The 15% increase in salaries agreed to on Monday between the bank unions and the Indian Banks\u2019 Association (IBA) amounts to an annual increase of R4,725 crore primarily for public sector banks. Several banks \u2014 among them Central Bank of India, Andhra Bank, Indian Bank, United Bank, Dena Bank and Punjab and Sind Bank\u2014 have provided for increases of close to 12.5% and were understandably against the hike. State Bank of India (SBI) and its associates have been providing for increases of 15%, Union Bank at 14% and Bank of India at 15% every quarter since Q3FY13. The hike will be effective from November 1, 2012, when the last five-year bi-partite agreement expired and will benefit eight lakh employees. The increase will be calculated on the total payslip component that includes basic pay, dearness allowance, house rent allowance and other benefits. The final agreement is expected to be drafted in three months. Following the agreement, the unions, who were demanding an increase of 19.5%, called off their planned four-day strike which was to start from February 25. The IBA has also partially agreed to the unions\u2019 demand for a five-day week. It has also decided to give employees a day off on every second and fourth Saturday of the month.\u00a0 Present at the meeting on Monday were heads of various banks banks which included Arundhati Bhattacharya (SBI), Rajeev Rishi (Central Bank of India), Arun Tiwari (Union Bank) and T M Bhasin (Indian Bank). \u201cIBA has also agreed to separately work out the cost of medical expenses, family insurance, provident fund, gratuity and pension,\u201d said S Nagarajan, general secretary, All India Bank Officers\u2019 Association (AIBOA). Late last week union leaders and bankers met in the presence of chief labour commisioner P P Mitra but were unable to resolve the issue. Earlier this month, the wage negotiations had fallen through after the IBA raised it final offer to 13% and asked the unions to lower their demand from 19.5%. The deadlock had prompted the unions to go on the four-day strike. Representatives of All India Bank Employees\u2019 Association (AIBEA) and the All India Bank Officers Association (AIBOA) had met Finance Minister Arun Jaitley last week seeking his intervention into the issue. This round of wage negotiations that began in November 2012, have seen employees participate in several strikes. While the IBA started negotiating for an increase of 5%, the unions were initially asking for 25%. In the next few rounds, the IBA gradually increased it to 12%\u00a0 while the unions came down to 23%.\u00a0 On Monday, the IBA proposed 15% which the unions readity accepted. The last wage hike settlement took place in 2010, when salaries were hiked by 17.5%. Wages in the banking sector are governed by industry-level bipartite settlements signed between the IBA and unions.