Wage Revision & Pay Slip component

WHAT IS THE DEFINITION OF ‘PAY SLIP COMPONENTS’?

IBA has used the phrase ‘pay slip components’ during the course of negotiations for 10^th BPS.  This is the first time this phrase is ever being used in the context of bank staff wage revision.  As I started thinking what exactly IBA meant by this phrase, several things came to my mind. 

First, as a lay man, I thought that all the components of pay and allowances, as they appear on the left side of monthly pay slips, will be covered by this new terminology.

But, as I extended my logic further and further, I stumbled upon these ideas.

1. All the items that are part of the standard pay slip can be covered by this phrase.  Then, naturally, on the deductions side, pension contribution for ‘Defined Contributory Pension Scheme’ (NPS) of the employee also figures.  So, will that also be counted as a pay slip component?
2. But, NPS is applicable to only those who joined on or after 01-04-2010.  So, it cannot be the case, I reasoned.
3. But, if contribution made by the bank for staff under old pension scheme and the contribution matching the DCPS contribution of the employee, as it appears in his pay slip, is also included? 
4. No, such bank’s contribution is invisible and not reflected in the pay slip.  So, that may not be one of the ‘pay slip components’, logically thinking.
5. Then, will ‘pay slip components’ include only Basic Pay, Special Allowance if any, D.A, HRA, CCA, PQP and FPP and nothing else?
6. So, all other benefits, as detailed hereunder will be kept out of reckoning?

(a)    Pension (which includes commuted pension, normal pension and family pension)

(b)    Gratuity

(c)    Leave Encashment

(d)    Quarters and Leased Accommodation facility

(e)    Conveyance Allowance

(f)     Medical Aid

(g)    Hospitalisation Expenses (or Health Insurance Premium as proposed by IBA now)

(h)    LFC

(i)      Halting Allowance

(j)      Compensation on Transfer – Lump sum paid, Travelling Expenses, Transport of Personal Effects etc.

(k)    Telephones

(l)      Staff Welfare measures that include Canteen Subsidy, Newspaper/s, Entertainment Expenses, Educational Allowance/Grant for Children’s education (which is only a pittance), Merit Awards/Scholarships, Maintenance of Holiday Homes, Free Medical Check-up, Reimbursement of cost of spectacles/eye glasses, Residential furniture etc.

(m)  All loans on concessional terms

Let us wait and see how IBA explains this phrase and gives full break up.  We must also see how UFBU is going to respond to IBA’s definition in this regard.  Both IBA and UFBU must battle it out to reach a common ground in finding mutually acceptable meaning for this phrase, before proceeding further on actual wage negotiation.

Date: 17-01-2014                                                                                                         V Subramanian

DIFFERENCE BETWEEN WHAT WE ASPIRE FOR 

AND WHAT WE DESERVE

Preface

Usually, there will be a difference between what we aspire for and what we deserve.  It is human nature to expect and demand more from others, than one what is logically, morally and legally entitled to. I hope everyone agrees on this point.  But, it is quite surprising and shocking that in case of bankers’ wage revision, just the opposite happens.  Yes, we aspire for less than what we deserve. I will explain further how it is true and correct.

Compare the past and the present

If we compare the past, especially the scenario prevailing before 1996 (when 5^th CPC pay scales were implemented for the central government staff and also the staff of most of the state governments) and the present condition of bankers, one can notice the following.

