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Sarbajeet K. Sen

New Delhi , June 5

PUBLIC sector banks appear to be wary of rocking the boat on the staff remuneration front by offering differential pay packages.

Barely months after being permitted to offer higher pay packets to their brighter staff by the Government, several banks have pointed out that they are finding it difficult to break away from the rigid structures set out under the industry-wide bipartite wage settlement between unions and the management by offering differential packages.

Under the existing wage revision system for public sector banks, the Indian Banks' Association (IBA) signs separate five-year settlements with officers' and employees' unions of the banks.

According to the Finance Ministry, a number of banks have expressed difficulty to offer higher compensation by unilaterally coming out with different components for fixed pay and variable pay within the pay scales set out under the bipartite settlements.

"Some banks have reported that the autonomy given to sanction differential pay linked to performance within the pay-scales provides only limited manoeuvrability. This is because the scales are decided through bipartite negotiations and it would be extremely difficult to carve out components of fixed pay and variable pay within limits provided," the Finance Ministry has mentioned in a review of managerial autonomy package.

The autonomy package and its fallout were discussed at the recent meeting of the Union Finance Minister, Mr P. Chidambaram, with the heads of public sector banks.

The package has for the first time empowered the boards of the stronger banks to decide on giving differential remuneration to those staff who are found to be better than the rest of the pack, while the caveat is that the remuneration has to be within the scale decided under the wage negotiations.

However, the limitation of working within the wage settlement pay scales does not apply for specialised cadres such as information technology professionals for which banks have been given greater freedom to decide on salary structures.

Besides giving enhanced freedom on remuneration, the autonomy package has also given the stronger banks more leeway to frame their own human resource policies and create senior managerial posts.

To be classified under the category of `strong banks,' a bank has to have a three-year track record of net profit, capital adequacy of 9 per cent or more, net non-performing assets of less than 4 per cent and minimum owned funds of Rs 300 crore.

However, on a wider plane, the autonomy package allows all PSU banks the freedom to pursue new lines of business and to acquire companies and businesses without the requirement of seeking the permission of the Government.

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