Bank employees will get 15 percent hike in wages

On Jul 23, 2020

Mumbai: After a three years of intense negotiations, the Indian Banks’ Association (IBA) have agreed for an annual wage hike of 15 per cent for a bank employees, due to which as many as 8.5 lakh bank employees are set to benefit from this wage hike. A move that will result in an additional yearly outgo of around Rs 7,900 crore for the lenders will be effective from November 2017.

As per the agreement reached on Wednesday,
Performance Linked Incentive (PLI) will also be introduced for public sector bank staff and it will be based on operating or net profit of individual banks concerned. Basic pay has been merged with dearness allowance, the IBA said in a statement. Close to 37 banks, including public, private and foreign banks, have mandated the IBA to negotiate with unions on wage hikes for their employees.

The annual wage increase in salary and allowances has been agreed at 15 per cent of the wage bill as on March 31, 2017, which works out to be Rs 7,898 crore on payslip components, as per the agreement signed between the IBA and bank unions. The agreement on the 15 per cent annual wage hike was reached at a meeting between the IBA and members of the United Forum of Bank Unions (UFBU) representing workmen unions and officers association.

Today IBA & UFBU have Signed an MoU for 15% increase in pay slip component of Bank Employees, in Principal agreement to remove cap & offer 30 % of Basic Pay as family Pension, (1/2)@DFS_India @FinMinIndia @ChairmanIba #11thbipartite
— IBA_Chief_Executive (@ChiefIba) July 22, 2020

‘Today IBA & UFBU have signed an MoU for 15% increase in pay slip component of Bank Employees, in Principal agreement to remove cap & offer 30% of Basic Pay as family Pension,’ IBA Chief Executive Officer Sunil Mehta said in a tweet. As many as 35 rounds of negotiation meetings took place before reaching the common ground and the outcome is satisfying, All India Bank Employees Association General Secretary C H Venkatachalam said.

During a round of wage negotiations in May 2018, IBA had offered only two per cent wage hike. In protest, bank unions had also gone on a two-day strike from May 30 that year. The parties will endeavour to finalise the Bipartite Settlement within a period of 90 days from July 22, the agreement said. If the operating profit is between 5-10 per cent, employees would be entitled to get an additional five days salary, An additional 15 days salary will be given in case of operating profit exceeding 15 per cent on an annual basis. The latter will be applicable only if the bank concerned has a net profit.