Govt asks public sector banks to finalise next wage revision before 1 November

In a communication to CEOs and MDs of the state-owned banks, the finance ministry advised them to initiate the steps for smooth conclusion of next wage revision

New Delhi, April 9 (PTI): The finance ministry has asked the heads of public sector banks (PSBs) to finalise the modalities for timely implementation of the next pay revision from November.

There are 21 public sector banks, post merger of six lenders with State Bank of India (SBI), in the country. They together employ about 8 lakh people.

In a communication to CEOs and MDs of the state-owned banks, the ministry advised them to initiate the steps for smooth conclusion of next wage revision of the employee within the time-frame. “However, it is seen that several banks are yet to proceed in the matter,” it said, requesting the PSBs to “look into the matter and conclude the next wage revision prior to the effective date of 1 November 2017”.

The wage revision of public sector bank employees takes place every five year. The last revision was effected in November 2012. In the last wage negotiation between PSU banks employee unions and bank management, Indian Banks’ Association (IBA) had settled at 15% hike. Recently, Banks Board Bureau chief Vinod Rai had made a case that the compensation package across the board of public sector banks needs to be improved.

“Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package,” he had said. Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.

Bank Officers’ Unions want pay at par with the Central Government Officers

Demands include 5-day banking, PF to be calculated

on total salary and allowances, not only on basic pay

Mumbai, March 21: At a time when the government is contemplating cutting employee benefits to 10 laggard public sector banks, bank officers have demanded that they should be given revised basic pay at par with central government officers on the same principles of 7th Pay Commission.

The negotiations have not started yet, as not all banks have given the mandate to Indian Banks Association (IBA) to negotiate on their behalf.

Meanwhile, United Forum of Bank Unions, the umbrella organisation of bank unions, is yet to appoint coordinator for negotiations. But unions on a standalone basis have started to demand high emoluments. At the end of December 2016, the gross bad debt of the banking system crossed Rs. 6 lakh crore and the total stressed assets is estimated to be more than Rs. 9.5 lakh crore.

The government on March 16 shot a letter to 10 banks stating that capital infusion in these banks would depend upon quarterly milestones and only after these banks sign a memorandum of understanding with unions to sacrifice employee benefits should there be a need.

The 7th Pay Commission had recommended overall 23.55% hike in basic plus allowances. The government had accepted 14.27% hike in basics, while the allowanced would have to be decided later. According to reports, allowances could be decided in this month itself.

The current wage pact comes to an end in October. The last wage negotiation, pending since 2012, was settled in May 2015 at 15% hike. This time the government wanted to finish the process early and so it prodding banks to start the negotiation process, starting January of 2016, but banks dilly-dallied. Finally, in December 2016, the government shot its fourth letter to banks to start the process with the unions. Still, not all banks have given the mandate to the IBA. The State Bank of India (SBI), for example, will give the mandate to unions only after the merger process is over in April.

According to sources, 16 banks – all from the public sector - have given a mandate to the IBA to negotiate on behalf of banks. Five banks, including the SBI, Dena Bank and Bank of Baroda are yet to send mandate. The SBI will perhaps send in April after integration with associate banks, sources said.

The IBA will form panel and can start the negotiation with unions only after its gets all the mandate, an official at the IBA said.

The letter has gone to the IBA from by a joint committee of All India Bank Officers’ Confederation, All India Bank Officers’ Association, Indian National Bank Officers’ Congress and National Organisation of Bank Officers.

In their demand letter, these organisations have also demanded very steep hikes in dearness allowances (DA) and wage increases, for example, merger of special allowances with dearness allowance as on 31 October 2017, with existing basic pay. And have asked for a revised DA formula “with provision for automatic merger and improvement in compensation against price rise.”

Besides, an allowance “equal to amount of last drawn increment should be granted every year after reaching a maximum in the scale,” and “date of sanction of annual increments should be on January 1 and July 1 every year,” are also in the demand letter.

There are also such demands as two months’ salary to compensate expenses on transfer and payment of lump sum amount of transfer to meet the education expenses of children.

Out of 34 demands, there are provisions for improvement in leave travel concession and making the mode of entitlement as “air travel to all the officers, and executive class for senior executives.”

