SYNOPSIS

of
My Approach paper in pursuit of early settlement of 10
th
bipartite talks
between neotiatin unions in bankin in!ustry in In!ia " I#A throuh
bilateralism " social !ialoue$ %11& paes'
#y
S(Srini)asan
*etrie! #ank +nionist
Our ,eman! of Increase of -./ Is Absolutely 0ustifie! an! Sacrosanct
PA*1 I
O+* ,2MAN, IS 3A45+3 AN, 0+S1
The wage structure in the Indian banking industry a it stands today has been
arrived at through a series of steps which include a) Sastry award b)
modifications in the Sastry Award by Labour Appellate Tribunal Decision c)
the modifications made by Government modification order o! S"#$%&'%
dated August %()*+,( d) partial restoration of LAT decision after
incorporation of the recommendations of The -ank Awards .ommission in
the Industrial Disputes/-anking .ompanies Act )*+,,) e) further restoration
of LAT tribunal decision in respect of the banks in the former state of
Travancore 0.ochin banking en1uiry commission which were incorporated in
the Industrial Disputes / -anking .ompanies ) Decision Amendment Act
*+,'f2 modification made by the government in the dearness allowance
ad3ustment formula of 4ebruary *&)*+52) g) Desai award h) the first bipartite
settlement in #ctober *+55 and thereafter 6 settlements in the industry level
between negotiating unions and I-A ! The process of bipartism is still on in
the ongoing *2 bipartite negotiations!
Three distinct stage are visible in the process by which the wage structure in
the Indian banking system has been reached till 2ctober *+55) -ipartite
settlement!!! 4irst prolonged struggle between the banks and the employees
which ended with the acceptance of the 7Sastry Award as modified 7by both
sides !second the amicable acceptance of the 7Desai Award 7by both the banks
and their employees! Third) ushering in of new era of collective bargaining
with the 7#ctober *+558 Settlement which revolutioni9ed evolution of wage
accord bilaterally! These three stages also mark the natural se1uence through
which relationship between the management of a large industry and its
workers evolves into maturity!
*
:ach tribunal award certain modifications) in the wage levels !it ahs been
indicted that different awards were based on the different level of ;.<I !
:ach successive tribunal made ad3ustments to the increase in cost of living!
All the tribunals approache! the issue a!aptin the report of the
6ommittee on 5air 4aes7 A lare part of its conclusions was accepte! by
the Supreme 6ourt in the case of 28press Newspapers %Pri)ate' 3t!( an!
another )( 1he +nion of In!ia7 19.9 Supreme 6ourt *eport 1-7 19:1%1'
3abour 3aw 0ournal ;;97 they arri)e! at wae structure after comparin
the pre)ailin rates of waes in the same or similar occupations in the
same or neihbourin localities an! inflationary pressures as obser)e!
by the Supreme 6ourt in the case of 28press News Papers %Pri)ate' 3t!(7
an! another )( 1he +nion of In!ia an! others7 reporte! in %19.9'
Supreme 6ourt *eports7 pae 1- at paes &9 to 9;(
1he Sastry 1ribunal in consi!erin the pre)ailin rates of waes has
obser)e! that helpful comparisons coul! be ma!e between waes in
ma<or banks an! those in small banks7 between banks on the one han!
an! certain in!ustries on the other7 between the bank awar!s an! the
awar!s in insurance companies7 oil companies an! te8tile companies an!
that the rates of pay in certain !epartments of =o)ernment such as the
Posts an! 1eleraphs an! in State =o)ernments woul! also furnish
material for the construction of a pay scale for the bank workmen( It also
referre! to there port of the 5irst Pay 6ommission an! state! that there
were se)eral affinities between bank workmen an! =o)ernment clerks7
bank subor!inates an! =o)ernment menials( 1he Sastry 1ribunal has set
out the scale of pay for clerks in the ser)ice of the )arious State
=o)ernments an! also in the ser)ice of the 6entral =o)ernment
1he 3abour Appellate 1ribunal after referrin to the fact that the Sastry
1ribunal ha! set out in its awar! the total emoluments of a mi8e! batch
of in!ustries an! =o)ernment an! >uasi?=o)ernment institutions state!
that it ha! collecte! other material also( 1he 3abour Appellate 1ribunal
has thereafter set out the total emoluments payable to a clerk at the initial
start in-& !ifferent concerns(
After considering the emoluments payable in these
*! -urmah Shell $$$$ $$$$ *+,!22 %%(!5,
%! Standard $ =acuum $$$$ $$$$ *+2!22 %%(!5,
&! General >otors $$$$ $$$$ *'2!22 ? .losed down
(! 4ord >otors $$$$ $$$$ *,(!,5 ? .losed down
,! Gla@o Laboratories $$$$ $$$$ *5*!5+ *+%!&%
5! Imperial Tobacco $$$$ $$$$ *+,!22 %%,!22
%
'! Aindustan =anaspati Aindustan
6! Lever -rothers $$ Levers *'(!6' %%2!22
+! Bnited Traders
*2! Tata #il >ills $$$$ $$$$ *,(!,5 *'6!5,
**! =olkart -rothers /=oltas) *&,!22 *6&!52
*%! Greaves .otton $$$$ $$$$ *,(!,5 *+&!,2 /Bnder
appeal in
Supreme .ourt)
*&! Swastik #il >ills $$$$ $$$$ *(+!,5 *'+!',
*(! Larsen C Toubro $$$$ $$$$ *5*!*% *+2!65
*,! Grahams Trading .o! $$$$ $$$$ *,(!,5 *56!,(
*5! Imperial .hemicals $$$$ $$$$ *&+!22 *'5!22
*'! Tata Industries *%2!22 $$$$ $$$$ ot available
*6! Associated .ements $$$$ $$$$ *&6!22 *5+!22
*+! #riental Assurance $$$$ $$$$ *%(!,2 *,(!&+ ow part of Life
Insurance .orporation
%2! "eserve -ank of India $$$$ $$$$ *(%!,2 ? Bnder ad3udication
%*! -ritish Insulated .alenders *&6!22 *'6!22 .ables Ltd! /Indian .ables)
%%! -ombay Gas .o! *%,!22 $$$$ $$$$ ot available
%&! 4ortes) 4orbes .ampbell $$$$ $$$$ *,*!22 *5*!%,
oteD $ :@isting dearness allowance in the concerns in -ombay is calculated on
-ombay consumer price inde@ slab /(**$(%2) for 4ebruary *+5* at (%2 -ombay
inde@ number when the corresponding all$India consumer price inde@ with base as
*+(+) was *%&!
