Thursday, June 18, 2009

Bank Wage Revision[Update on 17th June] : IBA reduce offer to 15% hike,UFBU may go for agitation.

The managements of state-owned banks have offered to hike wages by 15%, but the employees’ unions want a revision of at least 17.5%.
A 15% wage hike will mean an extra payout of Rs 4,200 crore annually for the banking industry. When contacted by ET, Indian Banks Association (IBA) chairman and Union Bank of India CMD MV Nair declined to comment. “The negotiations are on and it will take a couple more meetings for both parties to arrive at a decision,” he said.

Every five years, the managements of public sector banks, represented by IBA, negotiate a wage revision with the United Forum of Bank Unions (UFBU). Under the last agreement that expired on October 31, 2007, IBA had agreed on a 13.3% hike.
Almost all government-owned banks have set aside some capital to absorb the wage-hike impact that will be implemented with effect from the last fiscal. State Bank of India has kept a provision of Rs 1,380 crore for payment of arrears, Punjab National Bank Rs 600 crore and Bank of India has provided for Rs 187 crore.

Other issues like appointment on compassionate grounds, outsourcing of jobs and offering employees an option for pension are yet to be discussed by the unions and IBA. Earlier, the trade unions had demanded a 40% hike in salaries of clerical staff and a 25% hike for officers. This, however, was unacceptable to the managements.
Source : Economic Times.

In the light of the latest offer made by the IBA, a meeting of the UFBU was held yesterday (17-6-09) in Bangalore. Comrade K.S. Shetty (President, AIBOC) presided over the meeting. While the meeting was discussing the issue, the IBA informed the UFBU that their offer of 17.5% increase stands reduced to 15% in view of the advice received from the Government of India. In view of this unacceptable and provocative situation, the UFBU decided to take organizational decisions to achieve our demands.

Arising out of yesterday’s meeting, a letter has been addressed to the Chairman, IBA in this regard. The letter is reproduced hereunder which our members will find explicit. All our units and members are advised to keep in readiness to implement any programme that will be decided upon by the UFBU, should the IBA and the Government of India choose to persist with their provocation and confrontation with the bank employees and officers.

Text of the letter addressed to the Chairman, IBA by the Convener, UFBU.

Dear Sir,

This has reference to the last round of discussions held on 9.6.09 between IBA & UFBU on our current demands of wage revision and pension option.

You will appreciate that the discussions were held in the background of the strike call given by UFBU and arising out of conciliation proceedings held by the Chief Labour Commissioner, Govt. of India and his advice to both the parties to sit together to find amicable and acceptable solution to the issues involved.

During the discussions held on 9.6.09, you would have observed that there were earnest efforts from the side of UFBU to find mutually acceptable solutions. Similarly we also felt that IBA was willing to resolve the demands amicably and expeditiously.

On the issue of sharing the additional cost of pension, it was agreed that out of the total cost of Rs. 6,000 crores, Banks would take a share of Rs. 4200 and employees / officers would bear a cost of Rs. 1800 crores. Thus one important issue was mutually sorted out.

As regards IBA’s demand that Unions should agree for implementing the New Pension Scheme for the newly recruited employees/officers, IBA came forward not to insist on this condition and would agree for continuance of the provisions of Pension Settlement to be available for all existing employees as well as for the new recruits joining the Banks upto 31.3.2010. From UFBU we expressed the view that the cut-off date should be 31.10.2012 i.e. co-terminus with the expiry of the proposed wage revision settlement. The issue was to be further discussed and sorted out.

Regarding wage revision, to our demand for a minimum of 20% increase in wage bill, IBA was willing to increase their offer from 15% to 17% subject to the approval of the Managing Committee

In view of this positive climate from both sides to work out some acceptable positions, we offered to defer our strike action and continue the discussion with a request to the IBA to expedite the settlement in view of the growing anxieties of the bank employees and officers.

