Bank wage accord good in current context

The 15 per cent hike in wages agreed to as part of the 10th bipartite settlement between banks and labour unions is pragmatic in the sense that it may not satisfy either side totally but does not leave them short-changed either. Those who have signed various accords often say that agreements that leave both sides equally unsatisfied are indicative of a fair settlement.

Although it may have fallen short of what was initially demanded by unions (a 25 per cent hike) or even the earlier settlement (9th bipartite settlement for the period 2007 to 2012) that had earned bank employees a hike of 17.5 per cent, this was a good deal under the current circumstances.

Banks face pressures on profitability and need to raise resources for capital, and they would have found the going difficult if they cut too generous a deal. Bankers say that the 15 per cent hike could go up slightly, by another percentage point or two, if one takes into account other fringe benefits such as superannuation/retirement and medical benefits.

The benefit of two Saturdays off in a month will be attractive to bankers and is in keeping with modern work practices in the corporate world.

Attracting talent Bank jobs do attract lakhs of applicants but, paradoxically, getting good talent has been tough. Therefore, from the point of view of getting the desired talent into their folds and retaining them subsequently, banks must pay higher wages willingly and modernise their HR practices.

For attracting talent, banks have to compete not only with each other but also other organisations. There was a time — that is, some decades ago — when a probationary bank officer started on a higher pay scale than his civil services counterpart did.

Quite a few top bankers gave up a civil services appointment or, in some cases, even B-school admissions to take up a bank job. Given the current pay scales, that may not happen now, and will remain part of bank folklore.

Banks also face the challenge of labour turnover. In the past, officers or clerks seldom moved out till retirement. Now, more opportunities in the private sector often lure away talent.

A competitive salary through periodic wage increases that takes into account rise in cost of living, will impart a certain degree of stability for banks to run operations efficiently.

Need for quick settlement These wage settlements must, however, be done faster and without much fuss. Often, there are multiple rounds of negotiations that go on for two years or more. This has happened in nearly every settlement done in the past few decades and it was no different this time.

And those rounds are often accompanied by a couple of strikes or threats to strike by unions — which don’t worry about inconvenience to customers.

The Indian Banks’ Association (IBA) that represent bank managements also doesn’t help matters by showing little urgency to come to a quick settlement. Perhaps it is a charade, as one banker put it, that both sides play a slow dance for public consumption. In typical Indian tradition, all is well that ends well, since the management also benefits from higher wages.

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