The Indian Banks’ Association and unions have finally agreed to 15% hike in the salaries and 4% increase to pension contribution for nine lakh employees working for public sector banks and old private sector banks. This move will increase the annual wage bill of these employees by Rs 7,900 crore.
Earlier 10% of basic salary and dearness allowance (DA) of these employees used to go to their retirement kitty. But with the latest revision in pay structure, 14% of their basic and DA will be contributed towards pension.
Further, there is thrust on the introduction of performance-linked incentive with employees reporting over 5% rise in operating profits eligible to at least five days of basic salary and DA. The amount will be higher for banks that report higher operating profit, the Times of India mentioned in a report.
The pay hike will be applicable with effect from November 2017. But the contribution to the pension fund will not be given retrospectively.
This pay revision comes amid the pandemic and covers 8.5 lakh public sector bank staff and 50,000 old private sector bank employees.