Sunday, October 31, 2010

Bank Employees' Salaries

Comparative salary for April, 2010 payable to govt. employees as per VIth Pay Commission and to bank employees as proposed under 9th Bipartite Settlement between Bank Unions and IBA

(Amt. in Rs.)

Heads

Group A Officers

Govt. of India

(Rs.)

Bank

Officers

(Rs.)

Clerk Govt. of India

(Rs.)

Clerk

Govt./public sector bank

(Rs.)

Group D employee Govt. of India

(Rs.)

Sub-staff in a govt./public sector bank

(Rs.)

Basic Pay

15600

14500

8370

6200

5530

5500

Grade Pay

5400

Nil

2800

nil

1800

Nil

Special Pay

nil

nil

nil

1000

350

Dearness Allowance

7350 (35%)

5329 (36.75%)

3910 (35%)

2646 (36.75%)

2566

(35%)

2150

(36.75%)

H.R.A.

6300 (30%)

1233 (8.5%)

3351 (30%)

720

(10%)

2199

(30%)

585

(10%)

C.C.A.

Nil

435 (3% Max.540)

Nil

288 (4% max.375)

Nil

234 (4% of B.P. Max.270)

Education Allowance (Rs.1000/= per child max for 2 children)

2000

Nil

2000

Nil

2000

nil

Transport Allowance

4320 (3200+35% DA )

nil

2160 (1600+35% DA)

225

810 (600+35% DA)

225

Gross Monthly salary

40970

21497

22591

11079

14905

9044

(The above data are indicative)

It is evident from the abovementioned chart that bank employees are getting almost half of salaries being paid to their counterparts in govt. dept. It is also not out of place to mention that many public sector undertaking are even paying more to their employees than govt. employee. It is more painful employees that a bank officer is being paid less than a clerk of govt. and a clerk of bank is being paid less than a group D (peon) employee of central govt. What to talk of a sub-staff (4th class) in banks.

2. It is pertinent to note that a committee for “standardization of Pay Scales, allowances and perquisites of officers in the nationalized banks” known as PILLAI COMMITTEE was constituted which fixed the initial salary of bank officer Rs.700/= per mensem equivalent to initial salary of group A Officers of Central Govt. The recommendations of this Committee were implemented w.e.f. 01.07.1979. Now over a period of three decades the salary of a bank officer is reduced to almost half of the salary paid to Group A officers. The Pillai Committee was duly constituted by the govt. and its recommendations accepted. The govt. is bound to fix initial salary of a bank officer equal to the initial salary of Group A officer in Central Govt.

BENEFITS GIVEN TO CENTRAL GOVT. EMPLOYEES but not available to PUBLIC SECTOR BANK EMPLOYEES

Central govt. employees (as per VI pay commission)

Bank employees

Basic pay has been fixed approx

Old BP + 50% DA x 1.86

Which is around 2.79 times

Approx. 41% (initially increase is 45% later it decreased also). This 41% revision in basic pay also include merger of DA about 32%. Thus only 9% effective increase in basic pay.

Grade pay considered as a part of Basic Pay and attract all allowance

No grade pay

HRA 20%-30%

Officers: 6.5% to 8.5%

Clerks: 7.0 to 10%

No stagnation ( 3% increase every year to all employees on stagnation)

Stagnation (No Annual increment).

Transport Allowance

Officer: 3200 +DA (presently 4320)

Group C: 1600 + DA (presently 2160)

Group D: 600 + DA: (presently 810)

Transport allow. Will increase on every increase of DA which is presently 35%

Officer: Different banks give different meager transport allowance and that too is for official purpose works

Clerk: 225

Sub-staff: 225

(NO DA payable on transport allowance)

Educational Allowance

Rs.1000 per child per month ( Max. for 2 children) from the earlier 50/= p.m.

10 fold increase in hostel subsidy to Rs.3000/= p.m.

No Education Allowance

PENSION:

Govt. pays the entire amount

pension scheme for bank employees is a contributory scheme. Every time a bipartite settlement takes place, a hefty sum is earmarked from the amount offered to existing staff for payment of pension to retired employees.

Pension is revised whenever a new pay commission report is implemented

No revision of pension. Once fixed it will remain same for entire life

Condition of 33 years of service to get full pension is abolished

Full pension is given only on completion of 33 years of service.

Additional pension

On attaining the age

80 yrs 20% addl.

90 yrs 30% addl.

95 yrs 50% addl.

100 yrs 100% addl.

