Talks fail; bank unions stick to strike plan

K.R. Srivats

New Delhi, Aug. 4 Bank unions have decided to go ahead with their two-day nationwide strike on August 6 and 7 after their bilateral talks with the Indian Banks’ Association (IBA) and the conciliatory talks under the aegis of the Chief Labour Commissioner failed on Tuesday.

The talks failed after the IBA further pruned its wage increase offer to 13 per cent and also made it clear that it cannot offer the existing pension scheme to those public sector bank officers and employees who had in the mid-nineties opted for provident fund as their second retirement benefit, after gratuity.

The United Forum of Bank Unions (UFBU), a representative body of nine unions, had urged the IBA to provide another option for about 3,00,000 employees to move from the provident fund scheme to the pension scheme.

“IBA today went back on its earlier offer and informed us that if at all an offer is to be made, it will be a reduced alternative pension scheme and cannot be the existing pension scheme. This is a major setback as we were hoping that the 2,50,000 employees and 50,000 persons who had retired will get another chance to opt for the existing pension scheme,” Mr C.H. Venkatachalam, UFBU convenor, told Business Line.

After months of negotiations, the IBA and the UFBU had agreed to appoint an actuary/consultant to arrive at the quantum of outgo to the banks if the 3 lakh people who had opted for the provident fund scheme were to be given another chance to shift to the pension scheme. The actuarial estimate of the liability stood at Rs 17,000 crore, of which the PF accumulations of these employees stood at Rs 11,000 crore.

The gap of Rs 6,000 crore had to be filled. The managements were asked to fork out Rs 4,200 crore and the employees were game to bring in additional Rs 1,800 crore. However, with the Government intervening in the wage talks, the IBA had toughened its stance on both the wage hike front as well as the pension option front, sources close to the developments said.

IBA had initially agreed to offer 17.5 per cent hike in wages, but later brought it down to 15 per cent. Now, the latest offer is for 13 per cent. The wage revision of public sector bank officers and employees is due from November 2007.