Associates of the All-India Bank Employees Association (AIBEA) are all set to take legal recourse over a move that they term "discriminatory".

The earlier rule was that employees who opt for retirement before completing 20 years of service will not get pension or be eligible for the bank's equal contribution to the provident fund (PF). Quite a few staffers, therefore, opted for just PF benefits as they would have got it even if they left before completing 20 years of service.

As per the latest IBA circular, bank staffers who opted for pension and taking the VRS wil still be eligible for pension after completing just 15 years, though it will be on a pro-rata basis for the extra five years not put in.

This has irked some bank staffers. Their reasoning is very simple: they did not opt for pension because 20 years was a long period, and if you left before that period, you got no pension or the bank's contribution towards the PF. So they just opted for the PF for that was assured - 20 years or not. Said a bank employee, "I opted for PF in a choiceless situation. Even the uncertainty about completing 20 years is off now as the bank has come out with VRS. In effect, the bank is penalising me by now stating that I did not opt for the pension.'' A cross-section of bankers say that they will now have to rethink on whether to opt for the VRS or not.

There is another catch too: pension regulations came after tough negotiations between bank managements and unions in 1995. Union sources say that bank managements are depriving their employees of their rights by issuing the above mentioned IBA circular unilaterally. Senior bankers see the latest IBA circular as a ploy to incentivise employees to opt for VRS, and they refer to banking secretary Devi Dayal's recent statement that 25 per cent of staff strength is being sought to be reduced. Said a senior union leader, "AIBEA affiliates in various state-run banks are persuading employees who opted for VRS before the current circular came into effect to take the matter to court because the goverment is announcing the concession to pension optees unilaterally by issuing this notification".

Already many public sector banks like Bank of India, Punjab National Bank, Bank of Maharashtra, Union Bank of India, Canara Bank, Uco Bank, Syndicate Bank, Indian Bank have announced VRS. These banks have received enthusiastic response from their employees. The VRS of several banks is closing on December 31.

But this was before the current IBA amendment. What will be the situation after this amendment? Many other public sector banks like State Bank of India, Cental Bank of India, Dena Bank are alos lining up VRS. Will they succeed?