The Indian Bank Association (IBA) and bank employee unions have reached an agreement on the 12th bipartite wage hike settlement, which will be effective for the next five years, starting from November 1, 2022. According to the Memorandum of Understanding (MOU) reviewed by Moneycontrol, bank employees will receive a 17 percent increase in salary.
Rupam Roy, the General Secretary of All India Bank Officers’ Confederation (AIBOC), stated to Moneycontrol that the final agreement is expected to be signed within two months, although the cut-off period for the agreement is 180 days.
The MOU outlines that the new pay scales will be constructed by merging the Dearness Allowance corresponding to 8088 points (average Index point applicable for the Quarter of July, August, and September 2021) to the basic pay as of October 31, 2022. Additionally, a loading of 3 percent, amounting to Rs 1795 crore, will be added.
Regarding the additional 3 percent loading after the merger of Dearness Allowance, Roy mentioned that it would lead to improvements in pension for all retirees from 1986, including those under the proposed 12th bipartite settlement.
The MOU also addresses the ex-gratia amount for pensioners and family pensioners who were drawing pension as of October 31, 2022. It states that the monthly ex-gratia amount will be considered along with the pension as a one-time measure applicable for the current bipartite settlement. The unions have requested the implementation of this measure before the final bipartite agreement is signed.
In the previous bipartite settlement in November 2020, IBA and bank employee unions agreed to a 15 percent increase in pay for bank employees. This 15 percent wage bill hike covered the five-year period between November 2017 and October 2022.
The MOU also highlights that IBA has recommended to the government that all Saturdays be declared as holidays under the Negotiable Instruments Act (NI Act) for the banking industry. This aligns with previous negotiations with unions, and IBA will pursue this recommendation.
On December 6, the Finance Ministry confirmed that it had received a proposal from India’s banks regarding five days of banking. Bhagwat Karad, MOS Finance, stated in a written reply to parliament during the ongoing winter session that IBA has submitted a proposal to declare all Saturdays as banking holidays.
Krishna Kumar, the General Secretary of All India Punjab National Bank Officers Federation, expressed his dissatisfaction with the 17 percent increase, stating that it should have been at least 20 percent. Kumar emphasized that considering the annual operating profit of around 2.40 lakh crore of Public Sector Banks (PSBs) in FY 2022-23 and 2.10 lakh crore in 2021-22, the loading in basic should have been around 8 percent. He added that the initial basic salary of a scale one officer in PSB will be around Rs 47,500, which is considerably lower compared to other government of India employees.
AIBOC’s Rupam Roy also expressed his dissatisfaction with the current hike, acknowledging that while he understands that young bankers may not be happy, it’s important to pay respect to retirees. He stated that he is not entirely happy with the current situation but is pleased for the retirees.
Another anonymous public sector banker expressed frustration and anger regarding the decision, highlighting that banks are currently making record profits and bankers are working beyond their limits due to staff shortages. They expressed disappointment with the increment received, considering the circumstances.
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