1he ,esai awar! affirme! in black in white in para .(1&1( @a)in
consi!ere! all aspects of the matter7 I am of the )iew that to the e8tent
that pre)ailin rates of waes in similar occupations in the same localities
play a part in the fi8ation of waes7 the workmen ha)e ma!e out a case
for an upwar! re)ision of their emoluments!E
The ma3or increase in wage levels occurred as result of Desai award! The
increase in the minimum wage for clerical staff varied between 5,$',F and of
the sub staff between *2' to *%% F according to class of banks and its area of
location! After the Desai award the average real basic wage rose sharply in the
Indian scheduled banks by (%F and in the foreign banks by &*F!
-y *+5, the real basic wage was only &%F higher than the *+,' level in the
Indian scheduled banks and %&F in eh foreign banks
The #ctober *+55 settlements brought about further increase in the level of
wages! The minimum basic wage for the clerical staff increased by an average
+F and for the subordinate staff by slightly lower rate! The settlement resulted
&
in increase in the real earnings! The increase for the clerical staff was *,!&F
in basic wage) %+!&Fin total pay and &&!+F in total emoluments! :ven this
first bipartite settlement wages wee fi@ed after comparing the pre)ailin
rates of waes in the same or similar occupations in the same or
neihbourin localities an! inflationary pressures as observed by the
Supreme .ourt and report of fair wages committee) methods adopted by
earlier tribunals 1uoted above!
In *+55 settlement I-A agree to the wage settlement after comparing with
scales of pay) D!A formula) other benefits prevalent In .entral Government
:mployees) Insurance .ompanies) Leading <harmaceutical .ompanies
.ement .ompanies! /See pae 101?-A1 of 1he *eport Of 1he National
6ouncil Of Applie! 2conomic *esearch New ,elhi On 4ae Structure In
In!ian #ankin Publishe! #y None Other 1han 1he In!ian #anks
BAssociation7 #ombay On 1&
th
April 19:9( 5orwar!e! #y 1he 1hen
,eputy 6hairman 5(C(5(Nariman(
In other wor!s e)en in the 19:: bipartite settlement waes of the bank
employee were to some e8tent in tune with waes in similarly
circumscribe! concerns(
It further un!erscores that waes of the bank employees were fi8e! on
comparati)e stan!ar!s applicable to central o)ernment employees7
insurance employees an! other in!ustries(
The study based on agreements of ma3or <ublic Sector Bndertakings in India and
a comparative study with bank employees was published by Shri! Arvind
Shrouti on behalf of >aniben Gara Institute /A>S) in Huly *++*will unveil the
truth! The following undertakings are covered in this study$
(
Sr! o! ame of the Bndertaking Abbreviations
*!
%!
&!
(!
,!
5!
'!
6!
+!
*2!
**!
*%!
*&!
*(!
*,!
*5!
*'!
*6!
*+!
,
the
<ay .ommission
ationalised -anks
-harat :arth >overs Limited
-harat :lectronics Limited
-harat Aeavy :lectricals Ltd
.oal Industry
Aindustan Aeronautics Ltd
India 4armers 4ertili9ers .oop! Ltd
India Trade <romotion #rgani9ation
Indian Tourism Development .orp! Ltd!
Life Insurance .orporation
>adras 4ertili9ers Limited
>other Dairy
>ahanagar Telephone igam Ltd
ational Thermal <ower .orp! Ltd
#il India
#il C atural Gas .ommission
<orts C Docks
"eserve -ank of India
III
-anks
-:>L
-:L
-A:L
.#AL
AAL
I44.#
IT<#
ITD.
LI. >4L
?
>TL
T<.
?$
#G.
?$
"-I
I give below the genesis of this very informative thought provoking study
which will provoke the conscience of the bank employees that we they did not
get fair deal in wage revisions right form *++* onwards! These historic
blunders cascaded during the subse1uent wage revision too) widening the
disparity of bank employees with comparable peers like central government)
insurance) "-I employees) leave alone other <SB undertakings tilting the
scales of 3ustice of the doctrine of e1ual work e1ual pay!
SI=NI5I6AN1 5IN,IN=S AN, ANA3YSIS O5 1@2 S1+,Y
;hen one compares the minimum wages paid in various <SB8s on finds a
good deal of variation! ;ages vary not only with the level of skills of the
employees but also with the industries or units!
,
As far as the 1uantum of wages in these units is concerned one finds that
wages in the -anking industry at the recruitment stage are low for sub staff
i!e! "s! ,*&& p!m! at %522 .<I! ;hile for the same level wages paid in I44.#
are very high "s*%&&'! The wage disparity ratio at the said level is *D%!(2!
The average total wage of sub staff at the recruitment level is "s +&55! At the
%,
th
stage is the lowest i!e! "s*2&'2 C and >#TA:" DAI"J is Aighest i!e!
*+6(2!
;ages for clerical staff at recruitment level on %522 .<I again bank is the
lowest i!e! "s!,,'+) while for the same level wages paid in I44.# are very
high i!e! "s! *+2''! The wage disparity ratio is *D(% at this level! At the %,
th
stage of clerical staff AAL is the lowest) i!e! "s! *6(&2 C #G. is the
highest! i!e! "s! &&(,,! The average wage for clerical staff at recruitment level
is "s!*%*+(! Aere again in most stages bank employees are paid less than the
average!
