Benefitting nearly 1 million employees of the state-run banks, old generation private banks and some large foreign banks, the bank unions and the Indian Banks’ Association (IBA) on Monday formally signed an agreement to increase salary and allowances by 15%. The wage revision is effective retrospectively from November, 1, 2012.

The wage settlement also includes a medical insurance scheme for the families of employees.

Following the wage revisions, the scale of pay of officer-level employees has been revised from Rs.14,500–Rs.52,000 to Rs.23,700–Rs.85,000, including special allowance and dearness allowance.

The scale of pay of workmen-non-subordinate has been revised from Rs.7,200–Rs.19,300 to Rs.11,765–Rs.31,540, while the scale of subordinate staff has been revised from Rs.5,850–Rs.11,350 to Rs.9,560–Rs.18,545, including allowances, IBA said in a statement.

On February 23, the parties had announced a deal under which employees would be given 15 per cent wage hike on pay-slip components, which will result in an additional salary burden of Rs 4,725 crore per year.

Under the February agreement, both the parties had agreed to settle all the pending issues in 90 days.

The agreement for which the employees have repeatedly struck work, says state-run bank employees will be able to get an off on alternate Saturdays.

This is a departure from the current practice, where employees work for half-day on Saturdays. To compensate for this, they have agreed to work full day on alternate Saturdays.

Wage revision in state-run banks is done every five years and the last was done in 2007.

Too many holidays

Meanwhile, the IBA feels that bank holidays declared under the Negotiable Instruments Act, 1881, by various States are ‘excessive’ and need to be rationalized.

After detailed deliberations, the members agreed that there was a case for implementation of a five-day week in banks.

This would require that clearing houses, RTGS/NEFT and currency chests are also closed on second and fourth Saturdays.

The IBA has already taken up the matter with the Reserve Bank of India seeking its consent to enable it to take up the matter with the Government and the Finance Ministry for issuing necessary Gazette notification. It was here that the IBA managing committee felt that holidays declared under the Negotiable Instruments Act, 1881, by various State Governments needed to be rationalised.

The committee felt that the IBA may take up with the Centre the case for rationalisation of bank holidays under the Act.

The IBA’s line of thought was given expression in a letter to the sponsor banks of regional rural banks, seeking their view on having second and fourth Saturdays as holidays and other Saturdays as full working days.

Their input will help usher in uniformity across the industry and ‘enable us at the earliest to proceed further in the matter,’ the letter said.

It went on to add that “we have already taken up the matter regarding rationalisation of bank holidays under the Negotiable Instruments Act with the Finance Ministry.

“We have also requested the Reserve Bank to consider suspension of clearing functions and RTGS/NEFT on second and fourth Saturdays and have full-day clearing services on other Saturdays like any other weekday.”