Sinha said he would instruct the Indian Banks Association (IBA) chairman, Paneer Selvam for entering into a settlement as soon as possible.

''The response of the finance minister was quite encouraging'', the joint secretary of the National Confederation of Bank Union (NCBU), V.K Gupta told PTI.

He said Sinha told the members of the United Forum of Bank Unions (UFBU) representing the nine bank unions that he would intervene in the talks with the IBA whenever required.

Gupta, however, said the bank unions would go ahead with their agitational programme till they receive an assurance from the IBA on an acceptable enhanced pay package.

''The Union representatives discussed amongst themselves and decided to continue the agitation'', he said.

''We must hear positively from the IBA chairman on the wage negotiation before reconsidering ourdecision on going on strike'', Gupta said.

While the bank unions are demanding a 20 per cent wage hike excluding retirement benefits, the IBA has agreed to provide only 8 per cent hike with prospective effect.

It may be recalled that at a recent meeting in Mumbai the UFBU had expressed its willingness to lower its demand for a 20 per cent wage hike if IBA substantially hiked its offer of an eight per cent hike including super-annuation benefits with prospective effect.

"IBA has remained firm on its offer though bank unions have scaled down their demand from the original 30 per cent, which is lower than the minimum hike granted by the fifth pay commission," Indian national bank officers confederation general secretary K K nair had said.

UFBU has called for a two-day strike from February 25 and an indefinite strike from March 17 to press for a ``reasonable'' wage rise with effect from November one, 1997. The agitational programme follows one-day nation-wide strike by over one million bank employees andofficers on January 12.

UFBU has disputed IBA's argument that of the expected Rs 3,000 crore net profit of banking sector, Rs 1,000 crore each would go for technology upgradation and provisioning towards non performing assets (NPA) and the balance, to meet the offered eight per cent hike.

General secretary of all India bank officers'confederation S R Sengupta said banks had NPAs aggregating Rs. 45,000 crore and most ofthe amount could be recovered by just an amendment to the relevant laws but, the government and bank management lacked the necessary initiative.

IBA office-bearers are very serious about introducing voluntary retirement schemes (VRS) in banks and any such move would be opposed by unions, he said.