Demand for 17.5% hike likely to delay bank wage talks

A move that would further delay the settlement of the ongoing wage negotiation, the United Forum of Bank Unions (UFBU) has demanded the restoration of 17.5% increase in the wage of bank employees.

Also, it has asked the Indian Banks? Association (IBA) to expedite the resumption of ongoing ninth bipartite talk on wage revision and another option of pension for remaining bank employees. The ninth bipartite wage negotiation between IBA and unions had began since November, 2007.

The two parties had mutually agreed on 17.5% hike initially. The 17.5% increase in wage of bank employees would have burdened the state-owned banks by Rs 4,800 crore every year. However, the IBA later communicated to the UFBU that on government?s instructions it had decided to cap the hike to 15% only.

Meanwhile another segment of unions- All India Bank Officers? Confederation (AIBOC), which is part of UFBU had demanded a hike of 30% in wages.

Talking to FE, IBA chairman MV Nair, who is also the chairman and managing director of Union Bank of India, said that the IBA had not changed its stand from 15% hike. The UFBU leaders are likely to meet Nair tomorrow.

In general council meeting of All India Bank Employees? Association (AIBEA) in Mumbai on Friday, AIBEA general secretary and convener of United Forum of Bank Union (UFBU), CH Venkatachalam said, ?All kind of loans under priority sector lending are being given by the state-owned banks only and not the private sector banks. The government?s pressure on state-owned banks to lower the lending rates would thus hit the banks? profitability over a period of time. If the governmental pressure continues than ninth bipartite talk is not possible, he.

He said that if the state-owned banks reduce their savings deposit interest rates, common people would stop banking with these banks.

Write-offs, provisions and concessions have resulted in NPAs worth Rs 45,000 crore in the Indian banking sector. “Hence we want the recovery of NPAs. We are also opposing the proposed amendment in the Banking Regulation Act by the central government. We have decided to launch a nation-wide campaign against the proposed amendment in November 2009 during the winter session of Parliament,?? said Venkatachalam.

Also, the bank employee union leaders are opposing the IBA?s move to put new pension scheme for fresh employees of the bank as a pre-condition for implementation of another option of pension. Meanwhile, S Nagarajan, deputy general secretary of All India Bank Officers Association (AIBOA), said “We reiterate our minimum demand of 20% plus. Also, we are not part of 30% hike as demanded by AIBOC, ??he said.