The indefinite strike at the State Bank of India has entered the third day but there is no sign of a rapprochement between the striking employees and the management. By taking over the SBI's cheque-clearing operations across the country, the Reserve Bank of India has been able to insulate the banking system against the impact of the strike, but millions of customers of the country's largest commercial bank, which roughly accounts for one-fourth of the banking system, have been inconvenienced. This is the fourth indefinite strike at the SBI. The three previous such strikes""observed in 1947, 1960, and 1969""lasted 47 days, 21 days and 17 days, respectively. As officers and employees of the bank are united, the latest strike may also continue for some more days, since the government seems unlikely to accept their demands. The main demand has been a revision in pension payment, which is based on a salary structure fixed in 1992. There are other demands too, like commutation on a par with the industry; index-linked dearness allowance (DA) on pension; and the upgrade of basic pension of all past retirees. At the rate of 50 per cent of basic pay and DA, State Bank employees earning up to Rs 8,500 a month can get a maximum pension of Rs 4,250. For those earning more than Rs 8,500, the ceiling is fixed at 40 per cent of their basic pay and DA or a minimum of Rs 4,250. Even though their salary structure was revised in 1997 and again in 2002, the pension ceiling has not been hiked. The SBI employees want pension on a par with other public sector banks, where the amount is fixed at 50 per cent of the average of the last 10 months' basic pay and DA. | |
| However, there is a significant difference between the emolument benefits enjoyed by the SBI employees and their counterparts in other public sector banks. Unlike the over 200,000 SBI employees, who get three retirement benefits in the form of provident fund (PF), gratuity and pension, employees of the nationalised banks get only two""PF and gratuity. They can opt for pension but in that case, the employer's contribution to the PF corpus is used to provide the third benefit. If the government accepts the SBI employees' demand, trade unions will lose no time in asking for pension as a third benefit for the entire industry. This will snowball into a major financial crisis for the industry as there already exists a gap of around Rs 20,000 crore between the actual pension outflow from the industry and the corpus created out of employer's contribution to the pension fund. So the government should not surrender to the demands of the SBI employees, who already enjoy additional increments outside the industry-wide wage agreement brokered by the Indian Banks' Association. The best way to resolve the issue will be to raise the pension ceiling by factoring in the rise in inflation rates and not by raising the pensions to the level of other public sector banks. At the same time, the SBI management must put in place a sound incentive scheme to reward the performers. The government has allowed banks to spend up to 1 per cent of their profit after tax in offering incentives to performers. The amount may be small but a beginning must be made without any further delay. |
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