At one time #ankin In!ustry was the secon! hihest payin
oraniDation %clerical ra!e Eat hiher staes' within PS+Fs( #ut now that
is not the case( At hat time in most of the PS+FS a flat rate ,(A( was in
e8istence an! )ery few un!ertakins ha! !ouble linkae ,(A " an! #ank
was one of them (Now mostly all PS+FS ha)e !ouble linkae ,(A scheme
with 100/ neutraliDation at al le)els(
Average A"A for sub staff in -anking industry is "s!&(, which is lowest
while at the same level #IL IDIA is the highest i!e! "s! *+5%! 4or the clerical
grade also the situation is the same! The reason behind such scenario is the
rate of A"A! In -AGIG industry the A"A is paid K 6!,F while in most
of <SB8s this rate is &2F/A L cities)
#ther allowances paid in most of the <SB8S are very high as compared to
banks! The average of total allowances in banking industry is "s '%& while for
the same level it is "s!(,(( in >#TA:" DAI"J! This is also one of the
ma3or factors contributing to huge wage disparity between banking sector and
other <SB8s!
There is no much increase in real wages of -ank employees as compared to
other <SB8s! In the period of last *% years the wage growth in -AGIG
industry is nearer to growth in AI.<I! In short the real wages are maintained
in banking industry! ;hile in other <SB8s there is a fantastic raise in real
wages!

InferenceD bank employees are high wage island is a canard! #ur charter in the =III
-ipartite ;age "evision is therefore 3ust and right!
5
As on 01&?-01; the comparison in monthly salary between central o)ernment an! bank employee is i)en below
MONTHLY SALARY OF !NTRAL "O#!RNM!NT STAFF AN$ %AN& STAFF 'OTH!R THAN OFF(!RS)
AS ON *+,*-,.*+/ 0 A OM1AR(SON
Garious
6omponents
of Monthly Pay
6entral =o)t(
Staff
'in 1ay %and 0+)
Sub?staff in
#anks
6entral =o)t(
Staff
'in 1ay %and 0
.)
6lerical staff
in #anks
=ross Monthly
salary
1&7-9- 1;7:H0 ;;79-0 1:7:HH
In respect of officers the disparity stand more pronounced as the following cogent) pellucid reasoning and statistics will reveal!
MONTHLY SALARY OF CENTRAL GOVERNMENT OFFICERS AND BANK OFFICERS AS ON 01-08-2013
A COMPARISON
=arious .omponents
of >onthly <ay
.entral
Government
#fficers (in P!
Bn" 3
S#$% I&
-ank #fficers
in H>GS I
.entral
Government
#fficers (in P!
Bn" 3
S#$% II&
-ank #fficers
in >>GS II
.entral
Government
#fficers (in
P! Bn" 3
S#$% III&
-ank #fficers
in >>GS III
=ross Monthly salary .H7A&0 ;-71A1 :H7AH: H;7;H. A;7H&0 .A70;
'
<rior to *+'+) Group 7A8 #fficers of .entral Government were earning
less than bank officers! In *+'+) the <illai .ommittee was constituted to
study the salary structures of bank officers and Group 7A8 #fficers of the
.entral Government and bring e1uity among various banks!
The .ommittee observed that the functions and responsibilities of bank
officers in the new set$up were comparable to those of Group 7A8
#fficers in the .entral Government and suggested pay parity between
them!
The <illai .ommittee recommendations were implemented in banks with
effect from Huly *) *+'+) and the pay scale of the lowest rung of officers
in banks were e1uated with pay scales of the lowest rung of Group 7A8
#fficers of .entral Government at "s '22!
The parity which was established by implementing the <illai .ommittee
"ecommendations was distorted by subse1uent <ay .ommission
revisions! In the Si@th <ay .ommission) the wages of Group 7A8 #fficers
9oomed past the bank officers8 wages! :@ternal relativity was given a
1uiet burial!
It is 1uite appropriate to compare the salary of bank officers with Group
7A8 #fficers of the .entral Government to ascertain whether bank
officers constitute a high$wage island!
The basic pay according to the 4ifth <ay .ommission for Group 7A8
#fficers was "s 6)222 and the corresponding pay for bank officers was
"s ')*22! -ut in the Si@th <ay .ommission the basic pay for Group 7A8
#fficers of the .entral Government went up to "s %*)222 /basic pay "s
*,)522 L grade pay "s ,)(22) whereas the pre$revised basic pay of bank
officers was only "s *2)222!
-etween the 4ifth and the Si@th <ay .ommissions) the basic pay of
Group 7A8 Government officers went up by *5%!, per cent!
The gross salary of government officers was "s &*)&*%) whereas the
bank officer8s salary was only "s *5)**2! It can be seen that a bank
officer draws a gross salary which is 3ust ,*!(, per cent of the gross
salary of Group 7A8 officers at the lowest rung!
6
:ven house rent allowance was paid at &2 per cent of basic pay for
government officers) whereas bank officers were getting a ma@imum of
6!, per cent in metros! The pre$revised salary of the bank clerk was "s
5)522 as compared with the .entral Government clerk8s salary of "s
**)222!
>any State Governments have adopted the Si@th <ay .ommission
"ecommendations! A number of public sector undertakings have
implemented the <ay .ommission recommendations as a benchmark for
their salary revision!
The .entral Government :mployee gets the pension ,2F of the his
average emoluments per of the last month before his Superannuation
from the consolidated fund from the Government of India who 3oined
before %22( while the bank :mployee does not get it from the
consolidated fund of Government of India!
4or the .entral Government :mployees in the past) the revised scales are
close to &22F /& times) every time) in the *2 years cycle! In case of
bankers) the revised scales are *,2F /*!,2 times) after revision once in ,
years! Thus in each cycle of *2 years) the revision amounts to %%,F
/%!%, times) for bank staff! <recisely because of this reason) our wages
have consistently come down relatively! Today) we have sunk to the
bottom) from the top position we en3oyed &2 years ago!
#ur A"A when compared with .entral Government staff C and <SB the
system rates /varying from *2F to &2F of the revised basic pay)! "ight
form ,
th
bipartite onwards is the lowest
If we compare the limited working hours a day and , day week for
central government employees ) officers in particular bank officers need
to be paid additional amount for the e@t
It is pertinent to mention here that '
th
<ay .ommission has been
constitute for revision of salaries of central government employees)
whereas bank employees are yet to catch the salaries they are getting as
per 5
th
<ay .ommission report
+
:ven with %,F hike we will 3ust be inching towards some semblance of
parity with pay of government employees if we evaluate the pro3ected
salary in anvil in the wake of 'the pay commission
<ublic sector banks practically government institutions today as could
be seen form the additional au@iliary work performed by bank
employees which was hitherto performed by government employees
In view of the aforesaid principles laid by Indian 3urisprudence approved
by awards) followed even in the first bipartite of arriving pay after
drawing comparison with other similarly placed industries ) our demand
of %, F hike in pay slip which restore semblance of parity with central
government employees se1uel to si@th pay commission and the
principles adapted by the learned members the commission in fi@ing
these scales ) is fair 7 <ust meets en!s of <ustice an! shoul! be seiDe!
form unyiel!in han!s no hol!s barre!