Also, the unions are back in their demand of five-day banking and Provident Fund calculation at the rate of 12% of the total salary and allowances. Plus gratuity at the rate of one month salary and allowances, without any ceiling. According to the income tax rules, provident fund is calculated only on the basic salary. Gratuity is calculated on 15 dayss. Besides, the unions want abolishment of new pension scheme and roll back to the old pension system.

“Unions always demand the moon and scale down to a laughable level,” said a senior officer who is part of a union. “Bank books have deteriorated since 2012 (when the last wage pact got implemented) and banks can’t do deficit budget like the government. What will happen is that government will refer the wage structure to the Pay Commission and unions will have absolutely no role in the process,” said the senior executive, who did not wish to be named.

If the commission gets to decide on bank pay, the chances of any hike will go for good, fear some union members.

Charter of Demands - Highlights: 

1. Revised basic pay at par with central govt officers
2. Revised DA formula automatically adjusting price rise
3. Allowance equal to last drawn increment to be granted every year after reaching maximum in scale
4. Two months’ salary to cover incidental expenses on transfer
5. Payment of lump sum amount on transfer to meet education expense of children
6. Leave fare compensation with entitlement of air travel for all officers and executive class for seniors
7. Provision for crèche facility/flexi timings/work from home for women employees
8. Five-day banking
9. Family should include father in law and mother in law, brothers and sisters (divorced or deserted)
10. PF to be calculated on total salary and allowances, not only on basic pay

IBA terms staff unions' demand for 23% wage hike irrational

Mumbai, December 25: Indian Banks’ Association has termed the demand by the United Forum of Bank Union for a 23 per cent increase in pay as “illogical and irrational”.  “Managing Committee of IBA and the Chairmen of all the banks were unequivocal in saying that the demand of 23 per cent increase of Unions/Associations is unaffordable, illogical, exorbitant and irrational,” it said.

The banks are willing to offer a 11 per cent hike on salary and allowances which the lenders say will translate into a 12.5 per cent hike on the balance sheet cost.  The IBA said this number has been arrived at after taking into account the paying capacity of the banks, lower profitability, higher requirements for provisions and further capital requirement under Basel-III.

Earlier, All India Bank Employees’ Association (AIBEA) said a meeting of the UFBU held at Mumbai on December 17 had expressed its dissatisfaction with the delay in settling demands for wage revision.

Fourteen rounds of discussion have been held so far between the union and IBA and consensus on effective date of implementation and merger of dearness allowance have been arrived at. However, they have not been able to arrive at an agreement on wage hike yet.

The UFBU had said that it would be holding a one-day all-India strike on January 7 followed by a four-day strike across the country from January 21-24. An indefinite strike would be initiated from March 16 to achieve the demand, it had added.

On the other IBA has made an appeal to UFBU to give up the agitational path and to return to the table for further negotiations. In the meantime, IBA has also requested all member banks to assess their paying capacity and advise them accordingly.

Negotiate, don’t agitate: IBA to unions

17.5% hike in the previous settlement was an exception: IBA

Mumbai, December 25: In the ongoing tug-of-war between unions and bank managements on the issue of wage revision, the Indian Banks’ Association has weighed in saying that the previous bipartite wage settlement was an exception as compared to earlier settlements and cannot be quoted as precedent.

Wage issues

This observation by IBA, which is the representative body of banks, comes in the backdrop of the 10th bipartite wage settlement in the banking sector being delayed for more than two years and unions, representing the interests of about 10 lakh employees, deciding to intensify their agitation for a wage hike.

According to the unions’ game plan, bank employees will not report to work for five days— January 7, and January 21 to 24— next month to press their demand for a wage hike. If bank managements do not settle the issue of wage revision in January-February then the unions have threatened to go on an indefinite strike from mid-March.

While bank managements are willing to offer 11 per cent wage hike, the expectation of the unions is for a 25 per cent (negotiable to 23 per cent) wage hike. In the previous (9th) bipartite wage settlement, covering 2007-2012, an average wage hike of around 17.5 per cent was given.

