Latest Bipartite Settlement Updates
This is what has been finalized and will be
signed by IBA and UFBU latest latest before
15th Oct 2020. New salary will be from Nov
2020. Arrears of 36 months will be paid
before Navratri I.e. before 27.10.2020 (after
deducting arrears already paid last year)
--New Basic to be 1.515 times existing
basic.
--Special Allowance 15.50% of new basic
--HRA at 7/8/9 % based on area
classification
--CCA, PQP etc fixed at 1.515 times
existing levels
--Medical fixed at 12,000 from existing
8,000
--P.F. deduction continues at 10% of new
basic
--14% employer contribution for NPS.
-- NPS Employee contribution kept constant
at 10% (Basic pay plus DA)
--PLI formula same as per MOU.
Further, LEVY amount has been finalized by
UFBU @ 2% of gross arrears
11th Bipartite Settlement Settled on 15% Pay Hike, MOU within 90 Days
The waiting time is finally over for the public sector bankes. Their much needed demand for settling the 11th Bipartite Wage Revision is finally concluded with 15% hike. The MOU between the IBA and UFBU will be signed within 90 days.
The detailed circular is expected to be updated by 23rd July 2020. The synopsis of the settlement are :
1) 5 day week agreed!
2) 15% wage increase agreed!
3) 47.80% (478 Slabs) DA merger agreed!
4) 2.25% Load Factor on Basic pay agreed!
5) Total increase in Pay @49.80 % agreed!
6) Balance 13% will be distributed in various Allowances agreed!
7) DA rate in future will be @ 0.07 % per slab (now balance of slabs will be 681-478=203 slabs)
Official News about final settlement may be expected tomorrow! Please wait for more details. This is updated as received by one of the member.
Now the formula of new agreement is being discussed in industry and in r.b.i also. The date of effect is 01.11.2017 and merger point at consumer price index 6352 have already been decided. It means that 478 slabs will be merged in basic. (6352-4440=1912÷4=478slabs)i.e 47.8% d.a as the rate is .10 paise per slab.
In RBI if, Govt approves, pensioners will be benefited in updation of pension. If 10% load is approved over 47.8% d.a it comes to 162.58%.(100+47.8=147.8×10%=162.58)i.e 163. It means 100 rupee basic pention becomes rs.163.
So conversion figure will be 1.63. I have taken 10% load for updation because in last updation 10% load was given to all pensioners irrespective of their date of retirement. If load is less then the conversion factor will come down accordingly.
After merger at index 6352 the D.A rate will be 7 paise over and above rs 6352. Arrears will be from the implementation of updation I.e.march 2019.
How to calculate salary of Performance Linked Pay (PLP) Structure ?
In recent meeting of 11th Bipartite Settlemeny for public sector bank employees, the Indian Bankers Association (IBA) has coined the Performance Linked Pay Structure (PLP) and insisted and advised to the Bankers' association to incorporate it to their charter of demand.
The performance linked pay structure will be based on many criteria like Return on Assets, Operating Profits, YoY growth etc. Many of the banks has advocated about the PLP.
IBA detailed their proposal as under :
1. Category of Banks
2. Percentage Increase YoY in Operating Profit
3. Return on Assets (ROA)
4. Payout as Annual Increment on Establishment cost
5. IBA will payout as Maximum of 8.2% and Minimum of 1.4% as annual increment on Establishment cost.
6. The Annual increment will be paid addition to the existing 6% hike which would be fixed component.
What is Performance Linked Pay :
Take an example - consider the Gross Salary as Rs 100 in Scale I with any of the Public Sector Bank. Gross salary includes Basic Pay, DA and HRA.
As per IBA offers of 10% Fixed Hike in salary :
The salary after fixed hike will be : Rs 100 + Rs 10 = Rs 110 (No DA merging is considered yet)
The Gross Salary with Fixed hike of 10% will be paid after 11th Bipartite to all the employees irrespective of any criteria : Rs 110
Performance Based Annual Increment
This is where IBA has twisted the 11th Bipartite Negotiation, as per IBA proposed complex formulae, all the banks are categorized on the baisis of performance components i.e. Return on Assets (ROA) and Profitability majorily.
As per offer given by IBA :
Category 'A' Bank :
All such banks which are having Return on Assets (ROA) greater than Zero and Percentage increase in YoY Operating Profit higher than 15%.
The base year considered for the calculation is 31st March 2018.
Mandatory Criteria :
Operating Profit : > 15% | ROA - >=0
Category 'B' Bank :
Similarly, for category B banks the criteria are :
Mandatory Criteria :
Operating Profit : 7.1 - 15% | ROA - (-)0.24 - 0
Category 'C' Bank :
Similarly, for category C banks the criteria are :
Mandatory Criteria :
Operating Profit : 0.01% - 7% | ROA - (-)0.75 - 0.25
Percentage of Increment Paid on Annual Basis
All such banks, which are having YoY Growth in Operating Profit/Net Profit higher than 15% with ROA of '0' and above will get the annual increment as 8.2% on Establishment cost of 30 days.
