Big Hike and Five-Day Work Week: A Huge Win for Bankers Awaits Government Approval

Significant changes have been made to public sector banks as a result of a historic agreement negotiated by the Indian Banks’ Association (IBA) and bank staff unions over an annual wage raise of 17%. This measure, which is scheduled to go into effect in November 2022, will benefit about 800,000 bank employees at an additional annual cost of about Rs 8,284 crore.

This agreement recognizes all Saturdays as holidays, subject to official government notification. The government will issue the required notification before the changed working hours take effect. The agreement was welcomed by IBA Chief Executive Officer Sunil Mehta, who posted on X (previously Twitter) that “Today marks a significant milestone for the banking industry as IBA and UFBU, AIBOA, AIBASM, and BKSM have signed the 9th Joint Note and 12th Bipartite Settlement regarding Wage Revision for Bank Officers and Employees.”

The updated pay scales resulted from the merger of the Dearness Allowance (DA) equating to 8088 points with an additional burden, as explained by the All India Bank Officers’ Confederation in their detailed explanation of the new pay structure. Female employees will be entitled to one day of sick leave each month under this new wage settlement, provided they do not require a medical certificate. In addition, accrued privilege leave can be paid for a maximum of 255 days in the event of an employee’s death while still employed or upon retirement.

Retired employees have also been provided for. For those who became eligible for pension on or before October 31, 2022, the monthly ex-gratia sum will be given in addition to the pension or family pension granted by the Public Sector Banks, including the State Bank of India.

Customers of the bank who normally perform their banking on Saturdays may be impacted by this new arrangement. However, consumers will still have simple access to their bank accounts because to the availability of internet banking, ATMs, and mobile banking.

Furthermore, an announcement from the IBA states that the dearness allowance for bank workers has been raised to 15.67% for the months of May, June, and July. The All India Average Consumer Price Index for Industrial Workers, which averaged 139 points for the quarter ending in March 2024, served as the basis for this adjustment and caused the DA rate to slightly increase.

The 9th Joint Note on Officers’ Wage Revision includes the pay increase as well as other benefits. The total pay increase comes to approximately Rs 8,284 crore, or a 17% increase in the payslip portion of the establishment costs incurred by public sector banks. With effect from November 1, 2022, the revised pay scales will apply to all grades from Scale I to VII and range from Rs 48,480 to Rs 1,73,860.

A five-day workweek has also been supported by bank personnel. This idea has the support of the IBA and bank unions and is pending government approval. The ability of public sector banks to make the switch to a five-day workweek would be largely dependent on the Reserve Bank of India’s regulations regarding minimum working hours and customer service windows.

With greater financial rewards and a better work-life balance promised, this deal represents a substantial advancement for bank employees. The industry is now anticipating the government’s final approval to put these measures into effect.