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Bankers have successfully achieved their dream of five-day work along with wage revision with the help of their unions, but there is more than meets the eye. Let’s get into the details and understand what went behind to bring about this change.

Only in the banking industry wage revision is agreed upon through a negotiation called Bipartite settlement between the Indian Banks Association and the 5 workmen unions and a joint note between IBA and 4 officers organisations. The United Forum of Bank Unions which is an umbrella body of workmen unions and officers associations coordinates the process.

In the case of Union government officers and employees, there is no negotiation but there is a ‘Pay Commission’ to which you can place your demand but you can’t negotiate. The same is the case with public sector enterprises and undertakings.

Trade Unions of workers continue to have negotiated settlements in limited industries depending on their strength.

The United Forum of Bank Unions has five workmen unions and four officers’ associations. The unions sign a bipartite settlement and associations sign a joint note. Even small unions and associations are part of the United Forum which is a unique model and which has sustained for a long time, weathering many storms thanks to the maturity of their leaders.

Even during the process this time there was almost a breakdown, but with the firm stand taken by the All India Bank Officers Confederation which has around 85% officers in its fold, the unity could be sustained.

This 12th Bipartite Settlement and 9th Joint Note where the MOU has been signed in the shortest time after the due date, which was 1.11.2022. This is probably the first settlement reached without going on strike and losing wages. Every settlement has had its uniqueness. Getting a second option for pension, getting two Saturdays off, getting a pension for all bank employees, and getting similar other benefits have happened earlier.

This settlement has its uniqueness. One, this is the highest increase with a 17% salary increase. This settlement has achieved improvement in the pension of retirees after 35 years which is available for union Govt. employees. The pension also gets revised for government pensioners with every pay commission which is implemented once in 10 years.

Updation for pension has been a demand for a long time but came into attention during the tenth settlement. A note was signed agreeing to discuss it separately but nothing moved. Some discussions took place during the 11th settlement but nothing materialised despite a strike.

This time IBA initially offered updation stage by stage i.e. up to 2002 retirees now and in later settlements for others which was rejected by the UFBU. The revised offer was to give a one-time lump sum amount without updation which was also rejected by UFBU at the insistence of All India Bank Officers Confederation and a few others though many agreed to it. On 7th December the IBA offered an improvement on the pension for retirees. Now an ex-gratia has been agreed which is more for the seniors who retired early and less for those who retired recently. It is no match to the updation.

The positive development is that this process has begun. The IBA and Govt have been saying that the bankers have no right to claim updation. But, now the anomaly has been accepted and by the next settlement if there is labour friendly government the updation will also take place.

There are many organisations of pensioners. But, there is no unity. Some are not willing to fight. Hence UFBU is the only organisation which has to bargain and has stepped forward.

As stated by Mr. Rupam Roy, General Secretary AIBOC, in front of the Management Executives, the wage load towards basic pay is 3% which is not up to satisfaction but the offer of improvement in pension for the elders is welcome and as a team member of UFBU he has signed the settlement. Delaying further would not have achieved anything as we are on the verge of elections and the new government will take its own time.

The greatest expectation of the youth in the Banking Industry – the five-day week, is going to come true, despite opposition from the Industry Associations. During the 10th Bipartite most of the leaders felt that this would not be achieved but due to the strong position taken by the All India State Bank Officers Federation two Saturdays off was achieved with an assurance that after 6 months it would be reviewed and the Five-Day week may come true; but that never happened.

Now after 10 years, a five-day week which already exists in RBI, NABARD, SIDBI, LIC, GIC, Union Government, many State Governments and even in the IT industry will come true for bankers.

The RBI has to issue the notification and the RBI follows the instructions of the Finance Ministry. If Election Commissioners could be appointed in a week the five-day week notification can be issued at a lesser time. Delaying it further will lead to doubts. Many young people in the Banking Industry have expressed that they will not only vote against the ruling dispensation but also canvass among customers to vote against BJP if the five-day week is not implemented before the announcement of election dates.

A Critical Look:

Wage Increase: It is 17% on the pay slip component which is the highest ever and that is an achievement.

