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Monday, October 14, 2013

TALKS HELD WITH IBA ON 11-10-2013--Explained By Sri Subramanian


There are 11 issues that figured in the talks between UFBU and IBA on 11-10-2013.  The demands of UFBU and the response of IBA to each of them are now in public domain.  I wanted to present my own viewpoints and suggestions in this regard, so as to kindle the thought process of our bright and active members.

  1. D.A. Formula
I have always been insisting that only the 1960 series is beneficial, as one point in 2001 series is equal to 22.8259 points in 1960 series.    I will explain further.

Suppose there is a rise in AICPI by 0.90 points in 2001 series. We may not get any real benefit, as the index remains the same for D.A. purpose.

On the other hand, we will get 5 slabs increase in D.A. if 1960 series is adopted, since 0.90 points in 2001 series is equal to 20.54 points in 1960 series.  

Since points under 2001 series are always published ignoring the decimals, there will be a perpetual loss in D.A. to us.

However, if the present D.A. pattern is changed and some alternative mechanism is introduced, we may prevent the loss.  For that, the existing slab system of 4 points per slab must be rescinded.

One alternative is to pay D.A. for each month, basing on the previous month’s index as demanded by the unions.  If this is not acceptable, the next alternative is to calculate average index for the last 3 months, by retaining 2 decimal points in the average index.
For example, we may accept 1.00% increase for each point increase in 2001 series, with 2 decimals retained in the average index as well as the percentage of revised D.A. payable, on account of such rise.  Suppose the average increase in index during the last 3 months is 3.33 points, then we may get 3.33% increase in D.A.

These are my suggestions.  There can be some more alternatives. The implications of each proposal may be examined and an agreement reached, without wasting further time.

2. Reimbursement of Hospitalisation Expenses

As far as hospitalisation expenses are considered, banks may enter into tie up with major corporate hospitals and reputed health insurance companies in the country.  The sum assured may be Rs.2 Lakhs for Sub-staff, Rs.3 Lakhs for Clerks and Rs.5 Lakhs for officers.  But, banks must make good the shortfall in the final amount settled, by contributing the difference amount in full for each staff and their family members.  Since health of the staff members and their family is of paramount importance and direct concern to any responsible organization, the new system shall be designed in such a manner that it does not turn out to be worse than the present one.

3. Compassionate Appointments

Compassionate appointments may be considered under the following circumstances.
  1. The remaining service of the deceased person is not less than 10 years.
  2. The deceased is the major bread-winner (need not be the sole bread-winner) of the family.
  3. The spouse of the deceased is not employed.
  4. The spouse of the deceased or any adult children/dependent may be given a job in the bank, suiting his/her qualification.

In my assessment, the number of compassionate appointments in a year may not exceed 0.1% of the total workforce.

4. Superannuation Costs

Superannuation benefits must be kept outside the purview of wage revision, inasmuch as distribution of wage load mutually agreed upon.  However, other staff welfare measures may be included in the total wage cost, provided a decent hike in wages is guaranteed.

5. Five-day Week

While the MOF and RBI are very particular about introduction of global standards and practices in Indian Banks, it is a pity that international labour standards are never thought of.  Here, by International labour standards I refer to fixed working hours per week, number of weekly holidays, dignity of labour, right man at the right place concept, unity of command, span of control, assured career progression etc.  Moreover, we shall not forget the fact that staff working in central and staff government departments, RBI, non-life insurance companies, many PSUs, MNCs and those in I.T. sector already enjoy 5 day week facility, with regulated working hours.

6. Introduction of concepts of Cost-to-Company (CTC) and Variable Pay

CTC concept in India is not fully established in India.  It is liable for misinterpretation and misuse in Indian banks.  First, let the Central and State Governments and RBI introduce CTC for their employees, before CTC is brought to commercial banks.  All good things like 5 day week, Grade Pay, Very good HRA, Paternity Leave, Transport Allowance with D.A. thereon, Children Education Allowance and CGHS for retired staff are available only for Government staff.  But, higher risks and responsibilities, very frequent transfers across the country, harassment in the name of accountability, implementation of all economic and welfare schemes of the government and finally CTC are only for bankers.  See, what a contrast!

7. Wage Revision of officers

Why should we negotiate for the wage revision of officers in SMGS IV and above?  I too have asked this question myself many a time.  Here are the ‘pros’ and ‘cons’ of covering officers in higher scales in the periodical wage settlements.

  1. Suppose the officers in SMGS  IV and above are kept out of wage settlements, it is very much possible that the IBA and individual managements may collude together to fix far higher wages for such officers, resulting in huge disparity and distortion of wages.  It is not desirable and it is to be pre-empted.
  2. Even in 9th BPS, officers in SMGS IV and above have got higher benefits by way of 2 or 3 additional increments.  Thus, in their case, the wage increase was more than 20%, not 13.5%.

