has been reviewed by Moneycontrol, bank employees will receive a 17 percent salary increase.
The final agreement is expected to be signed within two months, although the cut-off period is 180 days, according to Rupam Roy, the General Secretary of All India Bank Officers’ Confederation (AIBOC), as reported by Moneycontrol.
The new pay scales will be formulated by merging the Dearness Allowance corresponding to 8088 points (average Index point applicable for the Quarter of July, August, and September 2021) with the basic pay as of October 31, 2022, and adding a 3 percent loading, totaling Rs. 1795 crore, according to the MOU.
Regarding the additional 3 percent loading after the merger of DA, Roy stated that it would lead to an improvement in pension for all retirees from 1986, including those covered under the proposed 12th bipartite settlement.
In addition to the unions’ demand for pension updates for all retirees, it has been agreed that as a one-time measure applicable for the current bipartite agreement, monthly ex-gratia amount will be considered along with pension by public sector banks (PSBs) for pensioners and family pensioners who were receiving pension as of October 31, 2022, as stated in the MOU.
Previously, in November 2020, the IBA and bank employee unions signed a bipartite settlement that included a 15 percent pay increase for bank employees. This increase covers a five-year period from November 2017 to October 2022.
According to the MOU between the IBA and bank unions/associations, the latter have requested that the implementation of these measures be done before the final bipartite agreement is signed. The MOU also states that the IBA has already recommended to the government that all Saturdays be declared as holidays for the banking industry under the Negotiable Instruments Act (NI Act), which aligns with previous negotiations with unions. The IBA will continue to pursue this recommendation.
On December 6, the Finance Ministry confirmed that they have received a proposal from India’s banks regarding five days of banking. Bhagwat Karad, MOS Finance, stated in a written reply to the parliament during the ongoing winter session that the IBA has submitted a proposal to designate all Saturdays as banking holidays.
The 17 percent increase has fallen below the expectations of bankers, according to Krishna Kumar, the general secretary of All India Punjab National Bank Officers Federation, as reported by Moneycontrol. He stated that the increase should have been at least 20 percent, considering the annual operating profit of approximately Rs. 2.40 lakh crore for public sector banks in FY 2022-23 and Rs. 2.10 lakh crore in 2021-22. Kumar further added that the loading in basic pay should have been around 8 percent, as a 3 percent increase in basic pay only results in a Rs. 1400 increase after five years, which is insignificant compared to the corporate sector. Additionally, he mentioned that the initial basic pay for scale one officers in public sector banks will be approximately Rs. 47,500, which is significantly lower compared to other government employees.