Load for basic pay:

3% is better than 2.5% achieved in the 10th and 11th Bipartite. The mistake started with 10th Bipartite but Insurance employees and officers have got a better basic. The same is the case with RBI, NABARD and SIDBI. The Union Govt. which is the third party to the settlement which has the final say does not want the pension and super annulation benefits to increase because while privatising banks this may come in the way. This is the dissatisfaction expressed by AIBOC which demanded at least 6% whereas it should have been 12-14% which was the practice during previous settlements. In the next settlement, this anomaly has to be rectified. If the Supreme Court comes in favour of the petitioners who have demanded special pay to be included in pension calculation that will be a great relief.  The cases have been transferred to the Delhi High Court at the behest of IBA and the Government’s Solicitor General. We don’t know when it will see the light of the day. There is hope for pension Improvement.

Ex gratia in lieu of updation:

The demand was updation but what is achieved is improvement. This has to be welcomed. Unlike the UFBU, Pensioners associations are not united. The demand for ‘One Rank, One Pension’ was achieved by defence pensioners by going to the street. But the leaders of the Bank Pensioners Organisation do not want to struggle though its members are ready. In the case of RBI pension, the unions, associations and retirees were united and the management stood with them. They averted a strike and revised the pension. The pensioners keep blaming the UFBU leaders as if they are the enemies. Com. C.H. Venkatachalam, AIBEA is blamed unnecessarily instead of the Govt that takes the final decision. The leaders demand and negotiate. Success depends on struggles and hard bargaining. The farmers struggled for more than a year to get three farm laws withdrawn.

AIBOC struggled for a year to get the FRDI Bill withdrawn which the Govt says it will bring back at an appropriate time which could be when it has two third majority in the Parliament.

This improvement will definitely lead to updation in the next settlement if privatisation is stopped. The New pension scheme has to be revised as old pension scheme or as an assured pension scheme with family pension. This period has seen improvement in family pension, 50% of the last drawn pay for SBI Pensioners, (though it is still pending at the implementation stage) mainly officers and improvement in pension. Kudos to the UFBU for that.

Other Benefits:

The AIBOC Circular has listed the following improvements.

The salient features of the wage negotiations i.e. the 9th Joint Note are as under:

