IBA, bank unions agree on 15% wage hike1 min read . Updated: 22 Jul 2020, 11:28 PM IST
- Indian Banks’ Association (IBA) and bank unions on Wednesday agreed upon a 15% hike in existing wage bill
- The wage revision will be effective from 1 November, 2017
Indian Banks’ Association (IBA) and bank unions on Wednesday agreed upon a 15% hike in existing wage bill. The wage revision will be effective from 1 November, 2017.
“The annual wage increase in salary and allowances is agreed at 15% of the wage bill as on 31 March, 2017, which works out to ₹7,898 crore on payslip components," according to the minutes of the meeting between IBA, representing management of banks and United Forum of Bank Unions.
“The new pay scales will be constructed after merging dearness allowance corresponding to 6352 points (average index point as applicable for the quarter of June-July, August, 2016) and adding thereon a loading of 2.5% on basic pay plus dearness allowance as on March 31, 2017 amounting to around ₹1,155 crore," the minutes said.
In a first, an introduction of performance-linked incentive (PLI) for public sector bank employees has also been agreed upon. “In today’s banking scenario, there is stiff competition amongst different categories of banks that is public sector, private sector, foreign banks. In order to inculcate a sense of competition and also a reward of performance, the concepts of performance-linked pay is felt to be introduced," it said.
The PLI is payable to all employees annually over and above the normal salary payable and will be calculated on the basis of net profit of individual bank and is optional for private and foreign lenders.
Further, bank’s contribution to national pension scheme will also be increased. “It has been agreed to increase the banks’s contribution to the NPS (national pension scheme) fund to 14% ie 14% of pay and dearness allowance instead of present rate of 10% from the prospective date of signing the settlement subject to approval of the government," it said.
The wage settlement negotiations has been going on for over two years, with bank unions going on strikes putting forward their demand of wage revision. The last wage revision happened in 2012 and has been due since 2017. Bank unions have been saying that public sector bank employees’ basic pay is substantially lower than that of a central government employee.
The bipartite agreement will have to be finalized in the next 90 days.