Ignoring banks’ pleas, IBA opts for collective wage revision

MBN Rao, chairman of IBA, said it was decided to request banks to place the charter of demands before the respective boards of directors and seek their approval for giving the mandate to IBA to negotiate with the unions/associations on their behalf or do it themselves. Currently out of 47 banks that were parties to VIII Bipartite Settlement, IBA has received mandates from 38 banks — 25 public sector banks, nine private sector banks and four foreign banks. Rao says the IBA managing committee had discussed the issue of bipartite negotiations at length. Different views were expressed by the members and it was generally felt the time was right to take a fresh look and bring about a change in the compensation structure and service conditions of bank employees, more so of officers, keeping in mind the competitive pressure and the need to remain in alignment with the market trend.

“Normally, the negotiation process takes two years before a settlement is arrived at. MV Nair, chairman & managing director of Union Bank of India, has been appointed the chairman of the negotiating committee. The negotiation process will start by the month-end and I hope IBA will expeditiously conclude the wage revision this time,” said Rao.

IBA has constituted two committees — a negotiating committee comprising chief executives of banks, and a core group of HR heads of banks. The HR group will hold regular discussions with representatives of unions/associations and will report to the negotiating committee and work under its overall guidance.

The earlier VIII Bipartite Settlement was operative for five years between November 1, 2002, and December 31, 2007. As a part of procedure so far followed, the fresh charter of demands submitted by workmen unions/officers’ associations have been forwarded by IBA to member banks that were parties to subsisting settlement for their mandate. On the impact of the recent recommendation of the Sixth Pay Commission for central government employees on the banking industry, Rao said the former is valid for 10 years; whereas the wage revision for bank employees is due every five years.