Bank Workers' Unity

வங்கி ஊழியர்கள் ஒற்றுமை

What next after MoU of 12th Bipartite Settlement?

December 9, 2023

Bank Workers Unity

Gautham

On 7th December midnight, the MoU (Memorandum of Understanding) of 12th Bipartite Settlement was signed between IBA (Indian Banks Association) and UFBU (United Forum of Bank Unions) with 8 Unions together and AIBOA separately. The details of the MoU have been given separately.

Some of the significant aspects of this MoU:

For the first time, the MoU has been signed within 14 months of expiry of the previous (11th) Bipartite Settlement and without any agitation. Normally the gap used to be around 24 months and above.

Further the MoU could be reached in the fifth round of the discussions which commenced in July 2023. In between there have been many sub-committee and small committee meetings on other financial demands, service conditions including disciplinary matters. Whereas the MoU for the 11th Bipartite Settlement could be reached only after 44 rounds of discussions.

While the initial offer in the previous two Bipartite Settlements ranged between 0% and 2%, this time the initial offer itself was 15% hike in the Pay slip component.

While the 11th Bipartite Settlement was clinched with 15% increase in the Pay slip component, this MoU provides 17% increase in the Pay slip component amounting to Rs.12449 crores.

This MoU provides for monthly ex-gratia for the pensioners and the family pensioners.

Offer of IBA was conditional

While there has been some positive aspects as mentioned above, IBA was very adamant and negative in not settling many of the core demands of the Unions and Associations.  Many of the important demands that have been raised even during the 11th Bipartite Settlement still remain unsettled in this MoU. The offer of the IBA was conditional. 

While the Unions and Associations chose to arrive at this MoU, the concluding remark of com. Rupam Roy, General Secretary of AIBOC is significant.

“Though I am not totally happy, with my expectations to take care of the issues of the officers, particularly on load (we wanted more) but when we come as UFBU and when we have our retired officers (IBA is thinking to improve their benefits), despite disappointed personally, taking everything into account, we as a team of UFBU, we have no option but to accept it (MoU) with a positive frame of mind that in the further negotiations the issues will be taken in the right spirit so that the aspirations are met”.  

It is clear that this MoU is mixed with certain positive features and at the same time not addressing many of the core issues raised by the Unions and Associations. Hence the leaders of UFBU have to ponder over the expectations of the bank employees and officers and try to clinch them before signing the final settlement which is slated to be done within 180 days from the date of MoU.

The primary demand of all the Unions and Associations of merging Special Allowance along with Dearness Allowance with the Basic Pay has to be clinched. Otherwise, the Special Allowance which is now at 16.4% of the Basic Pay is likely to swell to around 25% and will not be eligible for calculation of any of the superannuation benefits and interest of the retirees during the 10th, 11th and 12th Bipartite Settlements would be severely injured.

Notwithstanding the above primary demand, loading of 3% is too low.

The loading during the 10th Bipartite was 2%, 11th Bipartite was 2.5%.

Hardly 0.5% improvement could be made visa-vis 11th Bipartite Settlement. This is really disappointing. A serious endeavour has to be made to increase the loading substantially (while signing the final settlement) so that there is no room for increasing the Special Allowance from the present 16.4%.

The merger point has to be increased to 8576 instead of 8088. There will not be any additional cost (Not even a rupee) due to this. But the future loss of DA can be averted as happened during the 11th Bipartite Settlement (For Bank Employees it was 0.07%, for Insurance employees it was 0.08%).

“5 days banking” has been one of the important demands of the Unions and Associations for nearly a decade. A firm commitment from the IBA/Government with regard to implementation of this main demand is absent in the MoU. The reply in the Parliament is evasive. While employees and officers of the General Insurance and Reserve Bank have been enjoying 5 days working for so many years, the Life Insurance Corporation has also switched over to 5 days working since April 2021.  This core issue has to be implemented before signing the final settlement.

Another core demand is updation of pension. It is highly disappointing that there is no commitment from IBA on this demand. This was one of the contentious demands raised by Unions and Associations for quite a few years. As this was not clinched during the 11th Bipartite Settlement, minutes were exchanged between IBA and the Unions and Associations in which this was one of the major demands. In the meantime, Reserve Bank employees and officers got updation of pension twice. Even actuarial calculations were not made with regard to the cost of updation of pension and it is not mentioned in the MoU when the issue is likely to be clinched. In the MoU, only the demand of the Unions/Associations for updation of pension for all retirees is recognized. Beyond that, there is no improvement. While this MoU provides ex-gratia as an interim relief, the core demand of updation of pension has to be clinched before the final settlement.

The other demands like full pension on completion of 20 years of service, last month’s pay or average of last 10 months’ pay whichever is higher for calculation of pension, commutation upto 40%, restoration of commuted amount after 10 years instead of the present 15 years also do not find place in the MoU.  These issues also need to be clinched while signing the final settlement.

Another important demand of the Unions and Associations has been “the scrapping of National Pension Scheme (NPS) and bringing all those covered under NPS to the Defined Benefit Old Pension Scheme”. The young bank employees and officers who joined the industry after 1st April 2010 and on whom the NPS has been thrust are very eager to come out of this scheme as there is no defined benefit in this. Five State Governments have already gone for this Old Pension Scheme scrapping NPS for their employees. Many more State Governments are likely to follow. Even BMS, the Trade Union owing allegiance to the ruling BJP has demanded scrapping of NPS.  Several thousands of employees have conducted massive dharna in New Delhi in the recent past on more than one occasion demanding scrapping of NPS. This demand has to be clinched at the time of the final settlement.

In the service conditions, disciplinary matters etc. many more improvements are needed which have been rightly raised by the Unions and Associations. And those issues have also to be clinched at the time of final settlement.

Genuine demands to be settled.

It is to be noted that in the last 5 years (2018-19 to 2022-23) the amount written off by the Scheduled Commercial Banks amount to Rs.10,57,236 crores. If there is a change in the corporate lending policy and if stringent laws are enacted, it is possible to recover overwhelming majority of the written off amount from the corporates. And if 2% of this written off amount amounting to Rs.21146 crores is allotted for the wage increase of the employees and officers, all the aspirations of the employees and officers can be met.

If IBA/Govt. does not come forward to settle the genuine demands of the employees and officers, they are very much ready to go on struggle to clinch the same.  The retirees are ready to extend their solidarity and support.  Taking the whole situation into consideration, right decision has to be taken by UFBU.