The finance ministry has asked the heads of public sector banks (PSBs) to finalise the modalities for timely implementation of the next pay revision from November.
There are 21 PSBs, post merger of six lenders with State Bank of India (SBI), in the country. They together employ about 8 lakh people.
In a communication to chief executive officers (CEOs) and managing directors (MDs) of the state-owned banks, the ministry advised them to initiate the steps for smooth conclusion of next wage revision of the employee within the time-frame.
"However, it is seen that several banks are yet to proceed in the matter," it said, requesting the PSBs to "look into the matter and conclude the next wage revision prior to the effective date of November 1, 2017".
The wage revision of public sector bank employees takes place every five year. The last revision was effected in November 2012. In the last wage negotiation between PSU banks employee unions and bank management, Indian Banks' Association (IBA) had settled at 15 per cent hike.
Recently, Banks Board Bureau (BBB) Chief Vinod Rai had made a case that the compensation package across the board of public sector banks needs to be improved.
"Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package," he had said.
Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.