PSBs' wage negotiations stuck over IBA's performance-linked pay proposal

The eleventh bipartite agreement for wage revision of about 800,000 public sector bank (PSB) employees is stuck over a proposal by the Indian Banks’ Association (IBA) to link salaries of senior executives with performances of banks.

This is for the first time that the IBA has proposed a performance-linked pay for banks. While the officers’ union had been opposing the move, now the workman unions have decided to go ahead with talks. 

The IBA had proposed that remuneration of grade six and seven be linked to the return on assets and operating profit of banks. For other grades — from one to five — the wage revision is proposed on the basis of the negotiations, the IBA said. The employees in grades six and seven include GMs and DGMs, about 2,500 in total. 

“While the officers’ union has opposed the move to have different structures of wage revision for different grades, workers’ bodies have agreed to go ahead with wage negotiations till grade five,” said Rajen Nagar, president of All India Bank Employees’ Association (AIBEA).

However, the officers’ union has been abstaining from talks. “There cannot be two sets of rules of employees under same service conditions,” said Soumya Datta, general secretary, All India Bank Officers’ Confederation (AIBOC).  The banks which are yet to approve wage settlement from grade one to seven under the bipartite agreement include State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank and Indian Bank. 

Notably, so far the IBA has agreed for 10 per cent increase in wages, which bank unions have rejected. This 10 per cent increase would accrue an additional burden of Rs 5,200 crore for banks, apart for arrears, due since 2017. In the last wage revision in 2012, bank employees got a 15 per cent wage hike, which roughly cost banks about Rs 83 billion. Earlier, the IBA had proposed wage negotiations only till scale III. Subsequently, the AIBOC had decided to excuse themselves from the proceedings of the negotiating committee meetings thereafter. Following this, the IBA had agreed to extend the bipartite wage negotiation mandate up to scale five.