  1. Paving the way for a 5-day work week – The Joint Note recognizes all Saturdays as holidays, pending government notification. The revised working hours will be effective after notification by the government.
  2. Substantial Increase in Salary – The total quantum of wage revision increase (Payslip component) is more than Rs. 8284 crores being 17% of the cost of Payslip component of establishment expenses of Public Sector Banks.
  3. The new pay scales have been constructed, after merging Dearness Allowance corresponding to 8088 points and additional load thereon.
  4. With the applicable load of 3.22% the effective load on the basic pay post-merger of dearness allowance at 30.38% is 4.20%.
  5. The long-drawn aspiration of the officers’ community for two additional increments for CAIIB (CAIIB Part-II) is achieved.
  6. Officers who have completed CAIIB (CAIIB Part-II) shall be eligible for two increments w.e.f 01.11.2022.
  7. Officers shall be eligible for three PQPs instead of two PQPs hitherto. PQP-I -Rs 1370/- , PQP-II Rs 3425/- and PQP III- Rs 5480/-
  8. The effective load for officers completing CAIIB shall be increased substantially.
  9. Inter se anomaly on account of additional increment for CAIIB is taken care of.
  10. Inter se anomaly on account of sanction of PQP has also been taken into account.
  11. The new scales of pay range from Rs. 48480/- to Rs.173860/- covering all the scales from Scale I to VII, with effect from 01.11.2022.
  12. Reworking of the Dearness allowance formula: The conversion factor on account of the merger of Dearness Allowances worked out at 0.0549. Instead of being rounded off to 0.05, it is raised to 0.06 extending benefit to serving and retired officers.
  13. The index for dearness allowance is shifted from 1960=100 series to 2016=100 series resulting in shifting the conversion factor from 0.06 to 0.99 as per 2016=100 series benefitting the officers with enhanced dearness allowance.
  14. The factor of 0.99 as per 2016=100 series is converted to 1.00 improving the dearness allowance further.
  15. Thus, there will be additional benefit in percentage terms in dearness allowance as per the agreed changes negotiated above.
  16. The Dearness Allowance shall be payable as 1.00 % of ‘pay’ per percentage point of index, the DA in the above manner shall be paid for every variation of rise or fall over 123.03 points in the quarterly average of the All India Consumer Price Index for Industrial Workers Base 2016=100. 0.01% change in DA on ‘pay’ for change in every second decimal place of CPI 2016 over 123.03 points.
  17. Dearness Relief on pension in the above manner shall be paid half yearly for every variation of rise or fall over 123.03 points in the quarterly average of the All-India Consumer Price Index for Industrial Workers Base 2016=100.
  18. Officers in JM Grade Scale I who have moved to scale of pay for MMG Scale II after reaching maximum of the higher scale are presently eligible for five stagnation increments. With effect from 1st November, 2022, these officers shall be eligible for seven stagnation increments with frequency of two years each, of which first two shall be Rs. 2680/- each and next five shall be Rs. 2980/- each.
  19. Officers in MMG Scale II who have moved to Scale of Pay for MMG Scale III after reaching maximum of higher scale are presently eligible for five stagnation increments. With effect from 1st November, 2022 these officers shall be eligible for seven stagnation increments with frequency of two years each, of Rs.2980/- each.
  20. Officers in substantive MMG Scale III i.e. those who are recruited in or promoted to MMG Scale III are presently eligible for six stagnation increments after reaching maximum of the scale. With effect from 1st November, 2022, these officers shall be eligible for eight stagnation increments, with the frequency of two years each, of which the first four shall be Rs. 2980/- each and the next four shall be Rs. 3360/- each.
  21. Officers in SMG Scale IV are presently eligible for two stagnation increments. With effect from 1st November, 2022, these officers shall be eligible for five stagnation increments after reaching maximum of the scale, with frequency of two years each, of which the first stagnation increment shall be Rs. 3360/- and next four shall be of Rs. 3680/- each.
  22. Officers in SMG Scale V are presently eligible for one stagnation increment. With effect from 1st November, 2022, these officers shall be eligible for four stagnation increments after reaching maximum of the scale, with frequency of two years each of Rs.4000/- each.
  23. Officers in TEG Scale VI shall be eligible for three Stagnation Increments after reaching maximum of scale, with frequency of two years each, out of which first two shall be of Rs.4000/- each and the third stagnation shall be of Rs.4340/-.
  24. Officers in TEG Scale VII shall be eligible for three Stagnation Increments of Rs.4340/- each, with a frequency of two years each after reaching a maximum of scale.
  25. Fitment on Promotion – Every Officer on promotion shall be fitted in a higher stage in the new scale of pay with a protection of a minimum differential of one increment in Pay drawn by him/her in the pre-promoted cadre or scale, removing the anomaly in fitment.
  26. The Special Allowance, as percentage of basic pay, carrying the applicable DA thereon, with effect from 01.11.2022 for JMGS I is 26.50%.
  27. Disintegration of scales for payment led to higher payment of Special allowance to MMGS II and MMGS III. The Special Allowance, as percentage of basic pay, carrying the applicable DA thereon, with effect from 01.11.2022, for MMGS II and MMGS III is 28.30%.
  28. The Special Allowance, as percentage of basic pay, carrying the applicable DA thereon, with effect from 01.11.2022 for SMGS IV and SMGS V is 30.50%.
