Indian Banks' Association proposes new wage hike formula to bank unions

Bank unions have opposed the proposal of linking pay to performance

Indian Banks’ Association (IBA) has proposed a new wage hike formula to bank unions. Under the proposal, while the fixed hike is set at 6 per cent, the variable component will be based on the grading of banks in three categories: A, B and C. 

The performance linked-compensation part will be computed annually based on the financial results of the bank. The two parameters proposed to be used for computing the variable-linked pay would be -- operational profits and return on assets. 

Thus for FY 2017-18, in terms of both the parameters, only two banks — Indian Bank and Vijaya Bank, qualify