Govt to PSU bank chiefs: Finalise wage revision before Nov 1

TENS of millions of employees in state-run banks will be cheering this. The finance ministry has asked the heads of public sector banks to finalise the modalities for timely implementation of the next pay revision from November. There are 21 public sector banks, after merger of six subsidiary banks with SBI, in the country, with a total employees of about eight lakh people.
In a communication to CEOs and MDs of the state-owned banks, the ministry advised...
them to initiate the steps for smooth conclusion of next wage revision of the employee within the time-frame.
"However, it is seen that several banks are yet to proceed in the matter," it said, requesting the PSBs to "look into the matter and conclude the next wage revision prior to the effective date of November 1, 2017". The wage revision of public sector bank employees takes place every five year.
The last revision was effected in November 2012. In the last wage negotiation between PSU banks employee unions and bank management, Indian Banks' Association (IBA) had settled at 15 per cent hike.
Recently, Banks Board Bureau chief Vinod Rai had made a case that the compensation package across the board of public sector banks needs to be improved.
"Maybe, we are not able to do much with the fixed part of compensation package but (with) variable part we are hopeful that in the next financial year (2017-18), we will be able to introduce a far more attractive package which do have bonuses, ESOPs and other performance linked incentives as part of the package," he had said.
Rai has also suggested that managing directors of the public sector banks should be appointed for minimum 6 years.
Earlier, in January this year, Rai had said that as part of the efforts to attract more professionals into the public sector banks, the BBB will revamp the compensation package of employees and introduce bonuses, employee stock options (ESOPs) and performance-linked incentives from April 1 this year, its Chairman Vinod Rai said.
The BBB has also been mulling the idea of ensuring a longer tenure for those appointed as executive directors and chief executive officers.
“If we provide, say, a six-year tenure, there is greater degree of compulsion of accountability that these officials will be subject to,” Rai said. Rai said that the compensation package of the PSBs needed to be improved in order to attract more professionals. “We may not be able to do much about the fixed component, but we can change the variable component.
“From the next financial year, we should be able to introduce bonuses, ESOPs and performance-linked packages. There would be both monetary and non-monetary incentives,” he added.
Later, asked whether the improved package would be applicable only for senior management, Rai told BusinessLine that it would be available across all segments, including senior management and middle-rung executives.