The public sector bank employees can now expect a pay hike soon. Finance ministry officials have said that the talks between the Indian bankers' Association, the employee unions and the government are in the last stage of finalization. Government officials have indicated a huge tab of Rs 9000 crore for this fiscal alone.
This hike will be first in five years. Around eight lakh public sector bank employees are due for this pay revision.
After a discussion of around six months, the rate of salary hike is almost decided. The finance ministry officials said that nineteen state-run banks were expected to receive a hike of 17.5%.the pay hike will be effective till October 2012, which implies that annual hike of 17.5 percent will be repeated every year till 2012.
For the current year alone, the decided payout is a massive Rs 4800 crore. However SBI and its subsidiaries are not entitled to this pay hike since they are governed by a different act.
Apart from a raise in the salary, bankers are also demanding a pension option. This will further push up the tab. The government has indicated that the pension burden would have to be shared by both the banks and the employees and this would be done by adjusting a certain portion of pay hike for pension payouts. Banks would have to maintain provisions worth Rs. 6000 crore to meet the obligation of 2.5 lakh employees.
IBA is in favour of employees picking up 30 percent of the tab that amounts to Rs 1200 crore. The remaining 70 percent will be paid by bank managements.