Only pension once fixed

Accumulation of Earned Leave

For 300 days

240 days

Compassionate appointment facility available

Compassionate appointment facility abolished

In pursuance of recommendations of VIth Central Pay Commission, the Govt. of India approved merger of 50% DA into Basic Pay w.e.f. 01.04.2004.

No such benefit made available

VIth Central Pay Commission also recommended 50% merger of DA into basic pay

No benefit proposed

No pre condition imposed on Pay Commission to restrict its recommendations within a certain limit. Pay Commission fixes pay scales scientifically keeping in view the cost of living, medical, housing, health, education etc.

IBA imposes precondition of additional load percentage in advance

Interest on Provident Fund

Rate of interest on EPF of govt. employee is 8.5% whereas many banks have been paying much less to their employees for last few years.

Average Bank employee has not been given increase even equal to Education and Transport Allowance given by Central Govt. to its employees, What to talk about Grade Pay, HRA Basic Pay etc.

Additional Points:

3. Unions are not specifically mandated by existing employees to negotiate salary and enter into a Bipartite settlement. Unions themselves approach govt/IBA and enter into bipartite.

4. It is said that bank employees can not be given benefit of VIth pay Commission recommendations as they get wage settlement every five year whereas pay commission recommendations are implemented once in 10 years. This notion is misconceived. Central Govt. employees get manifold increase in 10 years what a bank employee get in two bi partite settlements. It is evident from the wage difference as shown in the chart above.

5. Retired employees prior to 01.11.2007 were not the members of Unions when 9th Bipartite Settlement became due yet they agreed to pay them pension from the share of existing bank employees without any mandate by the existing employees. IBA agreeing to it is very unfortunate and suggests that it is helping the unions come what may. Pension payment is solely govt. responsibility. Forcing existing employees to share burden of pension is immoral, improper, unjustified & unethical on the part of a welfare state.

6. The pay scales shown for the officers include 4 stagnation increments which will be given after 3 years of service over a period of 12 years. These are not available to all officers. This is just an eye wash. Actual pay scales should be made less by 4 stages from the pay scales publicized by union leaders/IBA.

7. The nominal increase shown in medical aid is also annual & not monthly and moreover is reimbursement against medical expenses.

8. C.C.A. amt. Rs.540/= which was fixed 5 years back will continue for another 5 years meaning thereby Rs.540/= for 10 years.

9. Bank employees have been given about average revision of basic pay to 1.41 times that too after merging about 32% of DA. Against this Basic Pay of Govt. employees have been revised to approx. 279%. which is almost double of what bank employee will get.

10. It is more demotivating for officers that they have been offered same additional load as being given to clerk/sub-staff whereas in case of govt. employees VI th Pay Commission recommended higher salary to officers and accordingly higher grade pay was fixed.

11. Pension to retirees and another option to existing employee has been given at the cost of lacs of such employees who have already opted Pension. In this settlement they are the biggest losers.

12. Though the number of retired leaders participating in the negotiations has not been disclosed, yet it is believed that many retired leaders had been negotiating the bipartite settlement. How could a retired leader take care of the interest of an existing employee. A retired leader is interested in his benefits. That is why pension has been agreed to be paid ;to all retirees after 1995-96 from the share of existing bank employees. Unions are not sharing the details. It is learnt that an understanding has been reached between unions and IBA/Govt. to pay pension arrears to retired employees w.e.f. 01.11.2007. In this way it is estimated that a retired employee would get a huge amount as pension arrears and average pension approx.15000/= p.m. whereas existing employee would get only Rs.1300-5000 average increase (slightly more at higher scales but number of such officers is very low) and few thousand of rupees as arrears. Since many of the leaders have been retired after 1995-96 without opting pension scheme, Unions leaders managed to give them pension from the share of existing employees and the govt./IBA agreed to their unjustified demand. We welcome the govt. move to pay pension to retired employees & another pension option to CPF optees but it should not be at the cost of existing employees. Govt. should pay them pension from its own sources as is done in the case of other govt/public sector employees. . It it is a great injustice to lacs of those employees who with their fair foresightedness had already opted “pension” but being punished for their wise decision & for no fault of them.

13. Union Leaders are boasting that this is the historic achievement because bank employees were never given such an increase. In fact union leaders are patting themselves. The salary hike given to govt. employees ranges between 40%-60% . Against it bank employees have been given only 17.5%. Out of this 17.5% offered to existing employees, a lions share has been earmarked for paying pension to retired employees.

