PSBs to meet finmin on wage hike

Written by Arun S | New Delhi | Updated: Mar 4 2014, 05:45am hrs
The management of public sector banks (PSBs) has decided to take up with the finance ministry on March 5 the demands of employees for a wage hike and other related issues, including providing them accommodation facilities and reimbursing their entire medical expenses.

This was decided after a meeting between the United Forum of Bank Unions (UFBU), representing around nine lakh employees, and Indian Banks Association (IBA), the countrys apex bank management panel in Mumbai on Monday.

They (IBA) have assured us that they will discuss these issues with the government this Wednesday. The next UFBU-IBA meeting is likely to be held by mid-March, CH Venkatachalam, general secretary, All India Bank Employees Association (AIBEA), told FE. AIBEA is the countrys oldest and largest bank union with around 5 lakh employees as its members.

During the meeting, UFBU an umbrella body comprising members of nine bank unions also demanded five-day week, regulated working hours, improvements in pension-related issues including allowing the new employees (those who joined on or after April 1, 2010) to switch over from the National Pension System (which is a defined contributory retirement benefit scheme) to the old defined benefit pension scheme with a guarantee of a minimum pension.

The employee union pitched for a five-day week instead of the present five-and-a-half day week, saying the RBI, government, LIC, stock exchanges and money markets all have a five-day week. They said customers can use facilities like ATMs, mobile apps and on-line banking during the weekend.

In the last round of talks, the employees cited high inflation and pay disparity with private sector banks while rejecting the managements offer of a 10% hike in the cash component of the pay package (including basic pay, dearness allowance, house rent allowance, routine medical expenses and a special allowance, but excluding superannuation benefits, travel allowance and hospitalisation reimbursement).

Bank management contends that even a 10% hike in the cash component would have set banks back by R3,150 crore annually, a huge sum considering mounting bad loans and the economic slowdown, which is delaying recovery. The failure of the last round of talks had led to a nation-wide strike on February 10.

The employees said they may agree to a reasonable settlement of around 15% hike in the cash component if the management agrees to take care of their other demands including expenses for their housing and medical expenses, sources indicate.

In the last round of wage revision settlement signed in 2010 for 2007-12, the management had agreed to a 17.5% increase in the total salary. This time, the employees are asking for an increase in the cash component of their salary.

Finance minister P Chidambaram had asked PSBs to ensure that a significant portion of their retained earnings is ploughed back as capital to further their business.