Aberration

Pointing out that in the past seventh and eighth bipartite settlements, the wage increase was between 10 per cent and 13 per cent, the IBA, in a statement quoting its Chief Executive MV Tanksale, said, “The ninth bipartite settlement was an exception…

“In the current wage settlement, a hike of 11 per cent on salary and allowances has been offered, based on the paying capacity of all the banks, lower profitability, higher requirements for provisions and further capital requirement under Basel-III, translating into 12.5 per cent on the balance sheet cost. This too is unaffordable to some of the banks.”

Back to the table

The Association said the issues regarding wage negotiation deliberated in the Negotiating Committee of the IBA were further discussed in a larger forum— Managing Committee of IBA— and the Chairmen of all the banks felt the demand for 23 per cent increase made by the Unions/Associations is unaffordable, illogical, exorbitant and irrational.

While IBA has appealed to the Unions/Associations to give up the agitation and return to negotiations to resolve the wage revision issue, unions don’t seem to be in a mood to relent.

Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, said bank managements are stonewalling employees’ demands for a wage hike by citing profitability constraints, the need to shore up capital for meeting the new Basel regulatory standard, and the provisioning burden.

“Bank employees are not responsible for the bad loans that have accumulated in the banking system. In fact, they have helped banks grow their business and profitability. So, there is no reason why bank managements should deny our demands,” he said.

IBA keen on early settlement of wage issues with PSU bank employees

Mumbai, December 25: IBA has urged Bank unions to give up their agitation and to continue their negotiation and is keen on early settlement of wage hike issues of the public sector banks.

It has also requested all member banks to assess their paying capacity and advise them accordingly.

The United Forum of Bank Union (UFBU) had said that it would be holding a one-day all-India strike on January 7 followed by a four-day strike across the country from January 21-24.

An indefinite strike would be initiated from March 16 to achieve the demand, it had added.

Bank unions call for strike on January 7

Coimbatore, December 21:  The United Forum of Bank Unions (UBFU) has called for an all-India strike on January 7. Expressing its resentment over IBA’s casual attitude and the Government’s lack of response to the union’s demand for an immediate and reasonable wage settlement, the All India Bank Employees’ Association General Secretary CH Venkatachalam said that the Forum has decided to protest including holding mass demonstration at all centres on December 30.

Black badge protest

This will befollowed by black badge protest on January 5, 2015,mass demonstrations/procession and rallies the following day and culminating in all-India strike on January 7. The forum has decided to further intensify its protest by calling for a four days continuous strike between January 21 and 24 and indefinite strike from March 16.

Hits out at IBA

Condemning the action of the IBA in directing the banks to revisit the mandate given to it (IBA) earlier as ‘nothing but a ploy to delay the wage revision negotiation process’, Venkatachalam said, “IBA is sticking to its offer of 11 per cent increase in pay slip component.”

‘IBA is ready to sit and resolve’

But, the IBA chief Mohan V Tanksale, who was in the city to moderate a panel discussion on the implication of Performance Management System in traditional private banks in the context of Gopalakrishna Committee Report on “Capacity and Competence Building in Traditional Private Banks” said that a settlement has to happen and the IBA is ready to sit and resolve the issue.

“We are willing to negotiate. But 23 per cent increase seems quite unreasonable,” he said.

Why one day strike and then 4 days strike?

AIBOC reveal in their circular ..........

Comrades, we have been receiving lot many queries about the decision of single day strike of 7th January, 2015.
 We would like to inform the background which led to the decision of one day strike.
 IBA, vide their Letter No. CIR/HR & IR/XBPS-1/996 dated 2nd December, 2014,
had advised the member banks to update their respective Boards on the present status 
of the wage negotiations developments, its financial implications and if felt necessary,
 revisit the mandate. 

This being a very serious development was discussed in the Working Committee Meeting of Confederation held on 8th December, 2014, at Delhi. 
The Central Office drafted a letter and sent to all its Affiliates for onward submission 
to the Management of the respective Banks to thwart IBA’s tactics of delaying Wage Revision 
and also to obviate the possibility of tinkering with the earlier mandate. 
It was also decided that the same stand would be taken by our Representatives on the boards, 
when the agenda comes for discussion. 

Comrades, this indeed is a very grave development which cannot be ignored. 
The UFBU Constituents met in Mumbai, on 17th December, 2014, subsequent to conciliation talks.
 One of the constituent of UFBU apprised of having taken a decision to call for one day strike 
on this issue and wanted other constituents to join the strike.

