The government’s 15% wage hike for public sector bankers will just add ₹1,100 to their salary

The government’s 15% wage hike for public sector bankers will just add ₹1,100 to their salary
The government’s 15% wage hike for public sector bank employees is only a ₹1,100 increase in real lifeBCCL
  • A 15% wage hike for public sector bank employees will only result in a ₹1,100 increase in actual salary.
  • Most of the increase in basic pay is what employees’ are already receiving as a part of their dearness allowance.
  • In a letter to members, general secretary of AINBOF and AIBOC unions GB Manimaran makes the case of keeping non-financial negotiations separate from salary negotiations.
Public sector bank employees have been fighting for a wage hike that has been due since 2017. However, negotiations are still ongoing and the increase in salary of 15% isn’t as large as it seems.

In an appeal to negotiators and members, GB Manimaran — the general secretary of the Canara Bank Officers’ Association AINBOF and AIBOC — point out the proposed wage revision only means an increase of ₹900 to ₹1,100 in takehome salary.

“Such an increase in salary would put bank officers in much lower scale compared to the Grade A officers of the Central Government or any public sector undertaking,” he said in his 20-page letter, seen by Business Insider.
The government’s 15% wage hike for public sector bankers will just add ₹1,100 to their salary
The real increase in wages for bank employees will only be around Rs 900 to Rs 1100General secretary of the Canara Bank Officers’ Association ​GV Manimaran's appeal to negotiators, officer bearers and members/BI India

Even though basic pay will increase by 15% on paper, most of it will go into what bankers are already earning as a dearness allowance, since it comes with 2% load in basic pay.

Earlier this month, public sector bank employees called off the three-day strike that would have led to banks shutting down for six days when the Indian Bankers’ Association (IBA) revised the wage hike from 12.5% to 15%. The unions’ original demand was for 20%.


The case for keeping salary negotiations separate
Manimaran appeals that non-financial issues should not be a part of salary negotiations since they can affect the unions’ bargaining power.

“If we are made to sacrifice on the financial part to achieve the demand of 5-day banking — it does not spell success in achieving our demand,” he wrote.

Similarly, the value of being able to encash five days of leave and family pensions also distract from the issues, according to Manimaran. The government’s attempt to link performance to wages also has its pitfalls since a lot of factors that are out of the control of employees, as per the letter viewed by them.

The opportunity cost of compromising on wage hike
The terms of wage hike negotiations between the government and public sector bank employees don’t meet all the core demands of the banking unions.

According to Manimaran, the wage hike doesn’t adhere to the mini minimum wages principles — set forth by the International Labour Organisation (ILO) — which were adopted by the central government when it implemented the 7th central pay commission.

The terms also don’t account for a running pay scale without any stagnation. This means that the next time bankers want an increase in salary, they will have to go through another round of negotiations — which takes time. The current negotiations have been going since November 2017 for the last three years.

In a case filed by an employee of Canara Bank, the Madurai High Court told the central government to give the IBA directions on how to negotiate with the bankers. No formula has been presented by the government to date.

Meanwhile, the IBA submitted a counter-petition to the High Court saying that it’s not a statutory body. So, as per law, it has no power to agree or enter into an agreement with the trade unions on wage revision.

Despite these claims, the IBA is scheduled to sit down with the unions today, March 16, to discuss the revision of pensions for banking employees.

See also:
Three years and five strikes later, wage revision for public sector bank employees at par with 2012