For e.g. Indian Bank having ROA as 0.53 with positive Net Profit. It will achieved both the criteria as on 31st March 2018 hence qualified for "AA" category.
The Annual increment offered to this bank as per new scheme will be 8.2% of 30 days establishment cost.
What is an Establishment cost ?
This is the cost incurred on the staff expenses in general by the organization.
Hence these two Banks' employees will be paid '8.2%' on establishment expenses of average 30 days.
Formula Explains :
Suppose the Establishment expenses of Vijaya bank as on 31st March 2019 is Rs 100 and there are 50 employees in the Bank, in such case the
Annual Increment with new formula will be :
For e.g. in Indian Bank
Establishment Expenses For Year : Rs 100
Establishment Expenses of 30 Days : 100/365*30 = 8.21
Increment for each employees : 8.21/50 = 0.16
Gross Salary of employees as on 31st March 2018 : Rs 100
Gross Salary with Annual Increment : Rs 100 + (Rs 100 X 0.16) = Rs 116 (Other than Fixed hike)
Annual Increment offered to each employees in "AA"category bank will be 0.16 factor. Similarly each of the bank will be classified and paid as per their categories.
Bank unions reject IBA's wage hike offer in today's meeting- 11th Bipartite Settlement Updates
Bank employees unions on Thursday rejected Indian Banks Association’s (IBA) offer of 15 per cent hike in wages and decided to go ahead with two day strike beginning January 31, 2020.
IBA offered a 15 per cent hike in wages, a revision over previous offer of 12.5 per cent at bilateral meeting of bank and trade union representatives to avert agitation by bank employees.
C H Venkatachalam, general Secretary, All India Bank Employees’ Association (AIBEA), said banks have declined to consider demand for five days banking in week and merger of special allowance.
Banks, under aegis of IBA, have improved offer (15 per cent). But it not acceptable and United Forum of Bank Unions (UFBU) has decided to go ahead with proposed two-day strike (January 31 and February 01, 2020) he said.
Meanwhile IBA in a statement said in the meeting held today (on January 30, 2020), despite the revised offer of upto 19 per cent hike including performance linked incentive made from IBA side.
During discussions, IBA team explained the conditions of business, paying capacity of Banks and consistent efforts at providing various types of benefits to the employees. But Unions are pressing for some other demands which are not possible to accept, IBA said.
One such demand is for 5-day banking. It is known to all that the economy of the country is going through testing times. Banks being the principal players in economic development, cannot afford to provide lesser number of working days for banking activities, IBA added.
United Forum of Bank Unions which consists of nine bank unions of employees and officers, viz. AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO, has given the call for agitational programmes including strike actions.
Unions have also planned a three-day strike from March 11, followed by an indefinite strike from April 01, 2020.
Some of the major demands include Wage Revision Settlement at 20 per cent hike on Pay slip components with adequate loading thereof, Scrapping of New Pension Scheme(NPS), Updation of Pension and Improvement in Family Pension.
For the convenience of the customers, Banks will keep alternative channels available and customers can utilise these alternate/digital channels of banking 24x7 for day to day banking.
Updates of today's meeting of 11th Bipartite Settlement
IBA team was led by IBA Chairman Mr. Rajnish Kumar, who is Chairman of SBI.
The following discussion took place :
1. Revised Offer : The offer for hike in Fixed Pay was enhanced from 12% to 12.25 % on pay slip. This offer is with 2% loading. "In view of overall difficult financial condition of Banks, it is not possible to go beyond this offer," was made clear by IBA.
2. Special Allowance : Due to extra financial burden IBA refused the Demand for Merger of Spl Allowance with Basic.
3. Five Day Week : IBA flatly refused this Demand raised once again.
4. PL Encashment : At present PL can be encashed (i) on retirement (ii) while availing LFC.
A NEW channel for PL Encashment will be introduced. Employees can encash 5 days' PL every year against available balance.
As special case, those employees having less than 5 years' remaining service, shall be able to encash 7 day PL every year against balance available.
5. Family Pension : IBA is working on enhancing it. They have accepted that it is not adequate.
6. Pension : For enhancement, cost factor is prohibitive. IBA is working on it. But they have not committed anything in this regard.
7. Performance Linked Incentive (PLI) :
As per suggestions made by Unions IBA came out with Revised Offer as under :
It is payable on year on year increase in Operating Profit.
(A) If Operating Profit increase is between 5 to 10 %, the Incentive will be 2.75 % which equals 10 days' salary.
(B) if Operating Profit increases by 10 to 15 %, the Incentive will be 3.84 % which equals 14 days' salary.
(C) if Operating Profit increases by 15% & above, Incentive will be 5.75 % which equals 21 days' salary.
(D) For those Banks which could not register NET PROFIT, but it's Operating Profit increase is above 5% : the PLI will be @ 2.75% or 10 Days' salary.
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