A BIRDS EYE VIEW ON WAGE REVISION FOR OFFICERS IN BANKS

A BIRDS EYE VIEW ON WAGE REVISION FOR OFFICERS IN

BANKS

BRIEF BACK GROUND:

Wage revision exercise – ie Joint Note signing by Officers organisation with IBA has been achieved by AIBOA in the year 1985 within 4 years of forming AIBOA in 1981 .

Prior to that it was only a notification from the Government for Officers wage revision as Officers are not (even now) covered under Industrial Disputes Act and hence there is no settlement that can be signed under ID act. Workmen achieved the bi partite settlement from the year 1964 and AIBEA is the first organisation to sign a wage settlement with IBA followed by the other workmen organisations,

Com Prabhatkar who was the founder President of AIBOA and the architect of AIBEA formed AIBOA a separate officers organisation on the ideology of AIBEA . This was necessitated as the then majority organisation for officers, AICOBOO (Present AIBOC) did not join the common strike called by AIBEA in 1980s to protect the DA Pattern which was about to be altered by the then Morarji Desai Government . However Com Prabhatkar went ahead with the strike and thanks to AIBEA and Com Prabhatkar that DA Pattern is retained even today for the entire banking fraternity which is no where available for any Industrial worker or any other sector in India.

Thus the Officers organisation started to sign Joint Note with IBA and we are on the success path to sign 8th Joint Note for officers wage revision.

SOME FACTS BASED ON HISTORICAL EVENTS.:

The following table is taken from the Joint Charter of Demand submitted by the 4 Officers organisation on the comperative analysis of bank officers wage revision salary with that of Central Government employees.

Please go through carefully . The Officers basic pay is higher always in the 2nd 5 year of the10 year period till the last wage revision. Like that in this wage revision also, the officers basic pay will be lesser in the first 5 year period from 2017 to 2022 and it will be higher than that of the central government once the next Joint note is signed covering the period from 2022 to 2027.

The wages for Government employees are revised once in 10 years and for the Bank officers it is once in 5 years. The wage revision is a direct debit to the consolidated fund of the Government in case of government employees and hence there is not need for the Government to look into its paying capacity. However for Bank employees & officers, the wage is debited to the Revenue account (Profit and Loss Account) of the banks and it has a direct bearing on the paying capacity in the wage revision exercise.

AIBEA and in the later years along with AIBOA played a crucial role to ensure equal pay for equal work in the Banking Industry in spite of the fact that even today the SBI is paying its employees and officers over and above the amount settled at Industry level.

Table: 3

Comparative analysis of minimum Basic Pay

between Central Govt Officers Group A and Bank Officers.

Period of

Min BP of

Period of Bipartite

Mini

Comparison of

CPC

Central

Settlements

mum

Basic Pay

Govt.

B.P.

Officers

of

Rs.

Bank

III CPC

700

PCR

01.10.19

700

Both are same

(1973 to

4th

79

1175

Bank officers BP is

1985)

01.02.19

BPS

67.85% higher than

84

5th

IV CPC

2200

01.11.19

2100

Bank officers’ BP is

(1986

BPS

87

4.54% lower than officers

to 1995)

of Cent. Govt. Officers

Govt.

6th

01.11.19

4250

Bank officers’

BP is

BPS

92

93.18%

higher

7th

than officers

of

V CPC

8000

01.11.19

7100

Bank officers’ BP is

( 1996

BPS

97

8.75% lower than

to 2005)

officers of Cent.

h

01.11.20

10000

Govt.

8t

Bank officers’ BP is

BPS

02

25% higher than

officers of Cent.

h

01.11.20

14500

Govt.

VI CPC

21000

9t

Bank officers’ BP is

(2006

(15600+

BPS

07

30.95% lower than

to 2015)

5400)

officers of Cent.

h

01.11.20

23700

Govt.

10t

Bank officers’ BP is

BPS

12

12.85%

higher

than officers

of

Cent. Govt .

During 6th Joint note period (01-11-2007 to 2012 when Com RJS and AIBOA was advocating for new basic pay of Rs. 15600/- the so called majority officers organisation pegged it down to Rs.14500 in the name of one additional stagnation increment for Scale III officers.

Unfortunately the Majority organisation for officers always took a regressive & archaic role in wage revision exercise like they did in DA and Pension issue at the cost of officers welfare. Now they are crying for CPC wages .

WAGE REVISION - HOW ARRIVED AT:

From the last wage revision exercise, IBA decided to discuss with unions/associations on PAY Slip Component only .

