Bankers are not in a high-wage island

A bank officer earns just over half that of a Group ’A’ Central Government officer at the lowest level.

-------------------------------------------------------------------------
While the Pillai Committee recommendations, implemented in July 1979, established parity between bank and government officers, subsequent Pay Commissions over the years have widened the gap between the two categories.
-------------------------------------------------------------------------

K. Anandakumar

A myth has slowly gained ground that bank employees are paid inordinately high wages. While arriving at this opinion, there has been no attempt to compare the wages of bank employees with other comparable professions, chiefly those employed in government. A closer scrutiny would suggest that bank employees are, in fact, poorly paid, and not part of a high-wage island.

In a perfect market, every factor of production gets its due share. But in reality, markets are unfair and imperfect. The stakes are loaded heavily against the working class; that explains the growing disparity between the capital-owning/top managerial class and the labour class, despite breathtaking GDP growth rates.

The disparity exists not just vis-À-vis labour and the managerial class, but also across categories of the labour class. The latter exists because “relativity” has not been maintained.

There are two forms of relativity that need to be considered — internal relativity, which looks into whether the salary levels within the organisation correspond to the organisational hierarchy; and external relativity, which deals with the relationship between the wages paid and the market wages.

GOVT EMPLOYEES FAVOURED

Prior to 1979, Group ‘A’ Officers of Central Government were earning less than bank officers. In 1979, the Pillai Committee was constituted to study the salary structures of bank officers and Group ‘A’ Officers of the Central Government and bring equity among various banks.

The Committee observed that the functions and responsibilities of bank officers in the new set-up were comparable to those of Group ‘A’ Officers in the Central Government and suggested pay parity between them.

The Pillai Committee recommendations were implemented in banks with effect from July 1, 1979, and the pay scale of the lowest rung of officers in banks were equated with pay scales of the lowest rung of Group ‘A’ Officers of Central Government at Rs 700.

The parity which was established by implementing the Pillai Committee Recommendations was distorted by subsequent Pay Commission revisions. In the Sixth Pay Commission, the wages of Group ‘A’ Officers zoomed past the bank officers’ wages. External relativity was given a quiet burial.

It is quite appropriate to compare the salary of bank officers with Group ‘A’ Officers of the Central Government to ascertain whether bank officers constitute a high-wage island.

The basic pay according to the Fifth Pay Commission for Group ‘A’ Officers was Rs 8,000 and the corresponding pay for bank officers was Rs 7,100. But in the Sixth Pay Commission the basic pay for Group ‘A’ Officers of the Central Government went up to Rs 21,000 (basic pay Rs 15,600 + grade pay Rs 5,400) whereas the pre-revised basic pay of bank officers was only Rs 10,000.

Between the Fifth and the Sixth Pay Commissions, the basic pay of Group ‘A’ Government officers went up by 162.5 per cent.

The gross salary of government officers was Rs 31,312, whereas the bank officer’s salary was only Rs 16,110. It can be seen that a bank officer draws a gross salary which is just 51.45 per cent of the gross salary of Group ‘A’ officers at the lowest rung.

Even house rent allowance was paid at 30 per cent of basic pay for government officers, whereas bank officers were getting a maximum of 8.5 per cent in metros. The pre-revised salary of the bank clerk was Rs 6,600 as compared with the Central Government clerk’s salary of Rs 11,000.

Many State Governments have adopted the Sixth Pay Commission Recommendations. A number of public sector undertakings have implemented the Pay Commission recommendations as a benchmark for their salary revision.

The government, public sector and private sector undertakings are paying high salaries to their entire workforce, with the exception of the banking sector. Given these facts, can bank officers and employees be described as belonging to an island of high wages?

MORE WORK, LESS PAY

The business hours for the customers used to be four hours a day and working hours for the staff was seven hours with a 30-minute lunch break. To provide best customer service, the business hours have been increased to six hours, within the stipulated working hours of seven hours a day. After business hours, the bank staff need three to four hours to complete back-office work at the branch level, because of which the working hours for officers are practically extended to about 11 hours a day without any monetary compensation or increase in salary structure, whereas new generation private sector banks duly compensate the extended working hours in their salary packages.

We have completed 40 years of bank nationalisation, and we owe our gratitude to the then Prime Minister Indira Gandhi for taking the bold step. The country’s transformation since then is in no small measure due to the role played by nationalised banks.

We feel proud to work in nationalised banks and be part of the nation-building exercise.

We started with social banking but now have almost attained the standards of global banking. Yet, we are paid less than municipal wages.

The need of the hour is to restore the pay parity with government employees and uphold external relativity as done by the Pillai Committee 30 years ago.

(The author is Vice-President, AIBOC.)