Creating Opinion for 12th BPS without PENSION UPDATION? 

Wage hike decision for PSB staff likely by mid-December

(According to a source in the finance ministry, the wage revision and change in work days will also be applicable to regional rural banks.) 

Piyush Shukla

November 28, 2023

Employees at public sector banks (PSBs) may see a 15%-20% hike in salaries and implementation of a five-day work week by the middle of December as the 12th bipartite settlement talks between bank unions and associations and the Indian Banks’ Association (IBA) have entered the final stage, four people aware of the development told FE.

“This is the first time in the history of negotiations that the offer (for wage hike) is starting with 15%. It (wage hike) will likely be between 15% and 20%,” sources at the IBA said. They added that the announcement of the five-day work week will either be made along with the wage hike notification or immediately after that by the Centre or the IBA.

The current wage agreement for PSB employees expired on November 1, 2022. The IBA and the unions representing bank employees have been negotiating a new wage agreement since then.

According to a source in the finance ministry, the wage revision and change in work days will also be applicable to regional rural banks.

In July 2020, around 850,000 bank employees got a 15% increase in their salary packages, with the IBA and the United Forum of Bank Unions signing a memorandum of understanding to settle the three-year-long contentious issue of wage revision.

Another source who is part of the negotiation process said the IBA and the bank unions will soon have a final meeting where the two parties will sign a memorandum of understanding, which will subsequently be sent to the finance ministry for the final approval.

“The salary hike will be somewhere above 15%. We are negotiating hard as the PSU banks have to take a final hit on the balance sheets,” sources said. The finance ministry initially asked public sector lenders to complete negotiations by December 1.

The implementation of the five-day work week will lead to branches remaining closed on weekends. To compensate for lost working hours, employees may be required to work for extended hours during week days, the first source quoted above said.

“Business hours will start early on weekdays and close 30-45 minutes late than the current working hours,” they said. Customers who wish to withdraw or transfer cash could do so from automated teller machines, and the only challenge will come with regard to deposit of cheques.

“Collection of cheques will be affected for these two days. I think we should be ready for that as it does not make major difference and usage of cheques is increasingly getting reduced as people are opting for digital banking services,” one source said.

With employees at insurance companies and certain state governments and the central government having a five-day work week, providing the same option to bankers is a move in the right direction, sources said.

The closure of branches would also result in savings in terms of fuel used for travel and electricity. “The discomfort to customers is more than outweighed by savings and other factors. Employees also need more family time,” they said.