Centre unwilling to offer wage hike to bank employees

Centre unwilling to offer wage hike to bank employees
Comment E-mail Print Share
First Published: Tue, Jul 14 2009. 10 46 PM IST
Updated: Tue, Jul 14 2009. 10 46 PM IST
Mumbai: The wage negotiation for close to nine million employees of public sector banks is unlikely to end soon with the government reneging on an earlier promise on a 17.5% wage hike.
A finance ministry official, who does not want to be identified, said the government is instead offering a 13% rise. Bank employees had received a 13.5% wage hike in the last wage pact that expired on 31 October 2007. The Indian Banks’ Association, or IBA, a national bankers’ lobby, brokers the five-year wage deal with trade unions.
According to the ministry official, the government is also not willing to compromise on other issues such as a second pension option or extending the date for implementing the revised pension scheme for new employees.
The talks are not progressing, said a senior IBA official and C.H. Venkatachalam, convener of the United Forum of Bank Unions (UFBU), an umbrella organization of nine bank unions.
A UFBU delegation led by Venkatachalam on Tuesday met IBA chairman M.V. Nair, also the chairman and managing director of Union Bank of India, for resuming talks.
Nair did not commit to anything, said Venkatachalam.
“This is something unprecedented. We are going on strike on 6 and 7 August to demand resumption of talks and to expedite the process,” he said.
The finance ministry had earlier agreed to a 17.5% hike for bank employees. IBA, in June, offered a 17% hike to UFBU but the officers’ organizations declined the offer.
IBA and the unions had also agreed to share the burden of a second option on pension to those employees who had not opted for it earlier.
As per an independent actuary calculation, the additional burden from revisiting the pension scheme would have been about Rs6,000 crore. The bank unions and IBA, on behalf of banks, had agreed to share this between themselves.
As per the agreement, 70% of the additional burden would have been shared by banks and 30% by the employees. However, no deal was signed.
The finance ministry official said the government does not want to offer the second pension option now due to ambiguity on the quantum of the additional burden on banks.
The unions also want all new employees joining banks till March 2012 to be covered by the existing pension scheme, while the government wants all employees joining after 31 March 2010 to be covered by the new scheme. Managed by professional fund managers, the pension under the new scheme will depend on the performance of the pension fund.
Comment E-mail Print Share
First Published: Tue, Jul 14 2009. 10 46 PM IST