PSU banks push govt for performance-linked pay

Pushing for greater freedom in deciding pay packages, public sector banks have suggested that they be permitted to offer performance-linked salaries to officers. For starters, the banks have said that such incentives should be given to the higher-level officers to attract talent from outside the industry.

In their recent meeting with finance minister, Pranab Mukherjee, public sector bank chiefs have pointed out that the rising differential between salaries in public sector and private sector banks is resulting in them being unable to higher specialised talent in areas such as risk management and treasury operations.


“We have told that banks should be allowed to pay appropriate salaries based on the skills of the person. There is a vacuum building at the top levels since we are unable to attract the best talents available,” the chairman of a PSU bank said on conditions of anonymity.

According to official sources, the FM had backed the proposal and said that competition has to be kept in mind while arriving at appropriate packages.

When contacted, representatives of the largest bank officers’ association and employees’ unions said that they might not stand in the way of such a proposal should it be restricted to offering higher packages to attract and retain specialised talent. Moreover, such offers should also be standardised across the government-owned banks.

At present, the salary structures in banks are decided through a bipartite agreement between the IBA and the unions. Bankers said that the recent wage hike through the 9th bipartite settlement signed in April has not helped in resolving the differential in remuneration.

The present basic salary slab of officer’s in the scale-3 bracket (designated as chief officer or senior managers in the various banks) has been set between Rs 25,700-35,100, for scale-4 (chief manager) it stands at Rs 30,600-Rs 36,200. At the upper end at scale-7 (general managers), the basic salary is Rs 46,800-Rs 52,000.

There are around 257,000 officers in public sector banks, including 20,000 officers of scale-4 and above. The total employee strength in public sector banks is around 750,000.

GD Nadaf, general secretary, All India Bank officers’ Confederation said that he was not against higher perquisites to specialised officials. “We can give something more in the form of perks. However, the basic scales as has been arrived at in the settlement should not be tampered with,” he added.

CH Venkatachalam, general secretary, All India Bank Employees’ Association felt that higher incentives should be given in a transparent manner. “They (the bank managements) can consider paying more if a particular job with specialised talent requires that. However, even that should be uniform across PSU banks. The extra remuneration should be the same for the same kind of job across banks. It should be transparent and cannot be an arbitrary decision,” he said.
Source : Financial Chronicle.