Wage row: Bank unions seek govt intervention, set May 12 deadline

Bank unions have sought the finance ministry’s intervention and set May 12 as the deadline to respond to their suggestions on wages and employee welfare after they rejected the Indian Banks’ Association’s (IBA’s) proposal for a 2 per cent wage hike.

The 11th bipartite agreement on wage revision could mean a big expenditure for banks, which are struggling with high non-performing assets (NPAs).

The 2 per cent wage hike will cost banks approximately Rs 5 billion, while the proposal given by the unions will cost them around Rs 120 billion, according to D T Franco, general secretary, All India Bank Officers’ Confederation. 

In the last wage revision in 2012, bank employees got a 15 per cent wage hike, which roughly cost banks about Rs 83 billion, according to Franco.

C H Venkatachalam, general secretary, All India Bank Employees Association (AIBEA), said: “For the last four to five years, banks have been earning an operating profit, but net profit is wiped out because of bad loans. Hence, we rejected the 2 per cent wage hike offer by the IBA. We have now given the finance ministry our charter of demands.”

	2013-14	2014-15	2015-16	2016-17
Gross operating profit	1,277	1,378	1,363	1,590
Provision for bad loans	906	1,009	1,540	1,704
Net profit/loss after provision, including bad loans	371	375	180 (loss)	114 (loss)

The United Forum of Bank Union, the umbrella body of all bank unions, in its proposal for banks, has asked for parity in the pay of bank employees with that of central government employees. 

Further, in its charter of demands, it has asked for a five-day working week and more facilities for women employees. 

While at the end of the month, unions have proposed a two-day strike, they are also planning an indefinite strike if the government goes ahead with a 2 per cent wage hike as proposed by the IBA. 

“While we were expecting a reasonable offer from the IBA to make a basis for further negotiations, to our surprise and utter disappointment, the IBA made an offer of a 2 per cent hike in the Wage Bill as on March 31, 2017. You are aware that in the last settlement from 2012 to 2017, it was agreed at a 15 per cent hike in wage bill. Since then the banks’ business has grown, the workload on employees and officers has increased beyond tolerable limits, and hence, it was expected that the wage revision will be better than the last time,” said the AIBEA in a memo. 

According to the AIBEA, in 2016-17, while the gross operating profit of banks was about Rs 1,590 billion, the provision for NPAs was around Rs 1,703 billion.

“Net profits are getting reduced only due to huge provisions for bad loans and not due to any reasons attributable to the employees and officers of the banks,” according to the AIBEA.