Though public-sector banks had an operating profit in the last two fiscals, they faced a net loss due to bad loans.
The Indian Bank Association (IBA) has offered a two per cent hike to the employees of all PSU banks. The wage revision for bankers was due from November 1, 2017.
Bank employees across the country are calling this hike an insult. Rejecting the hike, they are now threatening to go on a 48-hour long strike by the end of this month, if their demands are not met.
In a meeting held on May 5 to negotiate the wage revision between IBA and the United Forum of Bank Unions (UFBU) — which comprises the nine major employees’ unions and officers’ associations — the IBA offered a mere two per cent increase over the total wage bill of banks as on 31 March 2017.
During the last (10th) Bipartite Wage Settlement that was made effective from 1 November 2012, the IBA had agreed to a hike of 15 per cent increase over the total wage bill.
Though public-sector banks had an operating profit in the last two fiscals, they faced a net loss due to bad loans.
For instance, in Fiscal 2017, Indian public-sector banks had an operating profit of around Rs 1.59 lakh crores, but bad loans were more than Rs 1.70 lakh crore, which resulted in a net loss of more than Rs 11,000 crore.
Similarly, in the previous fiscal (2016), the operating profit was over Rs 1.36 lakh crore, while the bad loans were around Rs 1.54 lakh crore, which resulted in a net loss of more than Rs 18,000 crore.
The Bank Employee Union argues that the non-performing asset problem is not the employees’ making. The big loans, which are pending resolution, are all sanctioned at the management level and at the level of the finance ministry.
The Union states that the bank employees had worked hard like soldiers for the smooth implementation of demonetisation. Instead of getting rewarded for the same, they are now being penalised due to the current inflation rate.
The employee union has now 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 IBA’s proposal for a two per cent wage hike.