  29. The Special Allowance, as percentage of basic pay, carrying the applicable DA thereon, with effect from 01.11.2022 for Scale VI and Scale VII is 31.50%
  30. Fixed Personal Pay has been proportionately increased with applicable DA thereon.
  31. House Rent allowance has been increased to 8%, 9% and 10% of pay, in respect to the area of posting.
  32. Capital cost on account of HRA increased to 12%, 13.5% and 15%, respectively.
  33. The city compensatory allowance (CCA) has been increased to Rs 1900/- per month and Rs 2300/- per month based on place of posting.
  34. Location Allowance – W.e.f. 01.11.2022 a fixed allowance of Rs.1200 /- p.m. is payable to all Officers posted in areas other than the areas that are eligible for CCA.
  35. Deputation allowance – An Officer deputed to serve outside the bank to an organization in a different place other than the present place of posting will be paid deputation allowance @ 7.75% of Pay with a maximum of Rs. 7500/- per month
  36. An Officer deputed to another organization at the same place or to the training establishment not owned by the Bank will be paid deputation allowance @ 4% of Pay with a maximum of Rs.3750/- per month.
  37. Upon deputation of an Officer to another office/branch within the same municipal limits/ urban agglomeration, in Metro / Major ‘A’ Class cities where the distance of such deputation is 20 km and more from the parent branch/office, halting allowance shall be payable.
  38. Hill and Fuel allowance for Places with an altitude of 1000 meters and above but less than 1500 meters will be paid @ 2% of Pay subject to a maximum of Rs. 1450 per month.
  39. Hill and Fuel allowance for Places with an altitude of 1500 meters and above but less than 3000 meters will be paid @ 2.5% of Pay subject to a maximum of Rs. 1900/- per month
  40. Hill and Fuel allowance for Places with an altitude of 3000 meters and above will be paid @ 5% of Pay subject to a maximum of Rs. 3750/- per month
  41. Special area allowance is revised as extended to central government employees.
  42. Learning allowance has been increased to Rs 850/- per month plus applicable DA thereon.
  43. Officiating Pay – On and from 01.04.2024, an Officer who is required to officiate in a post on a higher scale for a continuous period of not less than 4 days at a time OR an aggregate of 4 days during a calendar month, shall receive an officiating pay equal to 15% of the Basic pay of the person officiating.
  44. Officiating pay will be eligible not only for Superannuation benefits, but also for Dearness allowance and House rent allowance.
  45. Mid Academic Transfer allowance has been increased from Rs 1650/- to Rs 2500 p.m. per child.
  46. Closing allowance has been increased to Rs 1500 per quarter.
  47. Halting allowance has been increased by 50% across the board.
  48. For scale I to Scale III, the halting allowance will range from Rs 1800/- to Rs 2925/- per day.
  49. For scale IV and V, the halting allowance will range from Rs 2150/- to Rs 3375/- per day.
  50. For scale VI and Scale VII, the halting allowance will range from Rs 2150/- to Rs 4050/- per day.
  51. Lumpsum compensation on transfer has been increased to Rs 40000 for Scale I to Scale III.
  52. Lumpsum compensation on transfer has been increased to Rs 50000 for Scale IV and above.
  53. Upon transfer, either 15 days lodging & boarding charges or 15 days Halting Allowance shall be paid to all officers, from the date of joining at new place.
  54. On and from 1st November, 2022, reimbursement of medical expenses shall be Rs. 13000/- p.a. for Officers in JMG & MMG (Other than SBI).
  55. Reimbursement of medical expenses shall be Rs. 15400/- p.a. for Officers in SMG & TEG Scales. (Other than SBI).
  56. Definition of Family: The income criterion for the term wholly dependent family member has been increased to Rs.18,000/- (improved from 12000/-).
  57. Physically and mentally challenged children, irrespective of age, shall be construed as dependents even after their marriage, subject to income criteria
  58. Officers can now have any two of the parents or parents-in-law as dependents. The employee will have the choice to substitute either of the dependents or both once in a calendar year.
  59. Entitlement distance increased to 5500 kms (one way) for officers in JMG-Scale-I, MMG – Scale II & III. For scale IV and above the same will be for 6500 Km (one way).
  60. An officer in Junior Management Grade will be entitled to travel by AC 1st class by any train including Premium Trains like Rajdhani/ Shatabdi/ Tejas/ Vande Bharat/ Amrit Bharat, etc. (except luxury trains).
  61. Reimbursement of fare by premium trains as mentioned above (except luxury trains) shall be allowed to all officers.
  62. Where an officer has applied for LTC/Leave in advance and has also booked the tickets and the LFC is declined or deferred by the management, the cancellation charges will be reimbursed by the Bank
  63. Where an officer has applied for LFC/leave as per stipulated time and the same is sanctioned and when advance booking of train tickets is not possible, tickets purchased under Tatkal/Premium tatkal will be reimbursed.
  64. GST Charges levied on Train Fare shall be over and above the entitlement.
  65. In view of the prevailing dynamic fare system, the cost of train tickets charged on the date of booking will be reimbursed.
  66. LTC / HTC can be availed independently where both husband and wife are working in the same Bank.
  67. Air travel eligibility for travel beyond 500 Kms (reduced from 1000 kms).
  68. Additional reimbursement under LFC for officers working in areas not connected by train.
  69. LTC facility shall be allowed for an escort who accompanies an Officer with benchmark disabilities on the journey, subject to certain conditions.
