Over eight lakh employees from 29 banks will get a wage hike of 15 per cent involving an outgo of Rs 7,900 crore for the banks. Both the sides agreed to implement the concept of Performance Linked Incentive scheme for the first time from the current fiscal.
The Indian Banks’ Association (IBA), the apex body of the banks, concluded the 11th bipartite wage negotiations with bank unions and associations, which will be effective from November 1, 2017. “The agreement reached today, provides for 15 per cent increase in pay slip. To inculcate a sense of competition and also to reward the performance, the concept of Performance Linked Pay has been introduced for the first time,” IBA Chief Executive Sunil Mehta said.
A detailed bipartite settlement/joint note has been signed with United Forum of Bank Unions (UFBU) representing four workmen unions and four officers associations and also Bank Karamchari Sena Mahasangh (BKSM) who were parties to agreement, IBA said.
Of the total wage outgo, the Rs 3,385 crore wage bill hike is for non-officers, while the rest is for officers. The wage agreement is for the period November 2017 and will run till October 2022. However, there was no decision on five-day week for bank employees.
The Performance Linked Incentive scheme in public sector banks will be based on operating profit/net profit of the individual bank. It is optional for private and foreign banks. In the previous wage settlement, signed in May 2015 for the November 2012-October 2017 period, the IBA had offered a 15 per cent hike.
IBA initially offered a pay hike of 12 per cent which was rejected by the bank unions. Salary and wage revision in the banking sector takes place through a wage revision settlement between the workers and management. This wage revision agreement in the banking industry is valid for five years only.