IBA, Bank Unions Agree To 15% Hike In Wage Bill
The move’s expected to benefit 8.5 lakh state-run bank employees.
The Indian Banks’ Association has agreed to a 15% hike in the wage bill for state-run banks—a move that’s expected to benefit nearly 8.5 lakh staffers.
Amid discussions during the 11th bipartite agreement with bank employee unions, the association agreed to make this hike effective from November 2017.
“The annual wage increase in salary and allowances is agreed at 15% of the wage bill as of March 31, 2017, which works out to be Rs 7,898 crore on pay slip components,” according to a memorandum of understanding between the Indian Banks’ Association and the United Forum of Bank Unions.
The 15% increase in wage bill is distributed among bank officers and workmen depending on their rank and profile. While individual employees may see their salaries go up by less than or more than 15%, as a whole, bank employees will see their wage component increase by 15%.
A bipartite agreement between employee unions and the IBA happens once every five years. The 11th such agreement has been under discussions since 2017.
The association has also agreed to introduce performance-linked incentives for state-run bank employees. The incentive is linked to the performance of the bank’s operating profit and will be given to employees in the form of additional salaried days.
If operating profit improves by 5-10%, employees will get basic salary and dearness allowance worth five days added to their regular annual pay. Incentives worth 10 and 15 days would be added to annual pay if the profit increases by 10-15% and over 15%, respectively. The incentives will be applicable from the ongoing financial year.
“We’re expecting this to enthuse our base of bank employees and it should encourage them to work harder,” said CH Venkatachalam, chairman of United Front of Bank Unions, an umbrella organisation comprising nine bank unions.
The association has also agreed to allow bank employees to encash up to five days of their paid leaves annually during a festival of their choice, starting this year. For employees aged above 55 years, this allowance will be up to seven paid leave days.
The association also agreed to increase banks’ contribution to the National Pension Scheme to 14% of pay and dearness allowance, from the current 10%, subject to government approval.