NO12I The demand of government employee or employees of financial sector
including -anking ) for that matter any section of the working class for 3ust
wages and service conditions has antimonopoly content and therefore they are
not non$antagonistic! #ur interests and that of government employees are
complementary and not contradictory! ;e wish to underscore here that
government employees deserve further and assure them of bank employees8
solidarity to their 3ust cause in tune with our slogan '()*in$ +,-- .ni#!
/in"0"M 4or further improvements and value additions in the '
th
pay
commission! or do we envy Government :mployees getting better share of
wages in the 5
th
pay commission! All that we are emphasi9ing and demanding is
semblance of parity with the .entral Government :mployees wages as on date
as the .entral Government which the real owner of the <ublic Sector -anks in
India as a model employer is duty bound like all organs of State should be
committed to the Directive <rinciples of State <olicy and Article &+ which
enshrines the principle of e1ual pay for e1ual work

1he )olume of an! )arieties of work han!le! by bank employees are
beyon! comparison(
<ublic sector banks are re1uired to perform all types of non productive
work such as payment of pension) old age pension) >A":GA
payment) teacher salary payment) ta@ collection) shoulder the
responsibility of target for 4inancial Inclusion fi@ed by the government!
*2
"ecently The <rime >inister has already sent '!%, lakh emails to bank
officers informing them about the financial inclusion scheme <>HDJ)
which he had announced in his Independence Day address to the nation!
The <>HDJ has been conceived as a national mission on financial
inclusion with the ob3ective of covering all households in the country
with banking facilities and having a bank account for each household!
Transcending the vision of the honorable <rime >inster into reality will
involve bank employees working beyond working hours and even on
Sundays as per the targets set by the respective banks higher echelon
which the conscious bank employees perform without demur without
any additional compensation albeit the fact remains such a oal is har!
to achie)e7 is costly an! un)iable an! will create hue stresses in the
bankin system(
It is also an irrefutable fact that !urin last two years banks ha)e
opene! more than .000 branches in rural areas without a!!in
number in their total manpower( #usiness of banks ha)e almost
!ouble! without any increase in total number of staff (In the name of
5inancial e8clusion 7 manaement of each bank is busy in makin
effort to please minister an! forcin a)ailable staff to work in late
hours an! on Sun!ays an! holi!ays( As such bank staffs are facin
Social 28clusion in their effort to et success in 5inancial Inclusion(
To add fuel to fire public sector banks did not make any employment or
made negligible recruitment since *++* due to which average age of
bank employee in <S banks is more than (, which having deleterious
effect to cope with this e@tra workload!
If the working hours) leave and holidays of bank staff and ground
realities are taken into account) bank staff in fact deserve much more
than the salaried class of people from any other part of the society! If the
risks and responsibilities) link failures and late sitting are taken as the
yardstick) 1)i-* ,,('n+%2 of not less than &2F of the -asic <ay must be
paid to all bank staff!
An overstretched business plan and over e@erting pressure on clerical
strength due to continuous depletion) if the present trend continuous will
naturally reach a breakpoint! If we take into consideration that 62F of
staff are above (, years) marketing of business strategies) may get
affected under the weight of work pressures due to age related problems!
**
1he a)erae inflation of In!ia in -00:I .(A9 / rose to 10(9- / in -01;
%SeeI SourceI In!ia7 Ministry of 5inance7 Monthly 2conomic *eport7
,ecember -01-' an! the inflation In!ia is the hihest as abo)e table
re)eals(
See
httpDNNwww!inflation!euNinflation$ratesNcpi$inflation$
%2*&!asp@Osthash!GloA>Hr1!dpuf
4ith the o)ernmentJs failin miserably to curb inflation un!ertakin
control of inflation reforms 7!espite pool promises an! policy
pronouncement while in power there is stron case ma!e by us to the
=OG2*NM2N1 JI#A consi!erin our <ust !eman! of -. / increase
7more so when waes in other countries in the table is for abo)e the waes
pai! in In!ia 7 !espite their lesser inflation rates 7 especially when the
lobaliDation 7 3P= rhetoric are buDD wor!s an! mantras of the successi)e
=o)ernment in power since 19917 in respect any factors 7inclu!in
!enationaliDation 7 merers " ac>uisitions 7 In!ian banks to achie)e
lobal stan!ar!s etc 7blah7 blah Kblah (( etc7 etc(( (( L( in In!ian economy(
@2N62 O+* ,2MAN, IS 3A4A5+3(
*%
PA*1 II
O+* ,2MAN, IS 6OMM2NS+*A12 4I1@ 1@2 IN6*2AS2 IN O+*
P*O,+61IGI1Y AN, 255I6I2N6Y
In all the previous settlements salary increase was given a load to total
establishment e@penses! In this wage negotiations we have been offered on
fi@ed pay components !As against the total establishment e@penses of "s!,5%+%
crores the pay slip component is only "s!&*,2& crores!
In other words pay slip component N establishment e@pense P ,,!+5F
;e shall now e@plain the concepts pay slip cost and establishment cost on
reverse logic terms in the +
th
bipartite I-A offered /for award staff) "s %,''
crores or *'!,F of establishment cost!
#ut of which amount allotted to pay slip components is "s!*,*( crores or *2!&
F /appor@!)
Therefore the formulae for conversion factor from pay slip cost to
establishment cost works out to *'!, divided by *2!&) which is e1ual to *!'2!
Applyin the abo)e re)erse loic we can construct the followin table for
easy un!erstan!in(
,eman! Payslip
cost in
/
Payslip cost
in *s( %in
crores '
2stablishment
cost in /
2stablishment cost
in *s
% in crores'
I#A last offer 11/ ;H:. 1&(:9/ 10.-0
+nions !eman! -./ A&A. H-(H& -;91-
,ifference %for
which
stalemate
continues '
1H/ HH10 -;(A9 1;;91
ow we revert back to Table A which I am once again reproducing to 3ustify
that our demand is achievable!
