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Kudos to AIBOC For Issuing Hard Hitting Press Release on Pathetic condition of Bankers



Rajesh Goyal 

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We reproduce below the Press Release by AIBOC as available on internet (However, the same is not uploaded on their website at the time of writing this article).  We feel it is a great initiative on the part of Mr Harvinder Singh to call a spade a spade.  [The date indicates it has been issued a day before the CLC meeting held on 6th February, 2014] I will be separately writing, what else the unions need to do at this stage to build the pressure.


(Registered under the Trade Unions Act 1926, Registration No.:3427/Delhi)
C/o Bank of India, Parliament Street Branch
PTI Building, 4, Parliament Street, New Delhi:110001
Phone:011-23730096 Tel/Fax 23719431

REF: AIBOC/2014/01 DATE: 05/02/2014


The revision of salary of around 10 lac bank officers and employees is due from 1st November 2012 for which a comprehensive Charter of Demands was submitted by the Officers’ Organisations to Indian Banks’ Association (IBA) on 30th October 2012. In the last 15 months, 8 rounds of discussions have taken place between IBA and Officers’ Organisations and date of effect from 01.11.2012 and DA Merger points at 440 points were the only two issues settled.

Apart from this, IBA has made an initial offer of 5% salary increase on “pay slip component” which was enhanced to 9.5% after the Unions gave a strike notice and Central Labour Commissioner intervened to avert the strike. In the next round of discussion held on 27th of January 2014, IBA improved the offer by 0.50% i.e. from 9.5% to 10% which was considered as insultingly inadequate and less than what was offered in the last Bipartite Settlement and hence rejected by the Employees’ and Officers’ Organisations.

Historically, the bank officers were paid higher salary than the Government officers of comparable Grade due to various factors like Accountability, Transferability, Responsibility and Role-sensitivity. To have a parity with Government employees, Pillai Committee was constituted in 1979 and as per the Committee’s recommendations the pay scales of bank officers were rationalised and made at par with Government Officers. Such parity was distorted to the disadvantage of bank officers by implementing 4th, 5th and 6th Pay Commission Recommendations at much higher levels and the salary difference at initial stage of pay is alarmingly high. The bank officers’ gross pay slip amount at initial stage is about Rs.30700/- as against Rs.56400/- for Government officers. Similar differences exist at different stages in the hierarchy. It has caused serious impact on the quality of recruits in a highly sensitive sector like banking. 

Salary payment made by all sectors is so high and bank-men were forced to get less salary not only compared to his counter parts in Private Sectors but also others in the market and bank-men can no longer be called in Island of high-wages.

A study conducted by National Skill Development Corporation has suggested that banks would need to recruit 4.50 lakh employees in next couple of years which calls for making the job attractive and competitive in terms of monetary compensation. PSBs are doing a yeoman service not only for the growth of productive sector of the economy but also uplifting the neglected sectors of the society. PSBs have done a commendable job in enhancing the penetration level of bank branches in remote villages, Financial Inclusion, implementation of various schemes of the Government etc. 

In this background, it would be appropriate to note that the productivity of the bank employees has gone up from Rs.594 lacs as on 31.03.2008 to Rs.1151 lacs as on 31.03.2012. The business of PSBs in last 5 years has gone up from Rs.3322000 crores (2007) to Rs.8487000 crores (2012). Similarly the profit per employee has increased from Rs.3.70 lacs (2008) to Rs.6.40 lacs (2012). Though the business has gone up substantially but the staff strength is not commensurate with the business growth. The wages to total expenses also have come down from 14.66 % to 13.72 % in last 5 years.

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These figures are indicative of increased work load and unduly extended working hours for the officers of PSBs. The growing materialism in the society has given rise to more frauds. The insufficient staff strength has weakened the preventive mechanism and monitoring systems in the banks ultimately lead to more vigilance/disciplinary and CBI cases against bank officers. The officers in PSBs are becoming risk-averse which affects the competitiveness at market place. The monetary compensation is considered an important motivator world-wide. The Fifth Central Pay Commission while recommending substantially higher pay scales for Government officers had justified the same on the grounds that higher compensation will prevent the Government officers from getting attracted towards the allurements. The same justification must apply for PSB officers where the incidence of such allurements could be much higher. 

The issue of affordability raised by IBA is farce and untenable as, despite after achieving social objectives(which are not expected to generate profits to the Banks) the Net Profit of PSBs is more than Rs.50000 crores, even after providing Rs.43102 crores towards bad loans (NPAs) whereas even an increase of establishment expenses by Rs.10,000 Crores works out to 17.76% of total establishment cost of the banks as compared to 17.50% given in last salary revision. It thus will have negligible impact on the balance sheets of banks. It is more alarming while seen in an environment where PSBs have written off Rs.95717 crores in last 6 years of which Rs.27013 crores were written off in the year ended 31.03.2013 alone. Thus huge sums are being doled out to fraudsters and dishonest corporates out of hard earned Operating Profits by write-off and deep-discounted One Time Settlements (OTS) to help the loan defaulters. 

Last salary revision for PSB officers was at 17.5% of establishment cost which after factoring for superannuation costs and non-salary components of establishment cost left 11.43% for appropriation towards pay slip increase. Since establishment cost is almost double of salary cost, the average pay slip increase for the PSB officers was 21.52%. In view of alarming increase in the inflation and cost of living coupled with substantial erosion of purchasing power, the PSB officers deserve to be adequately compensated by giving an increase more than last salary revision on pay slip cost. It may be recalled that pay slip increase at General Manager level was around 29.76% during last salary revision. Such an increase will also help reduce the pay slip difference of PSB officers vis-a-vis the Government officers. The role of PSB officers in nation building needs to be acknowledged by the Government by restoring pay parity with Government officers. Since about 50% of the new recruits in PSBs are women, adequate compensation would also help in women empowerment.


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