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.