*&
5O* 1@2 P2*IO, -00:?-00A " -011?-01-
-00:?-00A
%in *s(6r('
-011?1-
%in *s(6r('
Increase
in /
6A=*/
Deposits *++(%22 (&'%+6, **+!%6 %*!'F
Investments 55(6,5 *&%6,&( ++!6% *6!+
Advances *((2*(5 &&2,5&% *%+!,& %&!*
Total -usiness &(&(&(5 '5'65*' *%&!,6
Int!income *5(*6, &55&*6 %%&!** %%!%
Int! e@pended *2*+52 %&**,& *%5!'2 %%!'
et int! income 5%%%, *&,*5, **'!%* %*!(
-usiness per
employee /in
"s!Lakhs)
('*!*6 *2*&!5& **,!*%
<rofit per
employee /in
"s! Lakhs)
%!'5 ,!+& **(!6,
Source "!-!I
I will now e8plain by means of 1able #7 6 as how our !eman! of -. /
hike in pay slip constitute only infinitesimal percentae of business mi8 7 in
other wor!s )alue a!!e! by labour between -00: to -01- (
1A#32 #
-011?1- Pay slip
-./
2stablish
ment /
Increase o)er
-00:?-00A
Pay
Slip /
2stablis
hment
/
1otal
#usiness
A:A&:1A 0(10 0(;1 (%((%'* 2!*6 2!,5
Interest
income
;::;1& -(1H :(.- %2%*&& &!6+ **!6%
Interest
e8pen!e
!
-;11.; ;(H0 10(;H *%+*+& 5!2+ *6!,2
Net
interest
income
1;.1:. .(&- 1A(:9 '%+(2 *2!'+ &%!'6
1A#32 6
*(
%6onstructe! on the !ifference between I#A offer an! +nions !eman!'
Pay slip
-./
-011?1-
2stablishment
6ost /
-011?1-
Increase
business
Pay slip/
Increase
business
2st( cost /
1otal #usiness 0(0. 0(1A 2!*2 2!&*
Interest
income
1(-0 :(.- %!*6 5!5%
Interest
e8pen!e!
1(90 .(A9 &!(* *2!&5
Net interest
income
;(-: 9(90 5!2( *6!&,
1akin into account 2stablishment e8pen!iture for -011 is .:-9- cr7
out of which the pay slip component is *s(;1.0; crores( 1he increase
of -./ souht by us to awar! staff as per con)entional !istribution
wae loa! %.H/ to awar! staff' when arri)e! as a percentae of
total business mi8 for -011?-01- will work out a mere 0(0H/7 0(0&/
of Interest income7 1(;./ of Interest e8pen!e! an! -(;1/ of Net
interest income which by any stan!ar!s is not only fair but <ust an!
riht(
Is not percentae of total business mi8 for -011?-01- which work out
a mere 0(0H/7 total business mi87 0(0&/ of Interest income7 1(;./
of Interest e8pen!e! an! -(;1/ of Net interest income for the )alue
a!!e! by labour by sweat7 toil7 !e)otion an! !e!ication a mere
pittance an! cannot be !enie! is >uestion to be pon!ere! by stake
hol!ers(
1here are reports in news papers that soon after Prime Minister
launche! the scheme Pra!han Mantri 0an ,han Yo<ana on this
in!epen!ence !ay Sources in the finance ministry sai! that the PMO
is keepin a watch on banksM risin NPAs7 estimate! to be *s - lakh
crore(
S(.)+%3 S%%3 DNA Friday4 25 A.$.-# 20164
*,
7##8399''':"nin"i:+(;9in"i9)%8()#-"!-1-(<-8;-n)%n")-;("i---
;n#)-#(-%n"-<inn+i,-.n#(.+70i,i#!--%%--1=-+)()%-0n*-++(.n#--
+)%#%"-2016==6&
In absolute terms our !eman! of -./ increase in pay slip
components it will work out measly ;A(&.//( if we calculate on the
!ifference between I#A offer an! unions !eman! for which
stalemate persists it will infinitesimal fiure of -- /7 which the
bank employees E 1@2 P2*5O*MIN= ASS21S assures the
=o)ernment they will reco)er from the !efaulters no hol!s barre!
in e8press time( 1hat is the reason we a)er that our !eman! is
sacrosanctN
*20261ION O* NON 6ONSI,2*A1ION O5 O+* 0+S17
*2ASONA#32 ,2MAN, #Y 1@2 =OG1J I#A 6OM#IN2 IS
M2N,A6IO+S7 P2*5I,IO+S AN, P*2POS12*O+S(
*5
PA*1 III
S1OPN ,AY 3I=@1 1@2 =*2A1 IN,IAN #ANC *O##2*YN
*26OG2* 5*OM #I= ,25A+312*S AN, 5OO1 O+* 4A=2 #I33
5INAN6IA3 *25O*MS$7 BNPAFS " S6AMS A*2 3IC2 AN O#0261
AN, I1S S@A,O4SN ,2NYIN= 0+S1 4A=2 *2GISIONS
2conomic 1imes #ureau recently on 0un 107 -01H7reprte! that 0ust fi)e of
the -A o)ernment owne! banks presently ha)e net non?performin assets
below -/7 he pointe! out( 1he !e)elopment is sinificant as the In!ian
economyMs rowth slippe! from H(9:/ in -01-?1; to H(A/ in -01;?1H7
lea!in to a ;:/ sure in ross NPAs reporte! by banks in the perio!( #y
March -01H7 ross NPAs in banks stoo! at nearly *s -(H lakh crore #n
4riday) Huly ,) %2*&) almost all the leading news papers reported that ;rite #ff
IS >ore Than "eal "ecovery of -ad Loans in -anks Public sector banks are
writin off more loans than they reco)er7 !espite repeate! a!)isories from
the finance ministry( In the fourth >uarter of the last financial year7 of the
-: state?run len!ers7 as many as 1A banks ha! written off more loans than
they reco)ere!(
QThe write$off by these *' banks in the Hanuary$>arch 1uarter of %2*%$*& was
higher than the write$off by all the %5 public sector banks in %2**$
*%!According to data compiled by the finance ministry) *' public sector banks)
including big lenders like State -ank of India) -ank of -aroda and <un3ab
ational -ank) had written off loans worth "s *2)''' crore in Hanuary$>arch
1uarter) while the recovery was "s ()*'% crore during this period( During %2**$
*%) public sector banks wrote off loans worth "s %)&22 crore) while the
recovery was "s (')622 crore(
1he issue has alarme! the finance ministry7 which in a note to the banks7
hihlihte! the practice an! remin!e! them the issue was raise! as early
as 0uly -00: an! was reiterate! in March this year( 1he issue was raise!
