Categories: Business

Good news for bank employees, salary will increase by 15% every year and arrears from 2017


bank unions, IBA agree on 15 percent annual wage hike

new Delhi. After nearly three years of lengthy negotiations, bank employees' unions and the Indian Banks Association (IBA) have agreed to increase the salaries of employees by 15 percent every year. With this decision, banks will incur an additional burden of Rs 7900 crore every year. This increment will benefit 8.5 lakh bank employees across the country. This increment will be implemented from 2017. Under the agreement reached on Wednesday, now public sector bank employees will also be given Performance Based Incentive (PLI). The determination of PLI will depend on the operation or net profit of the individual bank.

The Indian Banks Association said in a statement that the basic salary has been merged with dearness allowance. A total of 37 banks, including public, private and foreign banks, had entrusted the responsibility to the IBA to negotiate with the unions on wage increases for their employees.

Under the agreement between the IBA and the bank unions, salaries and allowances will increase by 15 percent every year and this wage increase will come into effect from March 31, 2017. The performance based incentive for public banks will commence from the current financial year, while it will be optional for private and foreign banks. The contribution of banks in the New Pension Scheme Fund will also be increased from the present 10 percent to 14 percent. Under the agreement, permission will be sought from the government for this.

IBA Chief Executive Officer Sunil Mehta said that today the IBA and UFBU have signed an agreement under which 15 per cent salary increment will be given to the bank employees every year, eliminating the limit for family pension and 30 per cent of basic salary. Was also given in-principle approval.

All India Bank Employees Association General Secretary CH Venkatachalam said that the result is satisfactory after 35 rounds of talks. He said that detailed information on the increment and implementation of allowances will be finalized in the next few days. In 2018, the IBA offered only a 2 percent wage increase. Subsequently, the bank unions opposed it and went on a two-day strike on May 30 of the same year.

Know how much PLI will get

The agreement states that in the current banking scenario there is a lot of competition between government, private and foreign banks. In order to encourage better performance among the competitors, performance based incentives have been offered to government bank employees. If the operating profit of a bank is less than 5 percent then its employees will not get any incentive.

If the bank's operating profit is between 5 and 10 percent on an annual basis, employees will be given an additional 5 days' salary. If the operating profit is more than 15 percent, then the employees of that bank will be given 15 days' salary extra.

This post was published on July 23, 2020 9:59 am

Content Team

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