Consensus Built On 17% Salary Hike For Bank Employees, 5-Day Work Week Decision Awaited; Check Details Here

After a long wait, the Indian Banks Association (IBA) and other bank unions have finally built a consensus on wage revision and agreed to an increase of 17% in salaries annually for five years beginning fiscal 2021-22, according to a statement issued on December 7.The wage revision will be effective from 1.11.2022 for a period of five years.

On Thursday, a Memorandum of Understanding (MoU) was signed between the Indian Banks' Association representing the Management of Banks that are parties to the Bipartite Settlement and United Forum of Bank Unions, other Unions, and Associations on the basis of discussions held on 7th December 2023 on wage revision. As per the MoU, an annual increase in salary and allowances is agreed at 17 %, of the annual pay slip expenses for FY 2021-22, which works out to Rs. 12,449 crores for all public sector banks including SBI.

Though public sector bank employees have got a hike in salary, however, it is yet not certain if their demand for 5-day work will get heard. It is worth mentioning that the unions have been demanding that all Saturdays should be announced public holidays for banks before they sign the wage agreement.

Thus, the unions will only sign the final agreement when the five-day workweek decision is announced. The annual increase in salary and allowances of bank employees will be at 17% of annual pay slip expenses for FY22, amounting to roughly Rs 12,449 crore for all public sector banks, including State Bank of India (SBI).

According to the MoU, "The new pay scales will be constructed after merging Dearness Allowance corresponding to 8088 points (average Index point as applicable for the Quarter of July, August and September 2021) to the basic pay as on 31.10.2022, and adding thereon a loading of 3 %, amounting to Rs 1795 crore."

Meanwhile, the distribution of annual wage hikes to the bank employees will be worked out separately and proportionately depending on the break-up of establishment expenses for FY22.

"The parties will meet on mutually convenient dates to draw out a detailed Bipartite Settlement/Joint Note on the various issues on which consensus positions are reached. The parties will endeavor to finalize the Bipartite Settlement /Joint Note within a period of 180 days from the date of this minutes," stated the MoU.

IBA has already recommended to the Government for declaration of all Saturdays as holidays under the NI Act for the Banking industry in line with earlier negotiations with unions /associations and the same will be pursued. The unions/associations urged for the implementation of the same before signing the final bipartite agreement/ joint note.