Over 8.5 lakh employees, majorly from public sector banks (PSBs), will get a 15 per cent hike in pay, with the conclusion of the 11th Bipartite Wage Negotiations on Wednesday.
After three years of intense negotiations, the UFBU, which represents four bank officer associations and five workman unions, and the IBA on July 22 entered into a memorandum of understanding (MoU) for an annual wage hike of 15 per cent.
"The Indian Banks' Association is pleased to announce the conclusion of 11th Bipartite Wage Negotiations with bank unions and associations to be effective from November 1, 2017. The agreement reached today (on Wednesday) provides for a 15 per cent increase in pay slip," IBA chief executive officer Sunil Mehta said in a statement.
The 15 per cent hike in wages would be for a period of five years starting November 1, 2017.
A detailed bipartite settlement or joint note has been signed with UFBU and also BKSM (Bank Karamchari Sena Mahasangh), who were parties to the agreement, according to the statement.
About 37 banks, including public, private and foreign banks, have mandated the IBA to negotiate with unions on wage hikes for employees.
Almost 3.79 lakh officers of public sector banks and close to 5 lakh bank employees of public sector banks, old-generation private banks and foreign banks would get the benefit of the wage hike.
The new wage revision would entail an additional yearly outgo of Rs 7,898 crore for the banks.
IBA further said that to inculcate a sense of competition and also to reward the performance, the concept of the performance-linked incentive (PLI) scheme has been introduced for the first time. The scheme will be effective from the current financial year.
The scheme in public sector banks will be based on operating profit or net profit of the individual bank.
It is optional for private and foreign banks.
As per the agreement, the PLI would be payable to all employees annually over and above the normal salary payable.
"After prolonged discussions and protracted negotiation on various financial and non-financial issues, the long-awaited settlement has been reached between IBA and all constituents of UFBU for all scales of officers," four bank officer associations in a joint statement said.
The associations were All India Bank Officers' Confederation (AIBOC), All India Bank Officers' Association (AIBOA), Indian National Bank Officers' Congress (INBOC) and National Organisation of Bank Officers (NOBO).
The new basic pay was arrived at after merging 47.8 per cent of dearness allowance.
At 6,352 points and a loading of 2.5 per cent thereon, the new pay structure is Rs 36,000 to Rs 129,000 covering all the seven scales, with effect from November 1, 2017, the statement said.
The 10th Bipartite Settlement ended in October 2017. In the 10th Bipartite wage settlement, which was signed in May 2015, for the period between November 2012 and October 2017, the IBA had offered a 15 per cent hike.
Photograph: Krishnendu Halder/Reuters
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