1. The aggregate business of banks in India has increased from Rs.598,419 crores in 1995 to Rs.132,57,780 crores (a whopping increase of 21.15 times).
2. Net Profit of all banks has increased from Rs. 2,322 Crores in 1994-95 to Rs.91,200 crores in 2012-13 (recording an increase of 38.27 times).
3. The number of bank branches has increased from 62,367 in 1995 to 109811 as on 31-12-2013, registering a phenomenal growth of 76%.
4. The number of products introduced by different banks has multiplied.
5. Number of bank employees increased from 997,601 as on 31-03-1995 to 11,75,149 as on 31-03-2012.  In percentage terms, this represents a growth of 17.8%.  However, we shall not forget the fact that only during this period all banks computerized their operations fully.  Yet, if we take into account the percentage increase in the most important parameters mentioned in Points No.1 to 3, the increase in staff strength during this period is very poor.
6. Because of non-recruitment/minimal recruitment of personnel during 1996–2008, the individual work load has increased manifold.  The huge exodus through VRS in 2001 worsened the situation further.
7. All banks vied with one another in getting bulk deposits at very high rates which brought down their NIM.  Similarly, lending large amounts below BMPLR to selective borrowers hit the profits of all banks.
8. Restructuring of a major portion of advances and burgeoning NPAs from 2008 onwards shook all banks, regardless of their size.
9. Because of greater emphasis on fee based income, after NIM has shrunk, the banks started selling many other financial products like mutual funds, life and non-life insurance policies, gold coins, credit cards, debit cards etc. thus losing their main focus on core banking activities. 
10. Banks started doing all others’ work during this period.  For instance, collection of direct taxes, acceptance of Public Provident Fund and New Pension Scheme contributions from the general public, payment of corporate dividends, payment of salaries of staff of companies and firms, collection of other banks/financial institutions’ loan instalments through post-dated cheques and ECS, payment of government/railways/municipal corporation pension etc.
11. Computerisation of major banking activities took place in the early part of the last decade.  It was followed by implementing ‘Core Banking Solutions’ in banks some 6 years ago.  But even though bank staff have been relieved from the drudgery of doing all routine work manually, their dependence on computers has become total.  Whenever any technical problems crop up, the staff remain helpless.  In spite of identifying the nature of the problems, where they lie and what their solutions are, bank staff today are handicapped and have to necessarily look for outside help.  Much of their precious time is wasted on trouble shooting operations almost every day.
12. Despite installation of a large number of ATMs and offering Debit Cards, Internet Banking, RTGS and NEFT, Tele Banking and Mobile Banking to customers, the crowd at the bank premises has not come down considerably, as people still believe in ‘face to face banking’ rather than dealing with inanimate machines.  The confidence level of the general public while conducting ATM and online transactions remains surprisingly low, regardless of their literacy level.
13. While the risks of the bank staff in general and officers in particular have gone up, the bank managements do not show empathy and want to punish them even for the trivial mistakes they make and their wrong decisions that are in the nature of error of commercial judgement.

Where we stand today?

Until early 1990s, banking industry was at the top (second, I remember), in terms of staff benefits (both monetary and non-monetary).  But today, the condition of bank staff in public sector banks is abysmally low and quite pathetic. Major reasons for this degradation are:

1. Selfish and immoral leadership in the major Trade Unions has weakened the Trade Union movement itself, even though the ordinary members have maintained the same level of their unity, solidarity and fighting spirit that they possessed 30 years ago, without any diminution in them.
2. Entry of many more aggressive players in the market, with better technology, clearer focus and more successful strategies has made serious inroads into the traditional bastions of the public sector banks. 
3. Public sector banks could no longer take their long term customers for granted.  In case of any dissatisfaction, a customer has got a wider choice and he will not hesitate to switch to another bank.
4. Unhelpful policies of the government at the centre during the last 2 decades have done immeasurable harm and injustice to the public sector banks, as they have always supported the private players openly, thereby diluting the role and retarding the growth and development of all public sector banks.
5. The anger and displeasure exhibited by the general public, the media and also other sections of the salaried class towards the bank staff still remain.  This is the bankers’ own creation.  They earned the ill-will, jealousy and enmity of all other sections of the society, by displaying arrogant, discourteous, irresponsible and indifferent behaviour during 1969 to 1999.  I do not blame everyone who worked during this period.  But, at least 30% of bank staff were like that and the remaining 70% were mute spectators to the atrocities committed by such bad elements within their folks.
6. Today, staff working in all the government departments/institutions and other public sector undertakings (both centre and states owned) have surpassed us, leaving us far behind. 

How to correct the historical wrongs?

We must first know what wrongs were committed in the past. 

