Banks and unions settled on a 17.5 per cent hike in the salary of 702,000 public sector employees, besides agreeing to make 332,000 serving and retired employees eligible for pension. State Bank of India employees association representatives, however, walked out of the wage settlement.
The wage hike would be effective from November, 2007 and would result in an additional outflow of Rs. 4,816 crore annually. This includes a sum of Rs. 2,239 crore for officers and Rs. 2,577 crore for workmen employees for five years. The outflow in case of pension scheme is estimated at Rs. 6000 crore annually.
Ending a 2-year long stand-off, IBA agreed on last Friday to bank unions' demands to hike wages by 17.5 per cent, which will aggregate to an annual increase of Rs 4,816-crore for the industry, besides allowing another pension option.
The total burden on commercial banks is estimated at Rs 25,000 crore for the agreement period. The annual profits of listed public sector banks in 2008-09 was Rs 32,530 crore.This is the second pension option for public sector banks and would cover 272,000 serving employees and 60,000 employees who did not opt for the scheme in 1993 and have since retired.
Those who join public sector banks from April 2010 would be covered by the New Pension Scheme with 10 per cent of their basic salary and dearness allowance deducted as their contribution. Banks would make a matching contribution.
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