Banking services are likely to be affected to a large extent on October 27, as nearly 9 lakh employees of nationalised banks and some old private sector banks would strike work demanding pension benefits. | |
| The United Forum of Bank Unions (UFBU) has decided to go ahead with the one-day strike after managements of public sector banks (PSBs) reiterated their opposition to the demand for allowing employees another chance to opt for pension instead of the existing provident fund benefits. |
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| About 55 per cent of the employees of the PSBs, excluding State Bank of India (SBI), had opted for pension scheme in lieu of provident fund in the mid-1990s. Others preferred to stay with the contributory provident fund, considering the then prevailing high interest rate regime. |
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| "If the demand to provide a chance to switchover to the pension option is given now, the public sector banks will need to shell out an additional Rs 12,000-13,000 crore," said an official at the Indian Banks Association (IBA). |
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| "Under the new accounting standards (AS 15), banks will be required to provide for this amount in one go. This will put unbearable financial burden on the banks. Hence, this demand is not acceptable," the official said. |
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| IBA had represented the banks during a recent conciliatory meeting with the unions under the aegis of the central labour commissioner. |
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| "We are asking to give one more chance for bank employees to opt for pension in lieu of provident fund," said C H Venkatachalam, general secretary of All India Bank Employees Association (AIBEA). |
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| The funds that banks have to set aside for honouring existing pension commitment are growing every year owing to increase in life expectancy, revision in dearness allowance and promotions and consequent salary hikes. This itself is a stiff challenge for banks, the IBA official added. |
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| The unions would also be protesting against the government's plan to lift the 10 per cent voting rights cap in private sector banks and the decision of the Reserve Bank of India (RBI) to allow banks to outsource some of their tasks. |
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| The central labour commissioner has scheduled a meeting of the unions and IBA on October 26 in New Delhi to try and avert the strike. |
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| Earlier this year, SBI employees had gone on a strike and got the management to agree to remove the Rs 4,500 a month cap on pension. The retired SBI employees now get 40 to 50 per cent of the last salary drawn as pension. |
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| GETTING BELLIGERENT |
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| The bank unions decided to go on a one-day strike after their demand for allowing employees another chance to opt for pension instead of the existing provident fund benefits was rejected About half of the PSB employees, excluding those of SBI, had opted for provident fund in the mid-1990s, considering the then prevailing high interest rate regime The public sector banks would have to shell out an additional Rs 12,000-13,000 crore to meet the demand of the unions Earlier, SBI employees had gone on a strike and got the management to agree to remove the Rs 4,500 a month cap on pension |
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