BREAKING NEWS

BREAKING NEWS ""**If we want PSU bank to compete with Pvt bank ---Give them a break Saturday first*** DA FOR BANKER FROM FEBRUARY 2023 SEE DETAILS CHART FOR OFFICER AND WORKMAN***Outcome of Today’s meeting with IBA - 31.01.2023***All India Bank Strike 27.06.2022******PLEASE VISIT INDIAN TOURISM CULTURE & HERITAGE *****NITI Aayog finalised names of Two public sector banks and one general Insurance Co. for privatisation****No economic reason to privatise PSU banks---post date 24.05.2021******Mobile users may soon be able to switch from postpaid to prepaid and vice versa using OTP*****India May Privatise or Shut 46 PSUs in First 100 Days, Says NITI Aayog's Rajiv Kumar----We should start with the banks*****Expected DA for Bank Employee from August 2019 is 24 slab to 29 slab*****RTGS time window from 4:30 pm to 6:00 pm. with effect from June 01.06.2019******WITHOUT CUSTOMER'S CONSENT BANK CAN NOT USE AADHAAR FOR KYC ----RBI***** Salient features of Sukanya Samriddhi Account---Who can open and how?******OBC posts 39% rise in Q4 profit, OBC readt tWITHOUT CUSTOMER'S CONSENT BANK CAN NOT USE AADHAAR FOR KYC ----RBI o take another Bank--MD MUkesh Jain*******DA FOR BANKER FROM NOV 2018 IS INCREASE 66 SLAB I.E 6.60%****40,000 STANDARD DEDUCTION IN YOUR TAX - IS A GREAT DRAM/BLUFF BY JAITLY SEE DETAILS+++++++Cabinet approves plans to merge PSU banks-The final scheme will be notified by the central government in consultation with the Reserve Bank. post date 23.08.2017****IBA to restrict the negotiations on Charter of Demands of Officers' Associations up to Scale-III only post dated 07.07.2017*****

VISITOR FROM WORLD

Free counters!

YOU ARE VISITOR

Blog Archive

LIVE

BREAKING NEWS ""**If we want PSU bank to compete with Pvt bank ---Give them a break Saturday first****Outcome of Today’s meeting with IBA - 31.01.2023*********

Sunday, September 1, 2019

How "PERFORMANCE* *LINKED PAY for Banker " WILL CALCULATE as per IBA guidelines



In recent meeting of 11th Bipartite wage revision for public sector bank employees, the Indian Bankers Association (IBA) has coined the Performance Linked Pay Structure (PLP) and insisted and advised to the Bankers' association to incorporate it to their charter of demand.
The performance linked pay structure will be based on many criteria like Return on Assets, Operating Profits, YoY growth etc. Many of the banks has advocated about the PLP.
IBA detailed their proposal as under :
1. Category of Banks
2. Percentage Increase YoY in Operating Profit
3. Return on Assets (ROA)
4. Payout as Annual Increment on Establishment cost
5. IBA will payout as Maximum of 8.2% and Minimum of 1.4% as annual increment on Establishment cost.
6. The Annual increment will be paid addition to the existing 6% hike which would be fixed component.
What is Performance Linked Pay :
Take an example - consider the Gross Salary as Rs 100 in Scale I with any of the Public Sector Bank. Gross salary includes Basic Pay, DA and HRA.
As per IBA offers of 10% Fixed Hike in salary :
The salary after fixed hike will be : Rs 100 + Rs 10 = Rs 110 (No DA merging is considered yet)
The Gross Salary with Fixed hike of 10% will be paid after 11th Bipartite to all the employees irrespective of any criteria : Rs 110
*Performance Based Annual Increment*
This is where IBA has twisted the 11th Bipartite Negotiation, as per IBA proposed complex formulae, all the banks are categorized on the baisis of performance components i.e. Return on Assets (ROA) and Profitability majorily.
As per offer given by IBA :
Category 'A' Bank :
All such banks which are having Return on Assets (ROA) greater than Zero and Percentage increase in YoY Operating Profit higher than 15%.
The base year considered for the calculation is 31st March 2018.
Mandatory Criteria :
Operating Profit : > 15% | ROA - >=0
Category 'B' Bank :
Similarly, for category B banks the criteria are :
Mandatory Criteria :
Operating Profit : 7.1 - 15% | ROA - (-)0.24 - 0
Category 'C' Bank :
Similarly, for category C banks the criteria are :
Mandatory Criteria :
Operating Profit : 0.01% - 7% | ROA - (-)0.75 - 0.25

Percentage of Increment Paid on Annual Basis
All such banks, which are having YoY Growth in Operating Profit/Net Profit higher than 15% with ROA of '0' and above will get the annual increment as 8.2% on Establishment cost of 30 days.
For e.g. Indian Bank having ROA as 0.53 with positive Net Profit. It will achieved both the criteria as on 31st March 2018 hence qualified for "AA" category.
The Annual increment offered to this bank as per new scheme will be 8.2% of 30 days establishment cost.
What is an Establishment cost ?
This is the cost incurred on the staff expenses in general by the organization.
Hence these two Banks' employees will be paid '8.2%' on establishment expenses of average 30 days.
Formula Explains :
Suppose the Establishment expenses of Vijaya bank as on 31st March 2019 is Rs 100 and there are 50 employees in the Bank, in such case the
Annual Increment with new formula will be :
For e.g. in Indian Bank
Establishment Expenses For Year : Rs 100
Establishment Expenses of 30 Days : 100/365*30 = 8.21
Increment for each employees : 8.21/50 = 0.16
Gross Salary of employees as on 31st March 2018 : Rs 100
Gross Salary with Annual Increment : Rs 100 + (Rs 100 X 0.16) = Rs 116 (Other than Fixed hike)
Annual Increment offered to each employees in "AA"category bank will be 0.16 factor. Similarly each of the bank will be classified and paid as per their categories.
No photo description available.

No comments:

Top 10 largest banks in the world in 2024

Have you ever wondered which is the largest bank in India? Today, in this article, we will tell you about the top 10 largest banks in the wo...

script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js">