Monday, January 19, 2015

Are bank unions playing with employees ?

What is the outcome of 2 years of negotiations ? 

It is zero.

Negotiations for salary revision started more than 26 months back in October,2012 with the submission of charter of demands to Indian Banks Association(IBA)by various bank unions. Initially bank unions were demanding lot of other things along with 30-35% increase in salary component.Some of the demands were increase in salary component upto 35%, introduction of grade pay like central government,HRA according to 6th pay commission,Increase in PF up to 12% of pay, Auto merger of DA after a period, 5 days working, fixed working hours,increase in Casual Leave upto 18 days per year,Encashment of PL up to 300 days, Paternity leave for fathers like government employees and increase in present maternity leave up to 1 year per term, Improvement in LFC,Medical benefits etc.

Now what is the status of all those demands ? What is the progress in 26 months ? There were no discussions on any of the demands except salary component which itself has now came down from 35% to 19% only.In these 2 years IBA only improved their offer once and that too in January,2015 only. More shameful is that increase in offer was only 1.5% ( from 11% to 12.5%).Only in January,2015 few sub-committees were formed to first time study few other demands. So actually total positive outcome of 24 months is ZERO. 

Can this progress of bank unions be Justified ? Why they are doing so ?

Govt. clerks will get more than bank officers

Bank unions are Insulting Bankers

While representatives of bank employees are begging like helpless and unwanted entities for only about 19% increase in salary, on the other side central government employees are about to get 3-4 times hike in their salary next year.Let come January,2016 and the 7th pay commission for central government employees will be implemented.If all the assumptions and calculations become reality the central government employees may get about 4 times of their current salary.

central government clerk in current payband of 5200-20200 with grade pay of 1800, who is getting Rs 7000/- as basic as of now will start getting about Rs 30000/- (or  21000/- if 3 only times increase) as basic after the implementation of the pay commission.Increase of 3 times can be easily assumed by studying the trend of past pay commissions.It can be easily compared with the expected salary of bank officers after the ongoing revision process.Presently JMGS-I officer in banks is getting Rs 14500/- as basic salary, if we suppose to merge 60% DA in it and 15% increase in salary, the new basic will be about Rs 27000.So according to this scenario  salary of central government clerk will be more than an officer of bank.( If CG employees get 4 times hike in salary) 

Projected pay structure for 7th pay commission
Source -

All central government departments will get the same hike may be they in profit or loss.There will be no discrimination on the basis of more earning or less earning or non-earning departments.Government will issue funds from its treasury to foot the expenditure of the wage revision.But in the case of banks which themselves are earning their salary, situation is totally different. They are earning profits and paying salaries from their own funds even then they have to beg to government.

A simple comparison between the salaries of central government employees and bank employees clearly shows how poorly they are paid.

Source -

Arguments for inability to pay high salary

Main argument by the IBA is that all banks are different entities with different size. It will not be possible for the smaller banks to arrange for the funds if hike is more. Another argument is that increase in provision for salary will negatively impact the balance sheet of the banks and they being publicly listed companies are also responsible for the shareholder's interests.

What can be done ?

Both of above arguments appear convincing but there may be alternate paths. If government wishes it can easily clear the path for higher salaries in the line of central pay commissions.  All the banks can be treated like various departments of central government and salaries can be arranged by government.A collective fund can be set by government or provision in budget can be made for this. If interests of shareholders are to be considered, the point to be noted is that major shareholder of public sector banks is government and it receives large portion of profit of banks.There are several other government owned companies which are listed entities and are constantly making huge losses but even then they are getting the benefits of pay commissions, than why not the banks that are making profits and paying salaries from their own funds, can get proper hike in salaries ?  

But why will government do anything like this ? No changes are made ever in existing system without any severe pressure. So who will force government to do something like this or any other alternative ? Anything can be done, only proper pressure is required but here the so called unions appear to be completely toothless.

Will bank unions think and act seriously and fearlessly ?

Also Read -

Jan Gan Man is Symbol of Slavery

Projected & Past pay scales for central pay commissions.

Projected salary for bankers

Govt. employees salary to increase 4 times

Charter of demands -1

Charter of demands -2

Salary comparison of bankers and govt. employees 


  1. The unions are playing their members against retirees. The pension a top executive who retired fifteen years back is far less than a peon who retires today would get. Would you like to comment on that?

    1. This is also serious issue and we need to take care of this too if we want our better future.There is need for one rank one pension like system which is long pending demand of Armed force personals.

      We need to do something for this and proper system needs to be in place because later we will also have to same issues if not addressed today.

  2. Nice blog and very informative I would like to say something here this type of blog very helpful for us because it has lots of important points of information.
    Thank you for sharing us.
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