The Indian Banks' Association (IBA) has dubbed the 12.25% wage hike offer to bank employees as adequate, given the financial strains lenders face, though employees associations have called a two-day all-India bank strike on January 31 and February 1 and threatened to escalate their agitations later on if their demands are not met.
IBA has convened a wage negotiation committee meeting with union leaders on January 30 to discuss the matter again. Considering the present position of banking industry and affordability, adequate increase of 12.25% on pay slip component has been offered, IBA said in a letter to the chief labour commissioner on January 24.
United Forum of Bank Unions, the umbrella organisation of nine leading bank associations, demanded 20% wage hike on pay slip components, as articulated by IBA in its letter.
The unions are also demanding five-day banking and merger of special allowance with basic pay, among others. Over and above the encashment at the time of LFC (leave fare concession), five days additional encashment of leave (approximately 1.37% of payout) is offered every year to celebrate festive seasons, IBA said. IBA has explained that the performance-linked incentive (PLI) scheme, which is proposed over and above the basic pay hike, would work out to be a minimum 2.74% additional pay out over the base salary bill of Rs 52,625 crore.
Total pay out to an employee will be 16.36% (12.25%+1.37%+2.74%), it said.
It has proposed 10 days of salary (basic plus dearness allowance) for employees in banks which do not earn net profit but report a minimum 5% annual rise in operating profit, based on 2019-20 balance sheet.
PLI would be higher for better performing banks, provided they report net profit. Moreover, seven days annual encashment of leave is offered to employees over 55 years of age and in addition to normal leave encashment already available, there would now be 150 to 170 additional leave encashment available to most employees during their service period, the bankers' body said in its communication.
On the issue of five-day banking IBA said the proposal was not feasible at this juncture until and unless concurrence of all stake holders is received while it reasoned that the demand for merger of special allowance with basic pay cannot be acceded to as the cost is not affordable.
Bank unions are also demanding scrapping of new pension scheme, updating of pension, implementation of family pension and allocation of staff welfare fund based on operating profit.
IBA said the last two demands have been referred to the government. Union flag bearers said they are planning to escalate their agitation if the two-day strike fails to yield result. They have threatened three-day strike in March and indefinite strike from April.
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