The Indian Banks’ Association and workers’ unions agreed to increase the salaries of employees in public sector banks by 17%, amounting to Rs 12,449 crore. This decision will benefit about nine lakh employees, including 3.8 lakh officers, in PSU banks like SBI and some older private banks. The agreement was reached after talks on December 7, 2023, and a Memorandum of Understanding (MoU) was signed. The final details of the salary increase will be worked out within the next 180 days. The parties will meet to discuss and agree on various issues, aiming to finalize the agreement within this timeframe.
The wage revision will take effect from November 1, 2022. Although public sector bank employees have received a salary hike, it’s uncertain if their request for a 5-day work week will be accepted.
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The IBA has already suggested to the government to declare all Saturdays as holidays for the banking industry under the NI Act, as discussed in previous negotiations with unions/associations. The unions/associations are pushing for the implementation of this recommendation before signing the final agreement.
The new pay rates will start from November 1, 2022, and last for five years.
According to the deal, there will be a 17% increase in salary and allowances, totaling Rs 12,449 crore for all public sector banks, including the State Bank of India.
To calculate the new pay, the Dearness Allowance points up to 8088 will be combined with the basic pay as of October 31, 2022. Also, an additional 3% will be added, amounting to Rs 1795 crore.
The annual wage increase for workers and officers will be decided separately based on the breakup of expenses in the fiscal year 2021-22.
The discussion about updating pensions for retirees is ongoing, but a one-time ex-gratia amount is agreed upon for pensioners and family pensioners who were receiving pension as of October 31, 2022.
The applicability of this ex-gratia for retirees of the current settlement period will be discussed later. It’s important to note that this amount won’t be affected by other allowances.
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