The Finance Ministry has asked public sector banks to begin negotiations for the next round of wage revision for employees, due from November 1, 2022.
“They may initiate the process of negotiations for the next revision,” the Department of Financial Services (DFS) said in a letter to the Chairman of State Bank of India and MDs and CEOs of public sector banks.
Wage revision in PSU banks has always been a tedious and time-consuming process with bank managements and unions engaging in tough negotiations. The All-India Bank Employees Association (AIBEA) has already called a strike on January 30 and 31 for implementing various demands, including wage revision, five -day week and reversion to the old pension scheme.
In July 2020, around 8.5 lakh bank employees got a 15 per cent increase in their salary packages with the Indian Banks’ Association (IBA) – the apex body of banks — and the United Forum of Bank Unions (UBFU) signing a Memorandum of understanding to settle the three-year long contentious issue of wage revision. The wage revision, which cost banks around Rs 7900 crore, was effective from November 1, 2017.
The bank managements and unions had also agreed to introduce the system of performance linked Incentive (PLI) in public sector banks for the first time.
“In view of the changing banking profile and needs of customers, availability of alternate delivery channels, we have been demanding that banks function from Monday to Friday (five days in a week) and all Saturdays and Sundays be declared as holidays,” AIBEA said. In the 10th Bipartite Settlement signed in 2015, it was agreed by IBA after due approval from the RBI and Government that 2nd and 4th Saturdays would be holidays. It was agreed at that time that introduction of 5 days banking would be considered looking at the experience gained, it said.
AIBEA said the pension scheme in banks was agreed upon in 1993 – with effect from January 1986 — in lieu of the bank’s contribution to the Provident Fund. While wage revision had taken place with effect from 1987, 1992, 1997, 2002, 2007, 2012 and 2017 for the serving employees and officers under the bipartite settlements, there has been no revision in pension drawn by the pensioners from 1986.
Unions have been demanding reversion to the old pension scheme for quite some time. “In the context of continued trend of high inflation and unabated price rise, pensions which are not linked to inflation and price rise are a huge disadvantage at old age,” AIBEA said.
“This is a genuine and justified demand for restoring the old pension scheme for these post-2010 employees and officers. Already some state governments have restored old pension scheme for their employees,” it said.
Wage revision talks normally benefit employees of PSU banks, old generation private banks and some foreign banks. In the previous agreement, 11 state-owned banks, 12 old generation private sector banks and 7 foreign banks signed up. New generation private banks like HDFC Bank and ICICI Bank are not part of this revision talks.