Banks begin provisioning for wage hike

If you or your relative or friend is a bank employee, then there is good news coming. The salary of bank employees may increase soon. Big public sector banks have made preparations for employee salary revision from November 1, 2022. State Bank of India (SBI) chairman Dinesh Khara said that this wage settlement has ended in November 2022. The bank is preparing to make a provision of Rs 500 cr every month. The provisioning will continue till the time the higher salary is implemented.

On the other hand, the Finance Ministry has asked the Indian Banks’ Association (IBA) to initiate discussions on wage settlement. The ministry has asked IBA to complete settlement by December 1, 2023. If this salary agreement is approved by December, then the employees will start getting arrears immediately.

Provisions by these banks
SBI made a provision of Rs 1,494 crore during April-June for arrears. Since November till now, the bank has made a provision of Rs 3,984 crore for the arrears. Till June 30, Punjab National Bank has made a provision of Rs 743 crore, Canara Bank Rs 729 crore and Bank of India Rs 451 crore. Bank of Baroda CFO Ian D’Souza said that the bank has made a provision of Rs 460 crore for the arrears in Q1 FY24 while it has already made a provision of Rs 500 crore for FY23. That is, the total cumulative provision for arrears with the bank is Rs 960 crore.

Decision by December 1
Bank of India MD and CEO and IBA sub-committee chairman Rajneesh Karnataka said, “The Centre has given IBA time till December 1 to finalise the wage settlement with the unions.  I am the chairman of this committee, so I will not be able to say anything more than this.”

According to the circular issued by the United Forum of Bank Unions, an umbrella body of nine bank unions, in the formal bilateral meeting for wage revision for the 12th bipartite settlement with IBA, the unions have submitted a charter of demands, and the upcoming negotiations on revision of pay and service conditions are expected to be completed within a few months. He said that it is necessary to resolve the issues related to finalization of wage settlement and pension reform in a smooth manner with the unions.

No settlement for 3 years
The current wage agreement of public setor banks has ended on November 1, 2022. Now the government is talking to the union representing bank employees in this regard. Significantly, there has been a long conversation in the past regarding the increase in the salary of the bank employees. The last wage settlement was completed three years back in 2020. Under this agreement, there was an increase of 15 percent in the salary of the bank employees.