Wage Pact: Will Bankers Make More Money?

Postings to places at an altitude above 1,000 metres but less than 1,500 metres, between 1,500 and 3,000 metres, and above 3,000 metres entail different rates of allowances -- the higher the location, the bigger the allowance, reveals Tamal Bandyopadhyay.

The Indian Banks' Association (IBA), the premier bankers' body, and the officers associations of banks and workmen employees' unions have signed an agreement for a 17 per cent increase in salary revision.

This translates into an outgo of Rs 12,589 crore (Rs 125.89 billion) for 12 public sector banks (PSBs), including the State Bank of India.

The wage break-up for officers and workmen is Rs 8,424 crore (Rs 84.24 billion) and Rs 4,165 crore (Rs 41.65 billion), respectively.

Besides 12 PSBs, 10 private sector banks and three foreign banks are covered by the 12th bipartite wage agreement, which is meant for five years, beginning November 2022.

Of course, the agreement does not apply to all the officers of 10 private banks. They are covered by this agreement up to a certain scale, which varies from bank to bank.

Allowances are part and parcel of any bank wage pact.

The latest one too is liberally sprinkled with allowances -- ranging from city compensatory allowance (CCA) to location allowance (for posting at places not entitled to CCA), learning allowance, special area allowance, and hill and fuel allowance, among others.

Postings to places at an altitude above 1,000 metres but less than 1,500 metres, between 1,500 and 3,000 metres, and above 3,000 metres entail different rates of allowances -- the higher the location, the bigger the allowance.

I am told the employees also get a port allowance (for working at port cities such as Kochi in the south and Haldia in the east), but the agreement does not talk about that.

The latest pact is liberal in offering 'stagnation' increment to senior executives who have hit the highest end of the pay scale and are not entitled to more even though they have years to retire.

For instance, till November 2022, Scale V officers (assistant general managers) were entitled to just one stagnation increment. Now, they will get four.

Similarly, Scale VI and VII officers (deputy general managers and general managers) will get three such increments, once every alternate year, after hitting the ceiling.

Similarly, officers who are Certified Associate of Indian Institute of Banker (CAIIB) and Junior Associate of Indian Institute of Banker (JAIIB) have been getting one increment each for completing these courses.

Now, officers who have completed the CAIIB course will get one more increment.

For workmen, the number of stagnation increments has gone up from nine to 11.

Such increments are music to the ears of bankers. But retired bankers will not be happy with the 12 bipartite wage pact since their demand for the pension to be updated has not been accepted.

This issue has been pending before various courts, including the Supreme Court of India.

'Without prejudice to the court cases', the agreement has arranged to pay an additional amount as ex-gratia payment per month to all pensioners.

This will be in addition to the pension/family pension that the PSBs, including the SBI, pay to those pensioners and family pensioners who became eligible to draw pension on or before October 31, 2022.

Another disappointment is that the long-awaited five-day week for bankers is yet to take off.

In December 2023, the IBA and the bank officers' associations had reached an understanding that all Saturdays would be treated as holidays under the Negotiable Instruments Act for the banking industry.

Accordingly, the IBA recommended this to the government, which is the majority owner of PSBs.

However, the industry will have to wait for a go-ahead from the central government and the Reserve Bank of India for this to be implemented.

In the digital banking era, there's no harm in embracing a five-day work week since the customers will not be inconvenienced.

While the wait for a five-day week gets longer, the most interesting developments that make the agreement progressive and humane relate to holidays.

Many changes have been incorporated in the rules for leave. Some of them could become talking points in the cocktail circuit.

To start with, the leave sanctioning authority will now have to record the reason for refusal or postponement of leave sought by any employee.

A single male parent can now avail of sick leave if his child of eight years or below is unwell.

Bankers will get up to 10 days of sick leave for the illness of a special child aged 15 years and below on producing a medical certificate.

The leave fare concession will be extended to an escort accompanying an employee with benchmark disabilities such as blindness or low vision, deafness, a victim of acid attack, among others.

Women employees will be allowed to take one day of sick leave a month without having to produce a medical certificate.

An employee aged at least 58 can take up to 30 days sick leave if the spouse needs to be hospitalised at a place different from the station of work.

If a woman banker gives birth to triplets or more, she will be entitled to up to one year of maternity leave.

A maximum of nine-month maternity leave will be granted to women bankers who adopt a child of less than one year.

Maternity leave may be granted for in vitro fertility (IVF) treatment, provided a medical certificate is produced, within the overall limit of 12 months.

The banking industry has also introduced half-a-day of casual leave. An employee can take such leave for four days (two-day leave) -- twice each in the first and second half of the day.

Most interestingly, a 'leave bank' is being created. The scheme is being framed by the IBA and will be in place in June.

Bankers with extra days of leave (leave or monetised value of the leave) will be able to pool such leave in a leave bank.

Those who don't have enough leave but need it will be able to use them.

Typically, major illnesses such as cancer, cerebral stroke, paralysis, failure of kidney, liver, et al.

make it necessary for affected employees to stay away from office for a long period without pay.

Such employees will be able to access extra leave, beyond their entitlement, once the leave bank is in place.

Bankers will also be granted bereavement leave on the death of a family member. Individual banks will decide the period of such a leave.

Finally, for reimbursing medical expenses and leave fare concession, any two of the dependent father, mother, father-in-law and mother-in-law will be covered for all bank employees.

Bankers will have the choice of changing the dependents once a year.

These are all progressive and humane initiatives.

Just one question: Why do the IBA and trade unions call bank employees (non-officers) workmen?

Close to 40 per cent of bank employees are women.

Isn't the time ripe to start calling them simply bankers -- a la batter in cricket?

Tamal Bandyopadhyay is an author and senior advisor to the Jana Small Finance Bank Ltd. His latest book is Roller Coaster: An Affair with Banking .

Disclaimer: These are Tamal Bandyopadhyay's personal views.

Feature Presentation: Aslam Hunani/Rediff.com