Text of the Memorandum given to Finance Minister!

BANK EMLOYEES FEDERATION OF INDIA (BEFI)

Circular No: 18/2014	27th,June2014
To All Affiliates/Office Bearers/CC/GC Members

A nine member delegation representing all the constituents of UFBU met Shri Arun Jaitley, Hon’ble Finance Minister, Government of India, today in New Delhi and submitted a Memorandum on wage revision (text appended). On hearing the views of UFBU for an expeditious wage settlement, the Minister said that he would call for detail report on the developments of wage talks with IBA from the Departmental Secretary and give suitable advice in the matter.

With greetings,

Text of the Memorandum

“Respected Sir,

We submit, for your kind perusal and information, the present position with regard to the negotiations between the Indian Banks’ Association (IBA) and United Forum of Bank Unions (UFBU) on the revision of wages and service conditions of Bank employees/officers.

United Forum of Bank Unions (UFBU) is the umbrella forum of 5 workmen unions and 4 officers’ associations in the Banking Industry covering 1 million workmen and officers and is currently on wage negotiations with Indian Banks’ Association (IBA). The wages and service conditions in the Banking Sector are governed by the Industry-level Bipartite Settlements signed between the IBA and the Negotiating Unions/Associations of Bank employees/ officers. The term of the last settlement (9^th bipartite agreement) came to an end on 31.10.2012 and the revision of wages and other service conditions has become due since 01.11.2012.

UFBU has submitted its Charter of Demands to IBA on 30.10.2012 before expiry of the previous Bipartite Settlement and requested IBA to adopt a time-bound programme to hold the negotiations on the demands and to expedite the settlement as early as possible. More than 10 rounds of discussions have taken place between IBA and UFBU so far on the issue but IBA is delaying the settlement. Despite a lapse of 20 months since starting of negotiations, no significant improvement is made towards expeditious conclusion of settlement. Moreover, IBA is offering the least increase quoting non-affordability of banks in paying higher wages partly because of increase in Non-Performing Assets (NPAs).

 We furnish hereunder our view-points in support of our just demands for a respectable wage revision to all employees/officers in the banking industry:

1. PERFORMANCE OF PUBLIC SECTOR BANKS:

In Public Sector Banks, the profitability, Business per employee and Profit per employee are on the increasing trend only, which is also the basic yardstick for measuring the affordability of banks for increase in wages. The data relating to public sector banks as on March 2012 vis-à-vis the position as on March 2007 is furnished below for your kind reference:

PERFORMANCE OF PUBLIC SECTOR BANKS

S.No.	Particulars	As on	As on
		March 2007	March 2012
01	Number of Branches	49,573	67,930
02	Total Business	Rs.33 lac Crs.	Rs.85 lac Crs.
03	Operating Profit	Rs.42,655 Crs.	Rs.1,16,335 Crs.
04	Business per Employee	Rs.7.55 Crs.	Rs.15.01 Crs.
05	Profit per Employee	Rs.4.57 Crs.	Rs.8.42 Crs.

It is evident from the above statistical data that the performance of Public Sector Banks is impressive and continuously on the increase. Whereas the bank employees are not compensated with adequate remuneration in relation to the types of jobs performed and the risks involved thereat.

Our demand for respectable revision of wages considering the due share in the prosperity of the banks on account of increasing profits is just and reasonable. The erosion in profits is mainly due to apportioning of huge amount of profits towards provisions and write-offs of bad loans, which cannot be attributed as a reason for denying our just legitimate demand. The brief details of such provisions and write-offs of bad loans in the last years are furnished hereunder:

				(Rs.inCrores)
Year	Gross	Provisions made	Bad Loans	Net Profit
	Operating	for Bad Loans (Rs.)	Written-off (Rs.)	(Rs.)
	Profits (Rs.)
2008-09	66,972	11,121	6,966	34,392
2009-10	76,861	18,036	11,185	39,257
2010-11	99,981	29,830	17,794	44,901
2011-12	1,16,335	38,177	15,551	49,514
2012-13	1,21,943	43,102	27,013	50,583

2. OTHER FACTORS JUSTIFYING OUR DEMAND FOR INCREASED WAGES:

 *  The spiraling rate of inflation has made the life of bank employees miserable and also eroded the value of their earnings;

 ^*   The wages should go well with the present standard of living, which has undergone a remarkable change with increase in basic requirements;

 ^*  Due to the increase in attrition rate, more number of employees needs to be recruited and reasonable wages need to be offered to retain them inasmuch as, the other comparable sectors offer more to their employees. This would not only encourage and motivate the employees but also would ensure perfect growth of the institution.