Pay Slip Component (PSC) Include the following

1:BASIC PAY( INCLUDING STAGNATION INCREMENTS)

2. DEARNESS ALLOWANCE

3:CITY COMPENSATORY ALLOWANCE

4:HOUSE RENT ALLOWANCE

5. PERSONAL QUALIFICATION ALLOWANCE(PQA)

6. FIXED PERSONAL ALLOWANCE (FPA)

7:SPECIAL ALLOWANCE (INTRODUCED FROM LAST WAGE REVISION)

NON PAY SLIP COMPONENT INCLUDE ( which has to be given by bankers )

1:TERMINAL BENEFIT (PF, GRATUITY, PENSION) 2.TA/HA

3.MEDICAL BENEFITS

4.MEDICAL AID

5.OTHER ALLOWANCES NOT INCLUDED IN PSC

For all the Joint note for Officers, the wage revision exercise ( ie percentage increase) is done on the wage bill as at the 31st March of the year in which the Wage revision exercise commence. For the current wage revision exercise, the basis for wage bill is 31st March 2017 as the wage revision exercise shall commence from 1 11 2017.

Current wage revision will be discussed on the wage bill as at 31 3 2017 which according to IBA Statistics is Rs. 90,208 Crores. Out of this 90208 Crores Payslip Component is (PSC) is Rs.52654 crores and the remaining Rs.37554 Crore is Non payslip component( NPSC). This is the wage bill on the banking industry as a whole (who have given mandate to IBA).

How much increase, over & above Rs.52654 Crs is what the negotiations is going on ?

Last wage revision we achieved 15% on PSC which worked to be 4725 Crores increase on the wage bill. (1% of psc was 315 Crores).

This time the IBA has so far offered an addition of 10% on the PSC (Rs. 52654 Cores) which means the additional burden on the revised wage revision will be Rs.5265 Crores (which is more in terms of quantum achieved last time {Rs.4725Crs}) to the banking fraternity as a whole ie workmen and officers. Presently the workmen officers wage bill ratio is 42.85 and 57.15 respectively.

Once the quantum is arrived at, then how to distribute amongst the various PSC is the duty of the negotiating organisations to finalise with IBA.

IBA has also offered a variable pay of 6.2% which the negotiating unions/associations rejected intoto.

However issue on fractured Mandate by five banks ( SBI, BoB, PNB, UBI,and Indian Bank) that they offered mandate only upto Scale III is haunting. On this AIBOC and NOBO boycotted the wage revision exercise. After pursuation by UFBU with IBA, IBA offered to discuss upto Scale V ( ie upto AGM Level) with negotiating officers salary leaving DGM and GM at their disposal. This mean 99.70% of the total officers upto AGM level are coming under Wage revision exercise and 0.30% ( ie 2775 GMs and DGMs) are out of the purview of the wage revision exercise.

AIBOA however continued to and participated in the wage revision exercise keeping the demand of inclusiveness and not exclusiveness.

DA MERGER POINTS:

DA as at 31 10 2017 ie at 6352 points will be added to the present basic pay to arrive at the new basic pay( ie 47.8% will be added to the present basic pay to arrive at the new basic pay)

HOW NEW BASIC PAY IS CONSTRUCTED:
PRESENT STARTING BASIC PAY FOR SCALE I OFFICER	RS. 23700,00
MERGER DA AT 6352 POINTS IE @47.8%	RS. 11328.00
Total	Rs. 35028.00
On this they will add certain % of the wage
Revision agreed (ie on the proposed increase)
Which is normally 4 to 6% But last time it was
Restricted to 2% only . Taking into account this	RS. 700.58
The revised basic pay will be	RS. 35700.00

THIS WILL BE THE REVISED BASIC PAY FOR SCALE I STARTING PAY AND THE INCREMENT PATTERN WILL BE ADOPTED BASED ON THE DA MERGER.

WHY CAP ON 2% for basic pay revision:

As per AS 15 audit norms ( now it will be Ind AS Norms) all banking companies in India are to keep provision for terminal benefits in their yearly balance sheet an amount equivalent as if the bank is closed today, the closed entity must be in a position to pay all the terminal benefits like PF, Pension, Gratuity till the last surviving pensioner is alive. This has cost the bankers to substantially increase their NPSC provisions.

From the wage bill you can see that bankers incurred 42% of the wage bill as Non payslip component where as the pay slip component is Rs 58% ( ie out of 90208 crores Rs. 52654 is the PSC which is 58% and the remaining is 42%. The actuarial calculation given says that for every 1 rupee increase in basic pay needs nearly 4 Rupees additional provision for terminal benefits . Hence the cap of 2% was only offered to us last time)

This time also the same exercise is expected continue.