1. The first Bipartite Settlement was signed in 1966.  Going by the practice adopted then, the 5^th BPS must have been implemented from 1982.  But, our 5^th BPS could be signed only in 1989 and it took effect from 1987 onwards.  Thus, we lost 5 years, without any wage revision, during this period.
2. In the 5^th BPS, the duration of one wage settlement was formally raised to 5 years (from 4 years), without any valid justification.  This way also, we lost one more wage revision during the period from 1987 to 2007.
3. Before 6^th CPC (which took effect from 2006), 50% of the D.A. of the central government staff was merged with their basic pay and on the basic pay so merged, 40% additional increase was given and the revised basic pay became 210% of the previous basic pay before D.A. merger.
4. Whereas for the bank staff, a mere 45% increase in basic pay was granted in 9^th BPS.
5. Thus, the average rate of increase in basic pay per year was 21% for central government staff and it was a paltry 9% for bank staff during the period from 1996 to 2012.
6. In addition, for central government staff, 5 day week became a reality even before 5^th CPC.
7. During the past 10 years, the working hours of bank staff, more particularly the officers, got informally extended to anything between 9 to 12 hours a day, without any additional compensation.
8. Bank officers are required to work on many Sundays and official holidays.  For this also, no additional compensation is given.
9. Worst of all, no one ever bothers about the physical and mental health of bank personnel.

Now, how to correct these historical wrongs?  It’s a common knowledge that most of the bank officers are unable to avail the full quota of their leave as per their entitlement.  It can be seen that many officers could not proceed on leave, even when they are sick.  In return, what do they get in return?

It will be foolish to ask for compensatory off, for working on Sundays and other holidays, when we are unable to exhaust our eligible leave fully, because of which unutilised CL and PL lapse, at periodical intervals.  Lapsed leave is one big source of savings for the bank managements.

Therefore, we must compel the bank managements to give some decent compensation for working extra hours (over and above 8 hours on normal working days and 5 hours on Saturdays) and for working on Sundays and other holidays.  That will be a prudent demand.

What is the gap between what we aspire for and what we deserve?

Even if we compare our present pay scales with 6^th CPC pay scales implemented in 2006, our compensation is 40% lower.  Now, when the 7^th CPC recommendations are round the corner, I’m afraid that we may not even reach the level of 6^th CPC, after our 10^th BPS.  I shudder to think of our predicament after 01-01-2016, when 7^th CPC is due.

So, there is nothing wrong if I say that we deserve a minimum of 100% increase in our present scales.  But, certainly we can aspire for 50% increase.  We may keep 30% increase as the rock bottom level.

Remember, I have excluded pension and other benefits from the purview of both the government and the banking sector.  Only the monthly pay as reflected in the monthly pay slips is being compared here.

I can say with 100% conviction and certainty that if we take into account the educational qualifications, intelligence, problem solving ability, communication skills, corruption level, risks borne and the number of transfers in one’s career as the yardsticks, an average bank staff is far ahead of his counterpart in the government.  If number of hours worked per day and weekly holidays enjoyed are the simple criteria, then we may have to receive 150% of the salaries being paid to the government staff.

Then why shall we not demand a better package this time?

In the present circumstances, what best we can achieve?

Even if we get 6^th CPC wages in this settlement, it will be deemed a wonder.  But, I do not think the government will agree for our getting 6^th CPC wages in 10^th BPS.  So, in my assessment, even 25% increase at this point will be a big boon.  Anything beyond this level will only be a bonus for bank staff.

What is the time limit?

If we apply tremendous pressure on the UFBU leadership and the government from now on till the general elections (for the parliament), we may anticipate our wage revision to fructify before November, 2014.  If the government is helpful, sympathetic and co-operative, we may receive our revised wages before June, 2014 also.   But, judging by the seriousness shown by both the negotiating parties so far, the second possibility appears remote and only a miracle.

Conclusion

Before going to the future rounds of negotiations, our leaders must make their standpoint clear to all.  They shall not go to the negotiating table, only to listen what the IBA says.  They must do their homework properly. Apart from strike action, strict ‘work to rule’ may be announced.  If the IBA and the government are belittling us by offering pittance as wage increase, we must not hesitate to knock the doors of courts for justice.  The present UFBU leadership must realise that their credibility is too low today and they must demonstrate their goodwill and fire power in full measure simultaneously, in order to win back the confidence of all the lower cadre members.

Date: 16-01-2014                                                                                                              -  pannvalan

Fixed Match Results in Announcement of Single Digit Increase.   What is 9.5% Increase ?---

By Rajesh Goyal

 We have uploaded the small details about deferment of strike today (17th January 2014) in the afternoon.     After that we have received number of queries?   Now it is late night.   I tried to find out the answers for the same but no authentic details are available.    Broadly speaking, there are two types of queries:-

(a) Was it a fixed match?

