SBI stir ends as govt hikes pension cut-off

Posted: Monday, Apr 10, 2006 at 0002 hrs IST
Updated: Monday, Apr 10, 2006 at 0002 hrs IST

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New Delhi, April 9: The week-long strike called by over two lakh State Bank of India employees was finally called off late Sunday evening after finance minister P Chidambaram personally intervened in the negotiations between the bank management and the unions.

The government has finally agreed to hike the salary cut off point to Rs 21,040 for calculating the pension formula against the existing Rs 8,500, which is related to the pay scale of SBI employees fixed in 1992. The revised scale would be applicable to the existing pensioners as well.

Addressing mediapersons Sunday evening, Mr Chidambaram said the SBI employees would resume work on Monday. “Anyone receiving a salary of Rs 21,040 would receive 50% as pension while those receiving a higher level would get 40% as pension,” he said. The minimum pension would now be Rs 10,520 instead of Rs 4,250.

“I always thought it was irrelevant and had to be revised,” the minister said. Though there is no official figure on the additional annual outflow due to the pension hike, the unions estimated it to be around Rs 180 crore. At present it is about Rs 120 crore.

When asked if this would create an imbalance between the pension benefits offered by SBI and other nationalised banks, Mr Chidambaram said the latter had their own formula to determine retirement benefits. SBI employees enjoy three retirement benefits including pension, provident fund and gratuity, while employees of nationalised banks receive only two benefits. They can either opt for pension or provident fund.

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