Employees of 35 banks, including public-sector banks, certain foreign banks as well as a few very old private banks, will receive a 15 per cent hike in salaries. A bipartite agreement has been signed by the Indian Banks Association (IBA) and Workmen Unions. This hike in wages will increase the annual wage burden of the banking sector to Rs 7,900 crore.
For Grade A officers at public-sector banks, this 15 per cent hike means an addition of just Rs 1,100 to their individual salaries, and, it merges the dearness allowance (DA) of 6352 points. Therefore, most of the hike consists of the amount the officers are already being paid as DA. Henceforth, family pension will also be paid at a uniform rate of 30 per cent of the pay of the deceased employee, subject to Government approval.
Effective this financial year, for the first time, a performance-linked incentive (PLI) scheme has been introduced with the aim of instilling competitiveness in the staff. The scheme is also a way to acknowledge good performance.
While the scheme is optional for private and foreign banks, the public-sector banks will calculate the incentive on the basis of operating profit/net profit of the individual bank.
Medical expenses will be reimbursed only to the limit of Rs 2,355 per year.
Wages and benefits of bank staff are renegotiated every five years, for which the bipartite agreement is a platform. The previous agreement had expired in 2017. Therefore, it has been a long wait for these employees. The trade unions have been complaining to the Government about the wages of PSU bank staff being much below that of government employees. This only added to the huge difference in incomes of the public- and private-sector bank employees.
The hike is important as the pay scales of staff of public-sector insurance companies, the Reserve Bank of India and public financial institutions, such as NABARD, are revised on the basis of the wage agreement signed with the bank unions.