WHY SPECIAL PAY ?

Bank officers salary consists of 4 components normally,

1.Basic Pay

2.Dearness Allowance

3.HRA

4.CCA

An increase in HRA and CCA will not benefit the officers work force, as 52% of the officers either occupy leased quarters or reside in banks owned quarters and hence do not receive HRA. Likewise about 48% of the officers work in rural and semi urban areas which do not rank for CCA.

Hence out of the proposed wage settlement after giving 2% increase for the construction of basic pay, the remaining amount can not be loaded to either HRA and CCA and it can be paid only by way of a special allowance which was the reason that we got the special allowance last time which other wise is the increase in basic pay only. All the serving employees get DA on this allowance and it shall not rank for terminal benefits.

AIBOAs PRIORITIES IN WAGE REVISION:

We go by the advise of our great leader Com Tarakda, that there is need for money and not greed for money. We from AIBOA demand a REASONABLE RESPECTABLE WAGE

REVISION COMMENSURATE TO THE NATURE OF JOB (BOTH QUANTITY AND QUALITY)

Our priorities apart from reasonable and respectable wage revision for officers, the following are the priority issues

1.5 days a week banking

2.Regulated working hours for officers

3. Improvement in Discipline and Appeal Regulations.

4.Updation of regular/family pension and improvement in medical benefits

5.Grid holidays on par with holidays of normal banking holidays.

6.Substituting New Pension Scheme with old pension Scheme.

WHY CPC RELATED WAGES IS NOT ACHIEVABLE PRACTICALLY :

It has come to notice that many unlearned leaders are misguiding the workforce by advocating CPC related wages without knowing the nuances of wage revision and related issues.

If the basic pay for officer in scale I is to be at Rs.56100 then IBA must offer 40% for basic pay construction apart from other areas of PSC and NPSC

The calculation as as under.
Present basic pay	23700.00
DA merger (already agreed) 47.8%	11328.00
Additional amount now required to
Improve basic pay to 56100	21072.00 (ie 40% of the PSC)
Revised basic pay	56100.00

Apart from this the bankers will incurr 42% for NPSC as discussed above. Which mean IBA has to offer nearly 82% of Payslip component which comes to Rs. 526.5 x 82 = Rs 44000 Crores – for officers wage revision alone this much and equal amount is required for work men wage revision which amounts to Rs. 88000 Crores. This amount do not include the distribution under HRA , CCA and other allowances and if taken it requires nearly Rs.100000 crores of rupees.

Whether the present banking condition permits to pay Rs. 1 lac crore as wage revision when the wage bill itself is only Rs. 90208 Crores. The capital infusion today said to be upfront to banking industry is only Rs. 70000 crores only and whether government will accept this wage revision.

Are they pragmatic

Are they trying to settle the wage revision or mar the wage revision exercise. Are they trying to bring in bank wise settlement.

Their aim is towards merger of banks through wage revision exercise

AIBEA achieved Uniform DA pattern, AIBEA & AIBOA achieved pension for all in the industry

AIBEA and AIBOA achieved 100% DA neutralisation for Officers in the banking industry. AIBEA and AIBOA only achieved one more option for those who didn't opt (rather were misguided, not to opt for) pension during 1993-1995.

AIBEA ACHIEVED BI PARTITE SETTLEMENT WHICH EARNED UNIFORM WAGES AND DECENT LIVING AND SERVICE CONDITION FOR THE ENTIRE BANKING INDUSTRY WHETHER BIG OR SMALL BANK, LOSS MAKING OR PROFIT MAKING BANKS ACROSS THE COUNTRY.

AS MENTIONED IN THE TABLE THE BANK EMPLOYEES ARE ALWAYS AHEAD IN THE 2ND5 YEAR OF THE CPC TIME OF 10 YEARS. BANK WAGE REVISION IS THE GATE WAY FOR WAGE REVISION IN RBI, LIC AND OTHER FINANCIAL SECTOR.

REQUEST YOU ALL TO BELIEVE THE MUCH EXPERIENCED AIBOA AND AIBEA AND LET NOT BE FOOLED BY RUMOUR MONGERS WHO ARE TRYING TO MISGUIDE YOU.

FROM

THE DESK OF A SENIOR LEADER OF CBOU WHO IS A PARTICIPANT TO NEGOTIATIONS