  70. A provision will be put in place to record the reason for the refusal or postponement of leave by the management.
  71. A single male parent can avail sick leave for the sickness of his child of 8 years and below.
  72. Employees can avail sick leave for the sickness of their Special Child of 15 years and below for a maximum period of 10 days in a calendar year.
  73. All Women employees shall be allowed to take one day Sick Leave per month without production of a medical certificate.
  74. In case of employees of the age of 58 years and above, sick leave may be granted towards hospitalization of the spouse at a centre other than the place of work and for a maximum period of 30 days in a calendar year.
  75. An employee shall be granted sick leave at the rate of one month for each year of service subject to a maximum of 720 days during the entire service.
  76. In partial modification of Leave Rules, Annexure VI clause 3 of Joint Note dated 11th November, 2020, the following shall be added as Note 3 – “In case of delivery of more than two children in one single delivery, Maternity Leave shall be granted upto 12 months.
  77. Employees shall be granted Bereavement Leave on the demise of the family members (spouse, children, parents and parent-in-law) and the number of days of such leave shall be decided by each Bank at their level.
  78. Officers who are Defence Representatives in departmental enquiries will be granted one day special leave for preparing defence submissions, subject to maximum 10 such leaves.
  79. Maternity Leave shall be granted once to a female employee for a maximum period of 9 months, for legally adopting a child who is below one year of age, all other conditions remaining the same.
  80. Maternity Leave may be granted for In vitro fertility (IVF) treatment subject to the production of a medical certificate, within the overall limit of 12 months.
  81. Four Half Day Casual Leaves have been introduced for all employees.
  82. A total of two days of Casual leave may be availed for half a day on 4 occasions in a year out of which 2 occasions would be in the morning and 2 occasions in the afternoon.
  83. Casual Leave under the above category can be availed after applying 24 hours in advance.
  84. Special maternity leave upto 60 days shall be granted in case of still born or death of the infant within 28 days of birth.
  85. Accumulated privilege leave may be encashed upto 255 days at the time of retirement/upon death of an employee while in service.
  86. Leave Bank Scheme – A staff welfare scheme under which provision would be made for voluntary encashment of Privilege Leave by the employees and the monetized value of such leave would be pooled under a Leave Bank system, out of which, special leave would be sanctioned to the employees affected by contingencies who have exhausted all their leaves.
  87. All the Banks to evolve and implement a scheme for periodical health checkup of all employees wherever it is not available.
  88. All employees shall be allowed reimbursement of Rs. 500 per year towards annual eye check-up
  89. A Committee will be formed to review other provisions of NPS in line with Central Government employees viz. regarding the Choice of Fund Schemes and Fund Managers.
  90. An additional amount will be paid as Ex-Gratia per month to all Pensioners.
  91. Monthly ex-gratia amount shall be paid in addition to the pension/family pension paid by the public sector Banks including SBI, to pensioners and family pensioners, who became eligible to draw pension on or before 31st October, 2022 including those who retired on 31.10.2022.
  92. Such fixed monthly ex-gratia shall be payable for the month of November, 2022 and onwards during the period 01-11-2022 to 31-10-2027.
  93. It has been agreed and already extended the benefit of 100% DA neutralisation for Pre- November 2002 pensioners.
  94. DA rates will be on a uniform basis of 100% neutralisation as in the case of employees/ officers/ pensioners/ family pensioners.
  95. Disciplinary & Appeal Regulations and procedure thereof – Comprehensive Guidelines on Discipline & Appeal Regulations will be brought out after mutual discussion within 3 months from the signing of this joint Note.
  96. Special compensatory provisions in respect of the State Bank of India for certain benefits as mentioned in the joint note, will be reviewed and settled at the bank level.
  97. LTC Monetisation Scheme covering airfare on the lines of some other Banks in the Industry, will be evolved for all Banks after further deliberations.

Similar circulars have been issued by the workmen’s unions also. One grievance is that workload and responsibilities have increased for workmen. As SBI had already done this the same is extended to all banks.

These details will be useful for the other trade unions which can follow the path.

The larger battle has to be for recruitment based on per employee-customer ratio which is 6 times higher in HDFC Bank in comparison to SBI. Both use the same technologies.

The other battle is going to be for the old pension scheme together with the Joint Forum of Govt employees.

The biggest battle is opposing privatisation which the present government is keen on but has slowed down due to strong opposition. With a change in the government, the battle can be won easily as promises have been made by the opposition.

Already many private banks and foreign banks do not follow and implement these settlements. If all banks are privatised that will be the end of negotiated settlements.

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Thomas Franco is the former General Secretary of All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.

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