3. WAGES IN OTHER COMPARABLE SECTORS:

The wages of employees settled recently in other comparable public sector organisations and Government are indicated hereunder:

01	Coal India Ltd.	25% increase in Gross Wages
02	Steel Authority of India Ltd.	16% increase in basic and D.A
	(SAIL)	Plus 6% increase in Perks
	Indication by the previous
03	Government to 7th Pay	30 – 35% salary hike
	Commission
		The interim relief provided by various State
04	Interim Relief	Governments and other public bodies ranges
		between 25% and 30%

 It  may  not  be  out  of  place  to  mention  here  the  observations  of  the  Tribunal  headed  by  ShriPanchapagesa Sastry, popularly known as ‘Sastry Award’ that the Bank employees and officers deal with huge amount of public money, hence it is all the more necessary to compensate them with adequate salary and allowances so that they are contended and do not succumb to the temptations that often come in their way, oftener than in most other industries. 

Historically, bank employees and officers were paid higher salary than the Government employees and officers of comparable levels due to various factors like accountability, transferability, responsibility and role-sensitivity. 

However, subsequent Pay Commissions have given a go by to the concept of pay parity and the salary of bank employees and officers has come down substantially when compared to their peers in the country particularly after implementation of Sixth Pay Commission and consequent salary revisions in other public sector undertakings. Presently, the bank employees and officers are far below their peers in respect of Salary and Allowances.

The percentage increase in the last wage revision, i.e., 9^th Bipartite Settlement, for bank employees/officers was capped at 17.5% on total cost, though the revision in other public sector undertakings was in the range of 23-25%, because of additional cost on account of one more option to pension. 

The spiraling cost of living and the high rate of inflation in the last years made the life of common man miserable. As against the reasonable demand of 25% increase in the pay slip components, the IBA has offered a very meager 11% increase in pay slip components.

Banks also have affordability for a respectable wage revision due to the increasing trend in the profitability of all banks and also considering the fact that the cost of wage bill would slide down due to3reduction of staff strength on account of huge retirements. The scheduled retirements of around 15% of employees during the 5-year settlement period would automatically reduce the wage bill expenses even if replaced by recruitment.

Perquisite Tax:

We also bring to your kind notice another issue confronting the bank employees and officers i.e., Tax on Perquisites. The concessionary rate of interest loans, which are available to bank employees and officers, such as Housing Loans, Car Loans, Two Wheeler Loans, etc., and the facilities provided viz., housing accommodation, furniture & fixtures, reimbursement of expenses incurred on conveyance and maintenance, etc. come under the purview of Perquisite Tax and the employees in the Bank are taxed accordingly, whereas the employees and officers in Government Departments do not come under the purview of Perquisite Tax and this anomaly needs to be redressed.

With due consideration of merits on our submission as above, we humbly seek your kind intervention in the matter so that IBA can be suitably advised to ensure respectable revision of wages to all bank employees and officers by also considering the risk and responsibilities and also stress involved in their functioning in the highly competitive environment, which is prevalent now.

We profusely thank you for providing us this opportunity to interact with your goodself and enabling us to submit our view points. We trust that our just demands will merit due consideration and we hope that the bank employees and officers would achieve respectable wage revision with your kind intervention.

The other issues confronting the bank employees and officers include the recent retrograde recommendations of P J Nayak Committee championing the cause of private players, wiping out the public sector character of the nationalized banks in the Country, the financial reform measures that are detrimental to the interests of the general public and the Nation on the whole. We shall be highly obliged if we are permitted to present our views on these issues separately with due consideration before contemplating any change.

Thanking you in anticipation,

With best regards.” 

Yours sincerely,

sd/...... by all unions in UFBU