!urin a meetin of bankers with former 5inance Minister P
6hi!ambaram( A loan is written off after makin 100 per cent pro)ision7
which hits bankFs profitability( @owe)er7 this also helps banks to show
lower ross NPAs( #anks7 particularly the o)ernment?run ones7 are facin
hea!win!s as far as asset >uality is concerne! ami! economic slow!own(
Not only ross an! net NPAs of public sector banks are hiher than that of
*'
their pri)ate sector counterparts but these banks also share hiher bur!en
on restructure! loans$(
As per "eport of the .entral -oard of Directors on the working of the
"eserve bank of India for the year ended Hune &2) %2*& submitted to the
.entral Government in terms of Section ,&/%) of the "eserve -ank of
India Act) *+&() in scheduled commercial banks the =ross NPA to
=ross A!)ances which -(9 in -01- increase! to ;(H( 1he Net NPA to
Net a!)ances for the same perio! increase! form 1(- to 1(.!
The bad loans in <S-s has increased from "s &+)222 crore in >arch
%226 to "s *)5()222 crore in >arch %2*& and the bad loans restructured
and shown as good loans accounts to "s &)%,)222 crore!
#f the restructured loans) "s %) '2)222 crore was in favour of corporate
borrowers! If we include the bad loans in the private banks and foreign
banks and other financial institutions) the total bad loans are more than
"s %),2)222 crore
The provisions made for bad loans from the profits earned by the -anks
has been growing and it has show a growth from "s **)*%* crore in
%226$2+ to "s (&)*2% crore in %2*%$*&) accounting to a total of "s
*)(2)%55 crore as provisioning in the five years!
A list of top ,2 loan defaulters) mainly the corporate firms) whose total
default amount to the banks is allegedly to be around "s (2),%6 crore!
In a period between %226 and %2*&) the banksR gross profit before
provisions for bad loans was at "s &),6)6+& crore) of which the
provisions made for bad loans was "s *)(2)%55 crore leaving the banks
with net profit of "s %)*6)5%' crore!
>eanwhile) the provision coverage ratio has been falling) making the
banks more vulnerable and susceptible to risks against loan losses and as
compared to the provision coverage ratio of 56 per cent as on >arch &*)
%2*%) it has reduced to 5% per cent by >arch &*) %2*&!
SAccording to "-I) the ratio in the entire banking system has fallen from
,, per cent to (, per cent while the global average ratio is '2 to 62 per
cent
*6
4ormer finance minister >r! .hidambaram accepted that at least %*,
pro3ects with investment of "s ' lakh crore have been delayed in the
infrastructure space! -anks have disbursed around "s ,()222 crore loans
towards these stalled pro3ects! #f the *%5 new pro3ects worth "s &!,,
lakh crore) banks have sanctioned "s (&)222 crore as loan
*eser)e #ank of In!ia %*#I' ,eputy =o)ernor C 6 6hakrabarty
sai! banks ha! written off *s 1 lakh crore in the past 1; years an!
criticise! the len!ers because as much as 9. per cent of these write?
offs were for lare borrowers!
QDuring the past *& years what we see is that the banking system as a
whole has written off more than "s * lakh crore in advances)E
.hakrabarty) the senior$most of the deputy governors at "-I) said!
Ae said over +, per cent of such write$offs have been observed in the
case of big accounts and e@pressed anguish that public discourse focuses
only on the government8s agricultural debt waiver scheme of %226!
Q;e only talk about the debt waiver of the agricultural borrowers) we
donRt say big players and of this /"s * lakh crore) +, per cent are all big
borrowers and it has been written off)E he said!
@a)in earne! a ross profit of *s(171-7-90 crores O-011?1-P7 the
present offer of I#A is too meare as aainst our minimum !eman!
of -./ on pay slip components as e8plaine! in <ustification H of this
article with the stalemate offer of I#A bein 11/
%*s;H:.crores'our !eman! of -./ to be met is % *s(A&A.crores ' 7
the cost analysis of !eman! is meare &/ of the ross profit ! After
setting apart this negligible percentage from out of the profit earned to
the hard working bank employees) the balance can be diverted towards
providing bad debts and other purposes prescribed by the Aon8ble
4inance >inister! Do we not deserve a small share of profits to meet our
legitimate demand of reasonable compensationT ;hen the responsible
reply does not come forth) should we not conclude that the Government
policy is profiting the private by allowing the banks to decay through
demoralising the staffT
Adding fuel to fire) the statement of former 4inance >inister in the
meeting) at the '6th foundation day of Indian #verseas -ank) painted a
*+
picture that the entire profit earned are to be set apart for the wage
increase for the -ankmen when public sector bank employees went on
a two$day strike today seeking 3ust share wages ! 4inance >inister <!
.hidambaram said the profit of banks cannot be used only to enhance
salaries because there are other obligations! The e@pressions of the
former 4> is really unfortunate and a provocative one!
The banks) which refuse higher wages to its employees) waived bad
loans of big corporates causing severe loss to the banks! ;hile the <As
of big corporates were ignored or waived) the small defaulters were
made to suffer with punitive action! Then why are we being asked to
participate in their insincere crocodile tears for the efficiency and
profitability of the <ublic Sector banks !especially when The
productivity per employee) the business per employee and branch and
profitability of the public sector banks has enhanced many folds!