  1. As of now, most of the officers in SMGS IV and above are not members of any union.  So, without participating in any agitations, they get their wages revised automatically.   Why should we take up their cause?
  2. For securing higher wages to 3% of the total staff, why shall 97% of the staff (award staff and officers in junior and middle management) struggle and make sacrifices?
  3. A few thousand officers in the higher grades take away a larger slice of the cake.

My suggestions:

  1. There shall be only 6 grades/ranks in banks (as against 9 now). They are Sub-staff, Clerks, Assistant Managers, Managers, Senior Managers and Top Executives.
  2. All officers in JMGS I will come under Assistant Manager cadre. Officers in MMGS II and MMGS III will be designated as Managers.  Officers in SMGS IV and SMGS V will be designated as Senior Managers and Officers in TEGS VI and TEGS VII will be called ‘Top Executives’.
  1. The basic pay at the start and end of the scales will be thus:
  1. Sub-staff :                        10,000 to 20,000
  2. Clerks:                             20,000 to 40,000
  3. Assistant Managers:       30,000 to 50,000
(d)  Managers:                       45,000 to 75,000
(e)  Senior Managers:            60,000 to 90,000
(f)  Top Executives:            100,000 to 150,000
  1. Other than monthly wages, all other benefits and staff welfare measures must be shared by Sub-staff, Clerks and Officers in the ratio of 1:2:3:4.  In this ratio, 3 represents Assistant Managers and Managers and 4 represents Senior Managers and Top Executives.

8. Directions to work on Holidays declared under N.I. Act

What are the banks doing now, when there is a connectivity failure?  Aren’t they asking for extension?

To surmount the present difficulties experienced by CTS staff, there shall be a list of common holidays for the entire nation to be notified by the central government, as per Section 25 of N.I. Act, 1881.  These holidays must be not less than 12 per year, uniformly applicable to all branches/offices in India.

Because of this change, all staff members must be entitled to 6 days optional or restricted holidays in addition.  The number of days for Casual Leave is also to be increased to 15, from 12 as at present.

The changes as suggested in Para 3 above will be in vogue, till such time 5 day week system is introduced in Indian Banks.

9. Working on Sundays and other Public Holidays

Past statistics reveal that the business transacted on such ‘additional working days’ is too low to justify the cancellation of declared holidays.  These special working days do not benefit any segment – customers, bankers and the government.

The expenditure incurred and the risks faced by the banks, by keeping their branches open on such days far outweigh the benefits accruing to them, by way of commission received on doing government business.

On the contrary, I would suggest that those tax payers who missed their due date must be penalized by asking them to pay a fine of Rs.100 per day for the first 30 days after the due date and Rs.200 per day thereafter.

10. Wage Revision and Increase in Wages

IBA has already lost a precious time of 1 year.  Therefore, on the arrears of wages payable, interest at 10% p.a. from 01-10-2012 is to be paid to the workmen and officer staff.  From 01-01-2014 onwards, this interest must be compounded on quarterly basis.

As for the additional load/increase in wages, we may accept 20% increase (excluding superannuation benefits) until 31-12-2015. From 01-01-2016, our wages will be aligned with central government scales automatically.

11. Delay in Settlement

Talks must be held for 2 days in a row in every month, preferably between 15th and 25th.  The whole settlement must be clinched before the end of December, 2013.  Otherwise, only the wage revision part must be taken up on priority and concluded before 31-12-2013.   All other complex issues like 5 day week and compassionate appointments must not be a stumbling block for wage revision.

A wise trade union leader will never mix up monetary issues and non-monetary issues and he knows what will happen, if he does that.


As I have been demanding from the beginning, we must secure maximum hike in Basic Pay, because most of the other important components are determined by our Basic Pay.

  1. Dearness Allowance
  2. H.R.A.
  3. Leave Encashment (while going on LFC or upon retirement)
  4. Pension
  5. Commuted Pension
  6. Gratuity
  7. Festival Advance and many other loans
  8. Conveyance Allowance (to equate officers in JMGS I with officers in MMGS II)
  9. Future increments
  10. Revised pay scales consequent to every wage revision in future

Therefore, let us concentrate on getting maximum benefit under Basic Pay, Dearness Allowance and HRA.  All others are secondary.

Date: 14-10-2013                                                                                                                        V Subramanian


  1. well said sir, i am with u on the issues raised

  2. Sir, what you have discussed in the above are 100% correct. If the Union Leaders are wiser than IBA, they should opt for TALKS only for REACHING WAGE SETTLEMENT first and rest of the demands may be settled as MISCELLANEOUS.

  3. Wonderful sir. Excellent suggestions and views. Hope our leaders read this.

  4. This Tamil version has countless errors in translation and grammatical structure of Tamil sentences. They are of serious nature.

    Another point is, the author is not from Srilanka, as the caption says.