It is 12.25 percent vs 20 percent now. Bank employee trade unions will meet the top brass of Indian Banks Association (IBA) tomorrow in Mumbai for a final round of negotiations before they strike work nationwide for two-days beginning 31 January, demanding higher wages.
The IBA and trade unions negotiate wages for over 8 lakh bank employees in member banks once in every five years. The two are yet to reach a consensus on the revision that was originally due in November, 2017. In the 2012 round, IBA had awarded a 15 percent hike to employees. This time (2017-2022), unions want 20 percent while the IBA has so far offered 12.25 percent.
A rough calculation shows that at 12.25 percent, the additional burden on banking industry will be around Rs 6,400 crore. This will be close to Rs 10,500 crore if the IBA agrees to the unions’ demand of a 20 percent hike.
“Our demand is genuine,” said C H Venkatachalam, general secretary of All India bank employees association. “If one adjusts inflation and the work load on employees, the pay must be rewarding,” Venkatachalam said. An IBA official said the issue will be discussed in tomorrow’s meeting.
Wage hike is only one of the demands pressed by the trade union. Bank employees are also pitching for a slew of other things including five-day work, rise in basic pay, scrapping of New Pension Scheme (NPS), updation of pension, improvement in family pension and equal wage for equal work for contract employees and business correspondents.
Pay disparity
The clash between trade unions and bank managements/ government on the wage issue is not new. For years, unions have been complaining that wages for PSU bankers are far below government servants, forget the private sector counterparts. “While government employees benefited from the liberal pay commission revisions, bank employees are left out. The reason often cited for low pay is high non performing assets in public sector banks. But for this scenario should change, we need to prevent the loss of talent to private sector,” said Naresh Malohtra, and ex-SBI executive who spent around 30 years in the bank.
Wage disparity between the public and private sector bank employees has been a longstanding problem, often triggering debates even among top central bankers. But, the government has not acted to reform the pay structure so far except for minor tweaks. In August 2016, former RBI governor, Raghuram Rajan kicked off a debate on the subject when he said salaries of top level employees of PSBs, including the RBI, are way short of global standards. "One of the problems, of course, is that public sectors overpay at the bottom but underpay at the top. I also feel underpaid," Rajan had said.
Compared to PSB employees, salary levels of private and foreign bank employees at mid-senior levels are high. Trade unions have argued that this anomaly has been impacting the morale of the PSB staff when it comes to operating in a tough operating environment.
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