14. Union leaders are boasting that 2 additional stagnation increments which are to be given after 9 & 12 years have been secured after 1987. If they could not get any improvement for last 23 years, they should be held responsible for it and own entire blame instead of patting their back themselves. They are terming it as their achievement whereas they should know that VIth Pay Commission has abolished the stagnation increments and has ensured yearly hike of 3% every year to all employees on stagnation. More over these increments are not to be given to all employees but to only few of them who have completed 9 & 12 years on service on stagnation. To a rough estimate about 65%-75% employee is on stagnation and do not get any annual increment.

15. Bank employees have been cheated badly in the name of pension. Thousands crore of rupees have been earmarked towards pension & no calculation/data are provided. It may be noted that Many of the bank employees opted pension in the very beginning i.e. 1993-94 when the scheme was first introduced. Later when an option was given to CPF employees to opt pension, a lot of employees opted pension scheme. Pension scheme is also available to new recruitees from 1995. Thus Most of the employees are covered under pension scheme. To pay pension to remaining employees govt. is recovering a huge amount as follows:

a) Bank’s contribution towards C.P.F. from such new optees,

b) offering almost 50% salary to existing employees

c) not revising allowances

d) withholding major share of arrears payable w.e.f. 01.11.2007

e) govt. would be saving further contribution towards PF of such new pension optees (switching from CPF) which other wise was payable to them had they been under CPF scheme.

f) CPF plus 30% additional (as learnt) from already retired employees who avail the opportunity

Thus in the name of pension govt. is collecting thousands crores of rupees from poor bank employees/retirees. This speaks a lot about the conduct of bank leaders and exploitation of bank employees in the hands of signatories. Keeping in view the life expectancy in India, expenditure on a/c of paying pension for remaining length of period to already 15 years back retired employees is not going to be very huge in comparison to amount collected by govt. in the name of pension/pension fund. While reaffirming our contention that pension payment is entirely the responsibility of a welfare state, we also demand publication of the pension load statistics in this regard.

16. Unions never demanded parity with VI Pay Commission. To maintain their supremacy & middlemen-ship & for following reasons besides others, they do not want bank employees to be covered by Central Pay Commission whereas a bank employee wants to be covered by pay commission:

i) In the name of wage revision they push lacs of bank employees to unwarranted politically motivated strikes/bandhs.

ii) On conclusion of a Bipartite settlement the unions and Associations collect roughly approx. Rs.2000/= to Rs.3000/= (this time it could be Rs.5000-10000/=) per employee as levy & given a strength of about 10 lacs of employees the amount is about Rs.200 - Rs.300 crores. That’s why they enter into bi partite settlement twice over a period of 10 years and achieve much less than what Pay Commission offers to Central Govt. employees. Thus they are milking the Bi-partite settlement for Rs.400/= -Rs.600.0 crores over a period of 10 years. This is in addition to what unions collect by way of monthly subscription/membership fee which to a rough estimate comes to approx. Rs.360 crores (60/= p.m. x 10 lac x 12 months x 5 years) over a term of bipartite i.e. 5 years. It is but natural an endeavour to oppose the pay commission. Let the corruption increase, the govt. is happy virtually by giving no increase. When compared with the pay package of international banks, the Indian banks pay least to their employees.

17. Legal Infirmities:

Prima facie this 9th Bipartite Settlement suffers from following legal infirmities, hence a nullity in the eyes of law:

i) Unions/Associations are not mandated by their members. Hence a settlement entered into by them is not binding on members.

ii) Officers Associations are not recognized under labour law hence not legally competent to enter into a bipartite settlement.

iii) Retired Employee are not the members of Unions. Unions do not represent retired employees.

iv) Though the information has not been supplied yet it is believed that many retired leaders were in negotiating team.

v) There is no specific mandate by existing employees to pay pension and pension arrears from their share.

vi) As per Ministry of Finance (MOF) IBA is a voluntary organization, hence it

Cannot enter into a bipartite settlement on behalf of the govt. and bind the govt.

vi. Pillai Committee Report is still in force as not withdrawn/cancelled/repealed by the govt. Hence a Bipartite Settlement for officers cannot attain overriding effect on Pillai Committee.

vii) The settlement is in gross violation of Article 14 & Article 16 of Constitution of India. Article 14 of the Constitution enjoins the State not to deny any person equality before the law or the equal protection of the laws and Article 16 declares that there shall be equality of opportunity for all citizens in matters under the State. Following a different set of rules in paying salary/pension/other benefits to bank employees is in gross violation of the spirit of the constitutional provisions.

viii) “Equal pay for equal work for both men and women” has been accepted as a “constitutional goal” capable of being achieved through constitutional remedies. In Randhir Singh Vs. Union of India Chinnappa Reddy, J. said : (See p.622 para 8: SCR p.304)”

ix) It has been carried out in a non transparent manner. Information sought on Bipartite negotiations/developments/others denied to be supplied by MOF.

x) Lacs of bank employees who have already opted pension feel cheated. Pension to old employees and another option of pension to existing CPF optees is being given at the cost of such employees who are already pension optees.

