Pave way for defined contribution pension scheme.
Bringing an end to long-drawn negotiations, the Indian Banks’ Association (IBA) on Tuesday signed a wage revision pact with nine bank unions, which will lead to an additional wage burden of Rs 5,200 crore for 46 banks.
The revision will be effective retrospectively from November 2007 and will be effective for five years, benefiting 775,000 employees and officers.
The pact also gives an option of pension to existing employees who did not choose it earlier.
The All India Bank Employees Association (AIBEA) in a statement said 26 public sector banks would have to shell out Rs 4,816 crore additionally. Old private banks (12) and foreign banks (8) will shoulder a burden of Rs 400 crore. This increase represents 17.5 per cent of additional load on the wage bill as existed in March 2007.
Under the settlement, the pay of Scale I-VII officers will range from Rs 14,500 to Rs 52,000. From May 1, the scale for clerks will range from Rs 7,200 to Rs 24,900, and for subordinate staff, it will range from Rs 5,850 to Rs 11,350.
The deal also provides 260,000 existing employees and 50,000 retired personnel an option to join the existing Defined Benefit Pension Scheme in lieu of the contributory provident fund. Employees joining April 2010 onwards, would now be joining the Contributory Pension Scheme as available to government employees, the release said.
“We are sure this agreement on wage increases coupled with the long-awaited another option to join the existing pension scheme will bring relief to employees and would be a motivation to improve efficiency in our services to customers," Vishwas Utagi, secretary of AIBEA, said. The revision also covers those employees who have opted for the voluntary retirement scheme. The wage revision also enhances benefits such as house rent allowance, leave fare concession, reimbursement of hospitalisation, among others.
Retirement benefits such as gratuity and pension will also improve in line with higher pay scales.