(b) What is the meaning of 9.5% meaning?  How much it will translate into actual take home salary?

Frankly speaking, I too do not have much information.   However, as usual, we try to find out the details based on the inputs available through various sources and on net.  Some interesting facts have merged from our investigation based on various information available on internet.   Let me update our readers based on the details available through various sources :-

(a) Was it a fixed match ? 

 It is hard to get evidence to prove that it was a fixed match as it will be known only to IBA land core group of UFBU.   There is no doubt that it will be denied by the relevant parties, but the way the things have gone as per predictions, one feels that it was a fixed match.   I have a small insight which I would like to share with all our readers and they are free to draw their own conclusions.  

Was  IBA staff  well aware that they will be issuing a circular to Banks for deferment of strike on 17th January 2014 and they prepared the circular well in advance so that it can be sent to all the Banks after completion of the formality of a meeting between IBA and UFBU?   Today (i.e. 17th January, 2014), IBA on its website has uploaded a circular which has been sent to all banks.  The salient features of the said circular are :-

(i) The name of the file uploaded on IBA website is strikedeferred14012014.pdf   (The link at IBA website at the time of writing this article is as follows 

: http://iba.org.in/Documents/strikedeferred14012014.pdf). 

 Although some of you must have already downloaded the same, yet some others of you must also download it as it is likely that IBA may change the name of the link by tomorrow and union leaders may try to prove us wrong.   

Our readers must be aware that usually when we prepare a file under such a name,  the file name contains the date when it is prepared.   This files mentions the date as 14012014 i.e. 14th January, 2014, whereas circular is dated 17th January, 2014.   Was this circular prepared on 14th January, 2014 itself by IBA as they were aware that meeting dated 17th January 2014 is only a formalityand this circular should be sent immediately on the conclusion of the meeting

.

Thus a strong suspicion arises about the Match Fixing.  Some may say it is a conclusive evidence and IBA has made a blunder by preparing this circular in advance as it exposes the nexus of IBA and UFBU for a fixed match.   We leave it to our readers to draw the conclusions.

(ii) Are UFBU and Bankers Happy With This Announcement :    

IBA's above circular says "On being satisfied with the further improvement in offer in wage hike by IBA, the UFBU has decided to defer the strike scheduled on 20th & 21st January, 2014".   Thus UFBU is satisfied with the offer of 9.5%.  However, as per reported dated 16th Januayr, 2014,  published in Business Line, Mr  Murali said: “We are asking for a 30 per cent increase in the gross pay received by bank employees and officers".    As per report dated 17th January 2014 appearing in Business Line,  C. H. Venkatachalam, General-Secretary, All-India Bank Employees’ Association has told “We are satisfied with the outcome.  

IBA has agreed to complete the whole process of negotiations by June 2014. Therefore, all the programmes such as rallies, demonstrations, protests and strike till January 27 has been deferred,”   Thus, we can conclude the UFBU is more or less satisfied with the increase of 9.5% on Pay Slip components.  However, they will certainly press for minor increases here and there, and IBA may agree too for such minor adjustments / hikes.

(iii) What is meaning of 9.5% Incrase on PaySlip component ?    

This is still a mystery as nobody is sure whether IBA has clarified this in writing to UFBU.   I think UFBU should have issued the details today itself to clear the doubts.   But they seems to have kept quite and it has led to lot of rumors and different calculations.   With now clarity on DA merger and hike percentage, UFBU leaders can easily calculate the rough increase in the net take home salaries at least the beginning of each scale.     As I was going through various reports, 

 I found it interesting when  I came across the  report dated 16th January, 2014, of Business Line wherein  Mr Murali had rued "The IBA, which represents the managements of nationalised, private and foreign banks in the country, had offered only a 5 per cent rise in the ‘payslip component’ of salary.   

Actually, this will mean about 3 per cent of the gross pay.”    This will mean that 9.5% increase will result in about 6% increase of the gross pay?    With such a confusion, nobody is ready to commit as to what does 9.5% means?   Thus, in this age of internet, bankers are still groping as to what is the meaning of PaySlip increase and UFBU leaders are enjoying their silence. 

I hope soon UFBU and others will come out with clarifications on the points raised so that bankers do not feel cheated from all sides - Fixed match as well as lowest ever increase in 10th BPS.