 We expressed our view and apprehensions over the effectiveness of one day strike, 
as the issue would have been placed and discussed in many Bank’s Boards by then. 
Since the Affiliate was firm to go on one day strike in first week of January, 2015, 
UFBU decided to observe the strike on 7th January, 2015, for the sake of solidarity 
and to avoid any confusion. 

Comrades, the call of four days strike from 21st to 24th January, 2015 is unprecedented 
and unheard in the history of Banking Industry as a whole. 
The dates are preceding two holidays as 25th January being Sunday and 
26th January a National Holiday. 
Consequently, the Banking will come to a grinding halt for six days. 
Our membership have long being demanding an action like this, but comrades, 
for winning a bigger battle, many small wars have to be won. 
A lot of preparations are required to be undertaken for making our call a tremendous success. 
A thorough action programme is required to be chalked out for preparation at the grass root level. 
Let each one of us make it a mission to make the strike call a huge success 
so that its impact shakes the walls of apathy of the higher authorities. 
This is our fervent appeal to each member of ours, to implement 
all the joint agitational calls given by UFBU religiously.

Wage pact: bank unions for long-haul agitation

Thiruvananthapuram, December 18: The United Forum of Bank Unions, which has been negotiating with the Indian Banks’ Association for wage revision in the banking sector for the past two years, has decided to go on an indefinite nationwide strike from March 16.

The decision was taken by the top decision-making body of the UFBU following breakdown of yet another round of conciliation in the presence of the Central Government’s Deputy Chief Labour Commissioner in Mumbai on Wednesday. “We have decided to go on all-India indefinite strike from March 16,” MV Murali, convenor of the nine-union UFBU, told BusinessLine. “Before that, the unions will go on a four-day national strike from January 21; and on January 7, there will be a one-day strike.”

The UFBU’s tough stand follows the logjam in the talks for a five-year wage agreement after a dozen rounds of negotiations between UFBU and the negotiating team of the IBA, which represents the managements of the public- and private-sector banks in the country. Murali said that on Wednesday, the conciliation talks between the team led by IBA’s Deputy CEO K Unnikrishan and UFBU leaders ended in an impasse as the IBA stuck to its guns and there was no forward movement on the demands made by the unions. The IBA was willing to raise wages in the banking industry by only 11 per cent.

‘Delaying tactics’

AK Ramesh Babu, President of the Bank Employees Federation of India (BEFI), a member of the UFBU, told BusinessLine that the January 7 strike was an ‘immediate response’ to the highly objectionable ‘delaying tactics’ of the IBA. The IBA had now come up with a new condition that it needed the mandate of the board of directors of all individual banks in the IBA for making any further concessions on wage revision. It had sent circulars to individual bank boards asking them to ‘review the mandate.’

According to Vishwas Utagi, General Secretary, Maharashtra State Bank Employees Federation, bank managements are stonewalling employee demands for a wage hike citing profitability constraints, the need to shore up capital to meet new Basel III norms, and provisioning burden due to stressed loans. “Bank employees are not responsible for the bad loans that have accumulated in the banking system. In fact, they have helped banks grow their business and profitability. So, there is no reason why bank managements should deny our demands.”

10th Bipartite Update

Today (17.12.2014) UFBU hold an internal meeting with its constituents in Mumbai and took following decisions :
→ One Day Strike on 7th January
→ Four Days strike from 21st to 24th January
→ Indefinite Strike from 16th March onwards
More details soon. Bankers, prepare for battle. What we all were demanding, as UFBU have came up with it.

Talks on wage revision between IBA and UFBU at Mumbai on 17.12.2014

Conciliation meeting on 17.12.2014

Latest news:
Conciliation meeting is arranged by
Labour commissioner at 11.30 AM
at Mumbai on 17.12.2014 for
Talks on wage revision between IBA and UFBU.
******************************
Previous news:

BEFI Circular dt.08.12.2014 says........

the next meeting of UFBU has been slated to be held on 
17th this month at Hyderabad to take stock of the situation and 
to decide upon further course of action depending upon developments. 

Let us all await the decision of UFBU and prepare ourselves 
for carrying forward the struggle, as may be so decided, 
with courage, conviction and zeal.
Get prepared for intensified struggle ahead.

