Follow by Email

Monday, March 3, 2014

Bank staff eye 15 pct pay hike in meet with IBA

Bank staff eye 15 pct pay hike in meet with IBA

Nine unions, representing around 9 lakh public sector bank (PSB) employees under the umbrella of United Forum of Bank Unions (UFBU), are slated to meet Indian Banks’ Association (IBA) — the country’s apex bank management panel — on Monday to arrive at a wage revision settlement.

In the last round of talks that failed, leading to a nation-wide strike on February 10, the employees had cited high inflation while rejecting the management’s 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).

Top bank management sources said even a 10% hike in the cash component would have set banks back by Rs 3,150 crore, a huge sum considering mounting bad loans and the economic slowdown, which is delaying recovery. Though the employees have not demanded any specific hike, they may agree to a “reasonable settlement” of around 15% hike in the cash component if the management agrees to take care of the expenses for their housing and medical expenses, sources indicate.

“Our readiness to agree to a low hike in the cash component will depend on the management’s readiness to accept our demands of taking care of housing as well as medical expenses of the employees and their family including hospitalisation,” CH Venkatachalam, general secretary, All India Bank Employees' Association (AIBEA), told FE. AIBEA is the country’s oldest and largest bank union with around 5 lakh employees as its members.

On February 10, when bank employees started a two-day nation-wide strike demanding higher wages, 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. “It cannot be that all profits are used to declare dividend and to provide enhanced wages and allowances to bank employees. While claims of officers, staff and employees must be duly acknowledged, and a fair and just (wage) settlement is arrived at, there are other claimants (declaring dividend and using part of retained earnings as capital) to

Banks' profits. I will appeal to employees and officers of banks to recognise this,” the minister said.
Wages as a ratio of total bank expenses have come down from 17.5% in 2010-11 to 14% in 2011-12 and to 13% in 2012-13. Though the wage bill itself has gone up from Rs 54,964 crore in 2010-11 to Rs 56,000 crore in 2011-12 and to Rs 64,000 crore in 2012-13, employee unions said this was mainly due to recruitment of around 1 lakh employees and higher outgo of superannuation benefits as a large number of them had retired from service.

They pointed out that profits of banks rose from Rs 1 lakh crore in 2010-11 to Rs 1.16 lakh crore in 2011-12 and to Rs 1.22 lakh crore in 2012-13, while the provision for bad loans went up from Rs 29,830 crore to Rs 38,177 crore and to Rs 43, 102 crore during this period. The actual write-offs also went up from Rs 17,794 crore in 2010-11 to Rs 27,013 crore in 2012-13.

“We understand the ability to pay higher wages is limited due to bad loans, but then how could they afford to write off so much? The management must consider the wage hike as an investment in their employees. Otherwise, with more private banks to be set up after the new bank licences are rolled out, they would easily poach from PSBs with higher pay packages. This will result in PSBs losing out after having spent considerable time, energy and money in fresh recruitment and training,” Venkatachalam said.

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.

Read More Click Here: 

No comments:

Post a Comment