IBA, bank employees signs wage hike, pension benefits agreement

After much deliberation, the Indian Banks Association (IBA) has settled on a 17.5% salary hike for roughly 700,000 bank employees. IBA signed an agreement with the United Forum of Bank Unions (UFBU), an employee union comprising 9 union at the industry level and covering officers and clerical staff.

The salary hike which becomes effective from November 2007 for a period of five years, would entail additional outgo of Rs4,816 crore annually. This ninth bipartite wage negotiation settlement covers 27 public sector banks, almost all private banks and some foreign banks including Citibank, Standard Chartered Bank, HSBC and ABN Amro.
 
Besides, the agreement has also provided for pension benefits for around 332,000 serving and retired employees. The pension scheme would involve an additional outgo of nearly Rs6,100 crore from the banks. This is the second pension option for public sector banks, covering 272,000 serving employees and 60,000 retired employees who did not opt for the scheme in 1993.
 
Vishwas Utagi, secretary of the All India Bank Employees Association (AIBEA) confirmed, “This settlement would require an additional corpus of Rs6,100 crore to cover 272,000 present employees and around 40,000 retired employees. In that, employees have agreed to contribute Rs1,800 crore, which forms 30% of the corpus while the bankers would contribute the remaining balance of Rs4,200 crore.”
 
However, SBI unions refused to ink the pact stating that there interests were not being served. SBI union representatives of National Confederation on Bank Employees (NCBE) and All India State Bank of India Officers Association (AISBIOA) refused to sign the minutes of the meeting.
 
Mr Utagi added, “The SBI leadership walked away saying that this will not be applicable to them, but then the fact remains that their own organisation presidents have signed the pact. So, even though the general secretaries of these two unions did not sign, their respective presidents have ratified. Although SBI unions were negotiating along with the rest on the wages front, they had a different stand with regard to the pension scheme. SBI has a different pension settlement since the beginning, separate from the pension scheme covering other banks. They were arguing to introduce a separate clause in the settlement to enable them to improve pension system within the bank. However, both IBA and the government refused and directed them to hold talks with their management.”
 
Those employees joining public sector banks from April 2010 would be covered by the New Pension Scheme (NPS) with 10% of their basic salary and dearness allowance deducted as their contribution. Banks in turn would pitch in with the same amount.
Sanket Dhanorkar [email protected]
  • Like this story? Get our top stories by email.

    User 

    We are listening!

    Solve the equation and enter in the Captcha field.
      Loading...
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email
    Close

    To continue


    Please
    Sign Up or Sign In
    with

    Email

    BUY NOW

    online financial advisory
    Pathbreakers
    Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
    online financia advisory
    The Scam
    28 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
    Moneylife Online Magazine
    Fiercely independent and pro-consumer information on personal finance
    financial magazines online
    Stockletters in 4 Flavours
    Outstanding research that beats mutual funds year after year
    financial magazines in india
    MAS: Complete Online Financial Advisory
    (Includes Moneylife Online Magazine)