UFBU and IBA meeting on 13/06/2014 on bipartite

 Today's Meeting : (13/06/2014) As expected UFBU and IBA meeting ends in stalemate : IBA increased the offer to 11% but UFBU wants at least 25% increase. Waiting for full details

SBI clarification on education loan

Mumbai, October 5: State Bank of India (SBI) authorities on Thursday clarified that the application for an education loan received at the Tiruvalla branch of the bank the other day was returned as it didn’t comply with the existing norms laid by the Indian Banks’ Association (IBA) and Union Government for sanctioning loans. 

Reacting to media reports, an SBI press note maintained that as per the existing model education loan scheme in vogue since August 2011, admissions under the management quota are to be kept outside the scope of the Education Term Loans (ETLs) scheme.

Make it easy for students to get education loans, bankers told

New Delhi, Aug 18:  Finance Minister P. Chidambaram has come to the rescue of students facing difficulty in getting education loans. Henceforth, a bank manager will be penalised for “wilful rejection” of eligible education loan applications.
At the same time, it has been decided that students securing admission under management quota will also be eligible for education loans. However, they will get loans only if they meet various criteria such as the minimum required marks, etc.  These steps are part of a new set of education loan guidelines to be issued soon.  They were discussed in a meeting called by the Finance Minister to review the performance of public sector banks.
Addressing the media after the meeting, Chidambaram said, “Bank loan is a right of students meeting all the parameters. That is why each of the applications should be received and acknowledged.”  He announced that officers receiving applications cannot reject them — only a person who is at least one level senior to the receiving officer can do so. Even then, there should be a proper reason given for rejection of the application, he said.

Pulls up bankers’ body
Banking body Indian Banks Association (IBA) has already issued a circular regarding model education loan scheme. This has attracted the ire of the Minister. He showed his displeasure by asking the IBA to issue a revised circular incorporating various changes discussed and agreed upon. He also announced that the Cabinet will consider the creation of a Credit Guarantee Fund in a fortnight. This fund was announced in the Budget this year. This scheme aims to ensure better flow of credit to deserving students.

Bad loans
Talking about Non Performing Assets (NPAs), Chidambaram allayed fears by saying that the rise in NPAs was “not alarming.” Banks are also making adequate provisions for bad debt, he said. During the first three months of the current financial year (April-June), gross NPAs (as a percentage of gross advances) of public sector banks went up to 3.51 per cent from 2.57 per cent. Net NPAs have registered a 1.72 per cent rise, as against the 1.14 per cent rise in the same period of the previous year.

Bank staff threaten two-day strike

The All India Bank Employees’ Association (AIBEA), which represents the employees of the public-sector banks, has threatened to go on a two-day strike from August 22, against the government’s proposed Banking Bill, closure of rural branches and other set of banking sector reforms.
In a circular to the members, C H Venkatachalam, general secretary, AIBEA, said “the attacks are increasing and the IBA/government are indifferent to our demands. Hence UFBU has given the call to revive the agitation and struggle programmes. Further, the government is also proposing to amend the banking laws during the current session of Parliament. UFBU has therefore, decided that they should be ready for instant protest strike in such an eventuality”.
“…a bipartite meeting between the IBA and UFBU on July 24, 2012 was held as per the advice of the Deputy CLC. While we have explained all our demands to the IBA in detail and emphasised the need for an amicable solution to the issues, the IBA has remained
unresponsive till date. In view of this, as decided in UFBU meeting held after our discussions with the IBA, we have served the strike notice on IBA,” read the circular.
The main issues include settlement of pending demands, stopping arbitary guidelines of human resource issues, stopping unilateral implementation of Khandelwal Committee Recommendations, a freeze on outsourcing of bank jobs, a hold over banking sector reforms and non-closure of rural branches.
 “It is also learnt that in the ensuing monsoon session of Parliament, the government is proposing to get the Banking Law Amendment Bill passed. The proposed amendments to the Banking Regulations Act and Bank Nationalisation Act are unwarranted and aimed at further de-regulating and liberalising the banking sector with increasing voting rights for foreign and corporate investors, etc. Hence, as decided in our last meeting, all our unions and members are ready for an instant strike if the government would suddenly bring the Bill for consideration by Parliament,” said Venkatachalam.