The 11th Bipartite wage settlement is underway between the Indian Banks Association (IBA), which is the association of Indian banks and Financial Institution and the United Forum of Bank Unions (UFBU), which is an umbrella of 9 unions of Bank employees. The 10th Bipartite wage settlement regulations came to an end in October 2017. Every five years the IBA and the UFBU sit together to fine-tune the wage revisions for the public sector bank employees. The IBA comes up with a corpus for the same. It is in the same line as Pay commissions, that the Central government comes up within every few years for all central government employees.
The IBA and the Bank unions have agreed upon a 15% hike over the base wage bill of 52,625 crore rupees, which is the cumulative wage bill of all the public sector banks and few private sector banks which took part in the negotiations. The IBA has formed two working groups, one to be headed by IDBI Bank CEO Rakesh Sharma and the other under Alok Kumar Choudhary, to clear the final hurdles in the negotiations regarding the distribution of the corpus among the officers and the workmen, and components such as HRA and annual medical aid. The corpus made available by IBA stands at 7,898 crore rupees.
It is an arduous journey every time, to come up to a settlement. This can be gauged from the fact that the 10th Bipartite wage settlement was agreed upon in May 2015 for a five-year period which was to start from November 2012 and was to last till October 2017. Both parties lobby hard and try to come up to a settlement which is just to the least, if not unfair for both parties.
The current journey can be traced back to 2018 when the IBA had proposed a meagre hike of 2% to the Bank Unions, which was obviously rejected by the Union and they went onto a two-day strike to show their anger over the same. IBA had cited the meagre hike over huge losses incurred in the past few quarters by the banks. This was shot down by the union, which slated higher provisioning towards Non-Performing Assets (NPA) by the banks as the major reason, for which they were not responsible.
The Union had demanded a hike of 25% during the initial round of negotiations and the IBA has taken its own sweet time to reach up to a settlement of a 15% hike over the base wage bill with the Union. This comes at a time when the pandemic is at its peak and banks are finding it hard to maintain their financials on account of moratorium extensions and higher provisioning due to the risk of increasing NPAs in the future. Nevertheless, the final settlement to the 11th Bipartite wage settlement has still some distance to cover before it sees the light of the day.
