Coming soon: Far more attractive compensation package for public sector bank employees

Attractive pay packages: PSU bank Employees to get

higher bonus, ESOPs, says Bank Board Bureau Chief

New Delhi, January 5 (IANS): Public sector banks (PSBs) will have far more attractive pay packages with increased bonus, Employee Stock Option Plans (ESOPs) and other performances-linked variables in 2017-18, Bank Board Bureau Chairman Vinod Rai said on Thursday.

"By next fiscal we are looking at a far more attractive package for public sector banks with bonus, ESOPs, performance linked variables -- monetary or non-monetary benefits to make it more attractive for professionals to enter PSBs," Rai said here at the 97th Associated Chambers of Commerce and Industry of India (Assocham) Foundation Day. "We may not be able to change the fixed income but we are looking at making the variable part of the package more attractive," he added.

The compenation package of the PSBs needs to be improved in some way, he added. Rai said that the government is also looking at appointing full-time director or executive director in the PSBs, apart from the post of chairman and managing director (CMD). The executive director or director post is being thought of so that he can be held accountable for the decisions taken at the bank, he said. "Those people will be appointed who have at least six or more years of service remaining," Rai said.

The Bank Board Bureau is also working upon the proposal of formation of the government stake in the PSBs into a holding company, which will be run by professionals and will make selections of directors and CMDs for the bank. "Over a period of time, the PSBs may go into mergers," he added. In order to manage the non-performing assets (NPAs) of the banks, Rai said that he was looking at a scenario wherein the banks are run by boards, who take the risk of decision-making.

"We are trying to collate people who will be willing to join the boards of PSBs. Effort is to ensure that the banks are indeed run by boards comprising of professionals," he said. He also spoke of formation of an oversight committee for both private and public sector banks which will help the banks resolve their bad loan cases. "The attempt is to provide an oversight committee of two people to whom cases will be sent to resolve the processes. The case then has to come back to the board because ultimately the bank has to take the decision," he said.

"This is to provide comfort to the banks," he added. Calling for certain degree of transparency in decision making, he said that every organisation should be able to withstand the test of scrutiny. "We are going to be in an audit from all strata of society. All governments and corporates should be able to withstand that audit," he added.

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.