Banks' wage talks with unions stalled by government fiat

19 June 2009

The wage revision talks between bank unions and the Indian Banks' Association (IBA) have run into a deadlock as the United Forum of Bank Unions has rejected IBA's revised offer of 15 a per cent raise, and is insisting on the 17.5 per cent offered earlier.

On Wednesday, the IBA conveyed to the UFBU, a representative body of nine bank unions, that its earlier offer of 17.5 per cent stands reduced to 15 per cent annual increase over the wage bill as on 31 March 2007. The move to prune the offer is reportedly on the advice of the union government, which is chary of inflating banks' wage bills.

The last time the bank unions and the IBA discussed the wage revision issue was on 9 June. At the meeting, the IBA was willing to improve its offer from 15 to 17.5 per cent, subject to approval by the management committee. In view of this, the UFBU deferred the strike it had called for 12 June.

But now, UBFU convenor C H Venkatachalam said IBA had told the unions that it could not offer more than a 15 per cent increase, based on the government's advice. ''The talks, which were progressing smoothly to date, have met a hurdle. The reduction in the offer shows a lack of credibility on IBA's part,'' he said.

The UFBU convenor has now written to the new IBA chairman, M V Nair, seeking a meeting with the latter on the issue. Interestingly, Nair is also the chairman of the IBA's negotiating committee that is in talks with the bank unions on the wage revision issue.

Nair said the negotiations were still on and the final result would be available only after nine sittings of the managing committee. He reiterated that a 15-per cent rise was what the committee was looking for. Nair, who has been spearheading the negotiations from the banks' side, is likely to meet finance ministry officials in New Delhi on Friday to discuss the issue.