IBA agreed to discuss the matter and inform us of their view on our demands. On 10th June, as assured, IBA contacted us and we were informed as under:

1. IBA is agreeable to offer an increase on 17.5% over the wage bill as of 31.3.2007
2. IBA confirms that pension cost sharing would be Rs. 4200 & Rs. 1800 crores respectively by the Banks and employees/Officers.
3. Existing pension scheme would continue to be in operation upto 31.3.2010.
4. Other issues of IBA including outsourcing would have to be discussed and resolved.

We had informed you that UFBU would meet immediately and submit our reactions to the IBA.

For this purpose, UFBU meeting was held today in Bangalore to discuss the revised offer of IBA and take a view.

But we are now surprised and shocked to be informed by IBA that as per the advice of the Government, the IBA cannot offer anything more than 15% increase.

While the bank employees and officers are anxiously awaiting early conclusion of the discussions and arriving at a final settlement on their demand for a fair wage revision and an option for PF optees to join the pension scheme and while UFBU was looking forward to clinch a broad understanding on these demands in the background of the positive discussions held on 9.6.09, the IBA’s present stand point comes as a bolt from the blue and is very surprising and shocking. It is equally unfair since it amounts to going back on the offer made by IBA.

UFBU, from its meeting in session now, rejects this offer of IBA as the same is totally unacceptable to us. UFBU also feels that this approach of the IBA/Government would constrain the UFBU to go back to its status-quo-ante position of agitation and strike which was deferred due to the positive approach of the IBA in the discussions held on 9.6.09.

The UFBU feels that before we take any decision to react organizationally, we should meet the IBA Chairman to sort out the issues amicably on the basis of the discussions held on 9.6.2009.

In view of the above, we shall thank you to provide us an early time convenient to you to enable us to meet you in person and submit our view points.

Since IBA’s going back on its offer has created an extraordinary situation of provocation, we desire an urgent meeting with you.

We await to hear from you before proceeding further.

Thanking you,

Yours faithfully,


C.H. Venkatachalam


Source : All India Bank Employees Association.


skp said...


If the govt. wants to give us only 15% increase, then IBA should also allow us to go for begging with a begging bowl so that we can take care of our families in a decent way. The Govt. employees were given a 40% increase in their grades and the bank employees are being denied even 20% increase. What a shame.

Stuffed Goofy said...

It is totally unjustifiable to deny the benefit of decent wagerevision to officers and employees of banking industry as the financial sectors were highly paid during 1980 s and 1990 s keeping the level of risk and responsibility that they are taking in their day to day activities. bank general managers were draw a basic salary of 3000 on par with the secretary level during 1977 if same level of treat ment or for all practical purposes if banking sector is considered as a govt department then also the employees and officers stands to gain as much as 40% . it is high time that the industry should say good bye to bipartite concept and come to pay commission concept. bank men should meet the fm who is not as rigid as his predecessor and try to convince the atleast on par wages with their govt counterparts and clinch the issue with atleast 20% wage revision with one more pension option at the earliest.


Aggrieved Bank Officers said...

Sir,It is quite unfair on the part of Government/IBA and the decision of offering 15% appears to be illogical and is not commensurate with Risk & Responsibility taken by the Bank officers.In case this goes through the Bank employees will be lowest paid akilled employee. The Govt has given decent hike to every body except Bankers who are at the pity of bufoons who negotiate on their behalf and do not have any commonsense.They demand 100% and come back to a figure of 20% without thinking about serving employees. The Government should allow the POs who joined the Bank because of its attractivenes in 80 & 90s to join the Govt service so that they can get some mental satisfaction.

Antaryamee said...

The word shameful is not adequate to describe the situation the negotiation is going through.It is very clear that UFBU is loosing its confidence.Why the organisation is so shy of plunging in to agitional action ?
No respectable solution is possible without a bonafide agitiion
How long the leaders will take to learn this simple truth ?

