In a big boost to over 8 lakh employees in the public, private and foreign banking sector, the Indian Banks' Association has officially signed the 11th Bipartite Settlement under which these employees would get around 15 per cent wage hike for the period starting 2017-22. The bank unions had demanded a 20 per cent hike, while IBA had initially offered a 12.25 per cent hike for the employees. After a series of discussions, the final annual hike of 15 per cent was announced.
The current hike in salaries would lead to an increase of about Rs 7,898 crore in the wage bill of the banking industry. The memorandum regarding the hike in salaries was signed between banks and several banking unions over three months back in July.
The ceiling on pension has also been removed. As per the new agreements, the family of the deceased bank employee would now get Rs 30,000 as pension compared to Rs 11,000 earlier.
The new proposals also list out giving out annual performance-linked incentives to the bank employees, depending on their bank's performance. This PLI scheme will be applicable over and above the salary.
As per the new guidelines, employees of the banks making 15 per cent annual operating profit will get 15 days' worth salary. Similarly, employees of the banks making an operating profit of 10-15 per cent would get 10 days' worth payment.
The revision in salaries happens after every five years. Banking sector unions and IBA hold discussions on the salary hike, following which the hike is announced for the employees. The IBA had also announced the salary hike worth 15 per cent for the bank employees in 2012.