S#ank loan write?off is an in!ustry by itself( 1he write?offs are )ery
systematic an! scientific( as socially conscious citiDens we hol! the
)iew unanimous that employees cannot be hel! responsible for the
banksM ba! loans(
As per the data published by a leading employees union the <A of top
,2 corporate defaulters in this country is estimated to be *s(H07 .-&
6rore( 2)en if 19(H;/ is reco)ere! it is sufficient to meet our
!eman!s
And finally amount is If the four defaulters of the country
Ui!e!V Gingfisher Airline /whom some banks have declared recently as
wifuldefulter) "s!%5'& crores) ;insome Diamond and Hewellery .o!)
Ltd!) "s!%552 crores) :lectrotherm India Ltd!) "s!%%** crores and Woom
Developers < Ltd!) "s!*6*2 crores amounting "s!+&,( crores would also
suffice the minimum demand of "s! '6',cr as 3ust wage revision to the
entire -anking workforce!
-y initiating the following steps) we can easily find necessary resources
to meet all our 3ust demands) without costing the e@che1uer! There must
be a time bound action plan for enforcing them!
a) Strengthen the recovery tools and legal mechanisms) 1uicken the
process time and cut down the delays!
%2
b) >ake the .D") #TS under .ompromise route and ;riting off more
transparent) accessible to general public through voluntary
disclosures and get them covered under "TI!
c) <ublish the photographs of the defaulters in all national websites $
respective lending banksNfinancial institutions) "-I) .I-IL) "ating
Agencies) S:-I and >.A!
d) Stop lending further to the borrowersNinstitutions blacklisted!
e) -eyond certain amount of "eal Account Liability /say) "s!*2!22
.rores)) banks must be allowed to sell the properties mortgaged) after
following due process of law) without the intervention of courts and
without even resorting to action under SA"4A:SI Act! -ut) it must
be ensured that <rinciples of :1uity and <rinciples of atural Hustice
are followed!
f) Ade1uate incentives and compensation must be given to the banks for
lending under government schemes
g) In case of massive loan waivers) banks must be compensated upfront
/i!e! funds must be provided beforehand to the banks
h) Publish the list of bank loan !efaulters of *s 1 crore an! abo)e7
make willful !efault of bank loan a criminal offence7 or!er
in)estiation to probe ne8us an! collusion7 amen! reco)ery laws
to spee! up reco)ery of ba! loans an! take strinent measures to
reco)er ba! loans!
i) Tighten wilful defaulter norms and classify other group units and
management being termed wilful defaulters!
3) Do not incentivise corporate delin1uency!
k) Devise and Grant incentives tangible /cash) and intangible /fast track
promotions) soft postings etc!!!) to staff augmenting recoveries of
<A!
%*
PA*1 IG
O+* ,2MAN, IS *2ASONA#32 AN, A6@I2GA#32
The Guardian -ritish national daily newspaper published on %'$%$%2%
some startling revelations with regard wages paid in public8s sector vis$
X$vis private sector in B!G!
Q<ublic sector workers are more skilled) work shorter hours and earn
more money than their private sector counterparts) according to a new
analysis of the differences in pay out today!
-ut) if you have a degree) you will get paid better in the private sector $
and) for five out of eleven years of data published by the #ffice for
ational Statistics) the private sector got better pay increases!
-ut) if you have a degree) you will get paid better in the private sector $
and) for five out of eleven years of data published by the #ffice for
ational Statistics) the private sector got better pay increases!
The key facts areD
In %2**) public sector employees were paid on average between '!'F
and 6!'F more than private sector employees
The public sector is made up of a higher proportion of higher skilled 3obs
0 widening over the last decade as lower skilled 3obs have been
outsourced from the public to the private sector!E
The public sector consists of a higher proportion of older employees and
earnings tend to increase with age and e@perience
SourceD httpDNNwww!theguardian!comNnewsNdatablogN%2*%NmarN%'Npublic$
private$sector$pay
%%
;ith The main mantra L<G policies argued by protagonists and by
successive governments in power being global competitiveness) global
brand) and global standards! etc! I hope they may take leaf from this
article and adopt similar progressive wage structures in Indian <ublic
Sector 0 described as temples of modern India by <andit Hawaharlal
ehru and to its employees!
1hese proressi)e thouhts were echoe! by the former *eser)e
#ank of In!ia %*#I' o)ernor , Subbarao( 6oncerne! o)er low
salary structure in PS+ banks7 he sai! that in the absence of suitable
compensation packae they woul! lose talent to pri)ate sector
len!ers!
Q1he e8ecuti)e compensation in the public sector7 as is well known7 is
lower than that in the pri)ate sector(((If public sector banks are
re>uire! to compete with pri)ate sector banks on a le)el playin
fiel!7 there is a oo! case for compensatin them too on a
competiti)e base$7 Subbarao sai! a conference oraniDe! by I#A
an! 5I66I(
1here is a oo! reason to re)ise their %PS+ bank e8ecuti)es'
compensatory packaes(((1here is also a risk that if the public sector
bank compensation is not impro)e!7 the public sector may lose
talent to the pri)ate sector7$
SourceD <TI S%8 0> 2010
httpDNNwww!livemint!comN<oliticsN=l;o9Ah&1vm;sc"L:,yhm>NSubbarao$
for$higher$salaries$to$chiefs$e@ecutives$of$<SB$ba!html
4hile en!orsin the suestion the o)ernor whole hearte!ly( a loical
corollary one can !raw is that #ank employees can leitimately e8pect the
same concerns to bestowe! on them in the 10 bipartite when talks are
afloat of in makin In!ian banks competiti)e lobally in pursuit of its
rankin with in the first 100 banks(
4rom the forgoing the vital point that arise for consideration if we evaluate the
wage load purely in "upees as per the trend followed in the previous bipartite
settlements to which my submission and answers inter$alia is as under
-ipartite at a glance of awar! staff only
%&
A!!itional Per 6apita 28pen!iture on 4aes %4orkmen'
&
rd
-<S "s! +,2 per annum
(
th
-<S "s! %)%22 per annum
,
th
-<S "s! ()*,2 per annum
5
th
-<S "s! ')&+2 per annum
'
th
-<S "s! *%),,2 per annum
6
th
-<S "s! %&)&&2 per annum
9
th
#PS *s( ..70A0 per annum
Annual 4ae Increase in Pre)ious Settlements %5or 4orkmen'
Amount in *s( J 6rores
&
rd
-<S &&!22
(
th
-<S *%2!22
,
th
-<S %'*!22
5
th
-<S (6%!22
'
th
-<S 6*6!22
6
th
-<S *%66!22
9
th
#PS -7.AA(00
NoteI This annual increase of *s( -7.AA 6rores is in addition to the
contribution by the -anks at *s( H7-00 6rores /for e@isting <4 #ptees) and "s!
