The Hindu Business Line : Bank wage arrears to be paid in cash

It is not only bank employees and officers who will get a bonanza from the wage settlement arrived at on Friday between the bank unions and Indian Banks' Association (IBA).

The Income Tax Department will also collect a tidy sum as tax deducted at source (TDS) from the near Rs 10,000 crore of wage arrears that are likely to be distributed in cash sometime in February next year, sources said.

“It will take three months for us to finalise the settlement and implement it. The arrears for two years and three months (since November 2007) are likely to be disbursed in cash at one go,” Mr C.H.Venkatachalam, Convenor, UFBU, told Business Line.

He also said that the annual average per capita increase for PSB officers (2.44 lakh persons) would be Rs 91,800 and in the case of workmen employees (4.58 lakh persons) it would be Rs 56,200.

Just as the Sixth Pay Commission award for Government employees had a positive impact on the economy and increased demand, the payment of arrears in cash to bank employees is also likely to give a boost to the growth impulses. This is even as the quantum of arrear payout under the ninth bipartite settlement being substantially lower than the arrear payment under the Sixth Pay Commission award.

Under the settlement, public sector banks have agreed to an aggregate annual wage increase of Rs 4,816 crore (17.5 per cent increase over wage bill of Rs 27,520 crore as on end-March 2007). This amount of Rs 4,816 crore pertains to only public sector banks and there will be a similar 17.5 per cent wage hike for employees and officers in old generation private banks and a few foreign banks, Mr Venkatachalam said.

Asked about the resentment among SBI officers and employees over the wage hike deal, Mr Venkatachalam said that SBI and SBI unions were represented by IBA and UFBU. “The present understanding covers SBI also. SBI management has inked the minutes. It is difficult to provide for bank-level improvement at industry-level agreements. UFBU will sort out the matter with SBI unions,” he said.