The bank unions and Indian Banks’ Association (IBA) signed the bipartite wage agreement on Wednesday, giving bank employees a 15 per cent hike and pushing up wage bill by about Rs 7,900 crore per year.
Of this, Rs 3,385 crore wage bill hike is for non-officers, while the rest is for officers. The wage agreement is for the period November 2017 and will run till October 2022. Bank employees can expect to get their arrears before Diwali, but no official communication has been issued yet.
“All accumulated increments during this period shall be released with effect from 01.11.2020," said a statement issued by the officers’ union.
A statement issued by the IBA said to inculcate a sense of competition “and also to reward the performance, the concept of performance linked pay has been introduced for the first time.”
The wage negotiation covered 29 banks – 12 public sector banks, 10 private banks and seven foreign banks, and five lakh employees in the banking sector. A joint statement issued by the four unions representing workmen said for the first time there will be uniform basic, dearness allowance, house rent allowance, special allowance and transport allowance for all locations in India.
The HRA rate will be 10.5 per cent on pay all over India.
Bank employees were mainly demanding three issues -- wages at par central pay commission, five days working week, and updation of family pension. The first two has not been achieved, but the IBA has agreed to recommend the family pension scheme to the government. It is now the government to decide whether that facility should be extended to the bank employees.
However, Finance Minister Nirmala Sitharaman said on Tuesday at the annual general meeting of the IBA that retired bank employees should be treated in the same fashion as in the defense sector. Hence, some improvement in pension schemes could be expected from the government, although pension for retired employees improved under the current wage pact.
“The Non-financial issues like five-day week, updation of pension in the wake of the recent announcement made by the Hon’ble FM for the seniors, Grid holidays, D & A regulations, Introduction of North East Allowance for all officers etc., were taken up for discussion for logical conclusion," said the statement issued by officers’ union.
For officers, scale 5 officers will get one stagnation increment with effect from November this year. The periodicity of such stagnation increment will be two years, while for retired employees the notional periodicity will be every two years since November 2017.