%)*22 .rores /for "etired <4 #ptees) to enable them to 3oin the pension
Scheme
Percentae Annual 4ae Increase in Pre)ious Settlements %5or 4orkmen'
Settlement ;age load in "s! Increase in "s Increase in F
&
rd
*$6$'+ &2
(
th
*'$+$6( *%2 +2 &22
%(
,
th
*2$($6+ %,% *&% **2
5
th
*($%$+, &66 *&5 ,&!+5
'
th
%'$&$%222 6*6 (&2 **2!6%
6
th
%$5$%22, *%66 ('2 ,'!(,Y
+
th
%'$($%*2 YY%,'' *%6+ *22!2'
Ybefore the 6
th
bipartite computeri9ation increment was settled! we have to
add that also with this load
YYpension option cost e@cluded
;age load for +
th
bipartite was) "s!%%&+ crores for officers i!e!
(,!+* F and %,'' crores for award staff i!e! ,&!,F and Total wage
load "s (6*5 cr!
In other words between 6
th
and + bipartite the increase in wage
load for award staff /workmen) was *22!2'F i!e! in , years
Applyin the similar loic the increase in wae loa! the initial
offer in this 10 bipartite for workmen alone has to be *s -.AA Q
-.AAR .1.H cr
Applyin the same loic for both officers an! awar! staff if the
tra!itional approach !istribution of wae loa! to awar! staff
an! officers is followe! as the 9
th
bipartite pattern the total
wae loa! in rupees for both %workmen an! officers 'shoul!
be minimum *s&:00 cores 7 which in percentae terms works
out to -A(./
It is pertinent to un!erscore here the total number of workmen
has come !own from H7A07000as on March ;17-00A to H7.07000
as on March ;17-01-7 whereas the number of branches in PS#Fs
increase! from H97.A; to :A79;0( %other than I,#I bank' !espite
the fact between 19&H to -00H new recruitments in the PS#s
was stoppe!7 an! restrictions were impose! on issuance of
licenses aumentin branch e8pansion7 an! aroun! - lakh bank
employees accepte! G*S -001an! their )acancies were not
fille! up( In terms of statistics) the results of ="S%22* scheme
were dramatic! In %222$2*) the staff cost of all the %' public sector
banks /including .orporation -ank) which did not opt for ="S))
was "s %*)2,2 crore! -y %22*$2%) staff costs had dropped to "s
%,
*6)+,+ crore! There were reports in news media that a candid
notice were issued by some banks asking customers to bear with
the inconvenience caused by the voluntary retirement scheme
/="S) says it all! -anks suffered as a result of the industry$wide
="S that was implemented by %5 banks from %222! ="Ss had an
impact on employee morale! -ut it is also true that the e@ercise has
left several bank managements dissatisfied with the results in
business terms too! It should be acknowledged here that the
surviving staff in this crucial ="S period shared additional work
load to satisfy customer inconvenience
And the wages as F to total e@penses which was *(!55 as on &*$&$
%226 has drastically come down to *&!'% a son &*$&$%2*%! The
business per employee which was "s!,+(lacs as on &*$&$%226
increased to **,*lacs as on &*$&$%2*%! The profit per employee
which was &!' lacs as on &*$&$%226 increased to 5!( lacs as on &*$
&$%2*%!
The productivity per employee) the business per employee and
branch and profitability of the public sector banks has enhanced
many folds during the interregnum!
4urther there is steep rise in the .<I inflation and the salaries in
absolute terms have also been eroded! .onsumer price inde@ has
already increased by *,2* numbers over (((2 which was prevailing
on 2*N**N%2*% i!e! the level at which I-A has agreed to merge the
DA with basic pay!
The history of collective bargaining also highlights that the
management as well as the unions have always operated with a win
lose stratey and both the parties have attempte! to #A* the
=AIN /rather than barain) of each other! As a result) there have
been various strikes! In their absence the industrial relations have
been far from peaceful! The management?workers and earlier
union members allege?does not accept the idea of collective
bargaining in its true spirit!
2)en in the onoin neotiations in the 10 bipartite we fin! this unhealthy bar the ain
tren!7 aainst the ethos of true biapartism(
:ven in the ongoing negotiations in the *2 bipartite we find this unhealthy bar the gain
trend) against the ethos of true biapartism! ;hile the unions have reduced their demand
%5
from &2 F /see the Aindu business line Hanuary) *5) %2*( )
I-A a has moved an inch from *2 F to ** F only during the last round of negotiations on
*&$5$%2*(
You sow what you reapN

;ith the banks amorti9ing the cost of ="S %22* in their balance sheet ) the
same method can be adopted by banks whose balance sheet are not robust
because of heavy provisioning of <A) to meet the difference between I-A8s
offer and unions demand which can be offsetedNad3usted with <A recovered
during the amorti9ation period by adapting aggressive steps mentioned above
and due to bolstered motivational levels of the employees in augmenting
recoveries which 3ust revision is bound to have effect!
Alternati)ely a realistic a win? win mo!el which can be en! the stalemate(
assumin that -./ is an appropriate <ust increase7 which will make sense
which will be insensiti)e to a!!itional wae loa! in the Bsprea!F is to
staer the increase o)er a two phases %say from the effecti)e !ate to L at
aree! percentae an! thereafter at -. / ' the so as to i)e banks time to
reco)er an! chanes in the sprea! B in!uce! by chanes in was an!
salaries7 interest rates may not be straine!(
4here there is will7 there is awayN
The inevitable conclusion which even laity can draw therefore is I#AF
stalemate offer of 11/ which amountin only ;H:. crores is un<ust! @ence
our !eman! of -./ hike amountin to *s A&A.crores alone shall meet 2n!
of <ustice7 fair play an! e>uity( %S(2(,(' /2uod erat demonstrandum)
%'