IBA members meet FM to break deadlock with bank unions

Besides Dandekar the IBA delegation included its chairman AT Paneerselvam, chief executives of Allahabad Bank, Oriental Bank of Commerce and Syndicate Bank, Harbajan Singh, Dalbir Singh and KV Krishnamurthy respectively.

The wage settlement would involve a total burden of Rs 1,396 crore, Dandekar said, adding as much as 20 per cent of establishment expenditure went on wages to the bank employees.

Even though the memorandum of understanding on the 7th bipartite wage accord was signed by IBA and UFBU on March 11, outlining 12.25 per cent across the board increase (including retirement benefits), the settlement could not be implemented due to differences on the percentage of pension in the wage accord.

The bank unions have not accepted the IBA formula, saying this would take away 26.5 per cent of the wage hike to pension and bring down the monthly wage hike drastically.

The UFBU have demanded reduction in this percentage. Dandekar said the aggregate gross profits of the public sector banks during 1998-99 had declined to about Rs 10,178 crore as against Rs 10,280 crore during the previous financial year.

Similarly, he said the aggregate net profit of these banks had come down to Rs 3621 crore during 1998-99 as against a high of Rs 4,978 crore during 1997-98.

He said the establishment expenditure last year was less than 20 per cent of the total income of the banks. The IBA is expected to hold talks with the UFBU in Mumbai this week to arrive at a settlement on the pension issue.

Dandekar said Sinha was also briefed on the state of the progress of deliberations with the bank unions till now.