18. INFORMATION SOUGHT UNDER RTI Act, 2005

Efforts are being made to obtain information regarding Bipartite Settlement , Pillai Committee Pay Commission recommendations and implementation etc. from Ministry of Finance for last 5 months but they denied to supply the information on one or the other pretext. It is strange that on one occasion MOF while enclosing RTI application of applicant requested IBA vide their letter dt. 15.02.2010 to furnish their (IBA) comments on each point raised in the application along with copies of the material asked for but all of a sudden denied to supply the information vide their letter dt. 02.03.2010. Maintaining such a high degree of secrecy about Bipartite Settlement at the cost of the provisions of RTI Act, 2005 is beyond a reasonable understanding.

In reply to information sought, MOF has stated that IBA is not a public authority. It is very strange that IBA which issues instructions/guidelines to banks & it is mandatory on banks part to follow them, the IBA which is a link between banks and govt./RBI, which runs with the funds made available by public sector banks and doing many other public nature work is not a public authority. It gives reasonable apprehension that to curb transparency IBA is not treated as a public authority. Instead of holding that IBA is not a public authority, MOF should declare IBA as a public authority as done by sports ministry in declaring all National Sports Federation receiving grant of Rs.10.00 lac or more as public authority u/s 2(h) of the RTI Act, 2005,” (TOI 31.03.2010 Page 9, Lucknow Edition)

19. Banks are finding it very difficult to recruit new staff While advertising new posts/vacancies bank do not publicise salary/pension/Rate of Intt. on PF/other facilities. Because of very low salary and hard working conditions, many candidates who apply for a bank job on coming to know about salary structure either do not appear in the test or not join after being selected or leave after joining. Thus in every recruitment process banks are collecting lacs of rupees from unemployed youth.

20. The abovementioned facts can be verified from MOF/public sector banks/IBA. The allbankingsolutions.com & other websites may also be referred in this connection.

21. This communication is aimed at benignly submitting the truth behind this 9th Bipartite Settlement entered into between bank unions/IBA. A little enquiry/investigation/ survey among general bank employees (not bank leaders), study of Pillai Committee Report, VIth Pay Commission recommendations & service conditions of bank employees would reveal the enormity of injustice being done to bank employees.

22. It is not out of place to mention that the benefits of VIth Pay Commission have been extended to various public sector organizations, state govt. employees & others. It has been even extended to those govt. depts. which depend on budgetary support but bank employees are being denied these benefits despite banks earning huge profits. Needless to mention that bank officers work for almost 9-10 hours daily, on Sundays and holidays with no additional compensation. It may also be mentioned that VIth Pay Commission Recommendations were implemented at a time when our economy was reeling under great recessionary pressure & during that time crores of rupees were allocated by the government towards implementing pay commission recommendations.

23. Bank employees should not be left to the mercy of union leaders/IBA. In a welfare state it is the prime duty of the Govt. to ensure that welfare of all citizens is done in a fair, transparent & justified manner.

24 We request you all great, able, revered & beloved leaders/dignitaries & custodians of law to please look into the plight of bank employees and help them in securing justice & achieving parity with their counter parts in govt./other public sector organizations where VIth Pay Commission Recommendations have been implemented. While considering the genuine legitimate expectations of bank employees please do take cognizance of the contribution of banks and their employees who burnt midnight oil to keep the effects of global recession on our economy to bare minimum & pulled it back from that dark phase successfully. It is the bank employee worked round ‘o’ clock in implementing the Debt Relief & Debt Waiver Scheme for farmers and making it a great success besides standing firm behind every decision of govt. be it MANREGA, Financial inclusion or any other. We should not forget that a demotivated force can’t win a battle.

25. In view of the foregoing we very humbly request that bank officers/employees may also be brought under pay commission & recommendations of VIth Pay Commission be also implemented in banks . We may also draw your kind attention that salaries of bank officers were fixed in parity with Group A Officers of Central Govt. as per recommendations (implemented w.e.f. 01.07.1979) made by Pillai Committee.

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