SR said...

My dear, self declared, total fool UFBU Leaders,

Why are you expecting miracle from IBA or Finance Ministry ? The civil servants (those serving to self only) sitting in the finance ministry will not realise the situation without an indefinite strike.

So stop begging from IBA and give notice for indefinite strike . Otherwise, please............. resign from the Union leadership and let the government decide our fate.

joshibv said...

In my view, the leadership is playing hide and seek game in as far as settlement of wages and other issues are concerned.

Going by the trend and attitude of calling for 1 day strike and calling it off at the 11th hours, indicate that everything is not well with leadership.

Let us recall the 2 day strike call given during the last week of March 2007 and calling it off just a day before the strike date on the assurance of IBA that pension issue will be sorted out and settled before 30/06/2007, and unfortunately and ironically, it is nearing two years since then- any body, even immature person will call it a hide-n-seek game. Modus operandi will be "call for strike during last week of any month- including April" go for talks- hold talks- call-off strike on the assurance of amicably settling the issues with the unions".
It is anybody's common sense that one day strike has no significance at all, except employess losing a days' wage- since, ATM across nook and corner cater to the ordinary public and internet and mobile banking take care of corporate and tech savy individuals in transferring funds/making bill payment etc.

What with all strength behind UFBU there is hesitation in calling for a week-long/indefinite agitation? What is preventing? If valid ground reasons are there, let them be made public by the UFBU.

Why the Govt is going back to 15%-is a simple thing to think- does not need big brains:

One aspect will be UFBU to take greater credit of "CLINCHING" 17% already achieved.

Other justifiable stand will be that the climbing down to and agreeing to 15%-17% from the original charter of demand for 40% hike, gives reasonable ground of reducing the offer that too with the absence of Left parties in the government- it is altogether a different issue that they(LEFT) never did any benificial role for the working class.

I, personally feel that Govt may even come down to previous bipartite settlement

Danendra said...

Through this open letter I would like to submit following points before the responsible authorities so that real position of banks precipitate and required regulatory measures may be taken to prevent further deterioration in situation in banks and preventive steps are immediately taken to safeguard the interest of depositors as also that of human resources victimized by greedy executives in banks and dishonest ministers in Government of India.

I would like to know the total amount of loan waiver and sacrifices made by public sector banks during last three financial years including that of agricultural debt relief allowed by central government.

I would like to know the total advance as on 31.03.2006 of total Public sector banks , credit made during last three years and NPA added during last three years , total NPA as on 31.03.2006 and that on 31.03.2009 and out of which NPA accounts pertaining to period before 31.03.2006. This enables us to know what percentage of advances outstanding as on 31.03.2006 is real NPA. Here it is assumed that there will be hardly any addition of Borrowers in the list of NPA who have been financed during last three years. Banks claim that their gross NPA is hardly 2% and hence borrowers are in general honest and to the point in respecting banking needs of repayment and turnover.

Based on real amount of NPA out of advances made by banks upto 31.03.2006 it will be possible for government of India to ascertain the real trend of NPA in Banks in India compared to that of foreign banks, especially USA banks where more that fifty top banks have gone bankrupt during last one year. It will be possible to know the truth only when government will take into account total amount of loan amount waived and compromised during last years .This will expose the real trend of waiver and recovery culture prevalent in banks as also reflect the ineffectiveness of government machinery to recover the dues from willful defaulters.

Can anyone give the certificate from RBI or Government of India that banks are honestly classifying bad assets as bad assets and making correct provision for the same? Or all regulators solely believe on Chartered Accountants and you wait till exposure of CA takes place as happened in the case of Satyam Computers.

Can anyone verify the genuineness of NPA figure of top five or six PSBs and that of SBI to ascertain the real story of banks so that Indian banks do not face erosion of capital as has happened in more than top fifty banks of USA, and many banks of other developed countries.

Is it not the bitter truth that top executives in banks are yes-men of Ministry and top politicians and they in turn have inculcated flattery culture in their respective banks?

Flattery gives rise to corrupt practices and window dressing of figures to please bosses and also empowers top bosses to discard honest and true officers. Banks bosses have enough power to post and promote officers as per their whims and fancies. they have tool in their hands to sideline those officers who tell the truth. Interview panel have the power to reject officers in promotion process specially those who not keep the executive happy. Officers who are not true flatterers are sidelined to rural areas in the name of policy of rural posting framed under directive of government of India. Is anyone sure that there is healthy practice in promotion and posting processes in banks as also in adherence in prudential norms of classification of assets and income recognition.

If most of the top executives in banks as also top officials in banking division of Ministry of Finance including Finance Minister are birds of the same feather, who will bell the cat is a million dollar question?

Danendra Jain
21st June 2009

senthilkumar said...

useless talk and useless decision.
i think IBA/Govt is in a mentality that the bank people don't have that much work to hike their wage even 20%.
what a shame.
absolutely unjusticable decision.
for govt employees it 40% or even more but for bankers not even 20%.
for the 20% also they have to beg beg and beg.
don't the authorities think about it?
everytime we have to fight?
no one in the authorities discuss about the deprived people(banker).

ADITYA said...

Now UFBU is not having a leader won through ballot but by terrorising the employees on the ground of transfer. You fool leaders in the name of second option pension have finished the spirit of wage negotiation. Now it is high time to step down and allow some spirited & brave persons to start negotiation afresh, if you have conscience. How dare the IBA to quote 15% to banking employees, it is time to go on indefinite strike to achieve not less than 40% increase besides pension demand. Thanking you.

Santosh said...


ashishduttachowdhury said...

When Unions are negotiating for pension for all (second option) they have forgotten about the pitiable condition of those who are retired and on pension roll of different Banks. It is irony that if negotiators do not raise voice today they will be depriving newly pension optees too in the years to come. Leaders, please set at least sample example for asking some relief to the today's pensioners. Had not been it is a bipartite settlement indivisual pensioners could have represented their state of woes.

AKA said...

Sir,I request Leaders of Bank UNIONS to regain self confidence and negotiate with hardened negotiators of Govt Machinery with all possible techniques of Negotiating Power such as surprises, pressure of indefinite strike call,media blitz,supportive data( wage hike by Pay Commission)etc. The victory will be ours.AKA

Mitul said...

It appears that,both IBA and UFBU are playing a such game with the BANK EMPLOYEES,Few leaders ofthe UFBU miht be getting some Ecceptional benefits from IBA and GOVT.side to make the deal in the favour of GOVERNMENT,as it can be easily be judged that there is no morality left with the UFBU and IBA as they even dont feel shame to offer such a tiny revision to the sector on which they show to be proude of as INDIAN BANKING INDUSTRY IS THE BEST PERFORMING BANKING INDUSTRY IN THE WORLD,but they dont want to give credit to the PERFORMERS who made it the BEST...

vikas said...

This is really shame! All are given thier sahre of pie but Bankers are denied even 20% hike . Keeping in view the nature of job and working hours of Banking job the Govt. should have hiked the salaries but unnecceraily the issue is bieng dragged. The sense of frustration is building up among the employees which will deginatly come up in coming days.

stephen shyam said...

I think one should't blame the government for their firm stand. Let's blame it on our union leaders who definetely lack leadership qualities and latest negotiating skills. I strongly feel these so called union leaders should outsource these negotiating deals with sufficiently educated and qualified people, who could draw a charter of demands as per the latest trends and also negotiate for the employees with the IBA & govt. We definetely have to understand that the lack of knowledge and skill of our union leaders are going to cost us and our families dearly. But at last and not the least its we the employees of the bank who have made these union leaders with our memberships. Alas, we pay subscriptions for getting s------d.

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