The Indian Banks’ Association (IBA) signed the bipartite wage agreement with the bank employees representatives paving the way for a 15% wage hike. The wage hike and the pay hike will be effective from the current financial year. The PLI Performance linked incentive scheme in public sector banks is completely based on operating profit/net profit of individual lenders, and is optional for private and foreign banks.
15% pay hike along with performance-linked incentive (PLI) are to be given for employees working in public sector banks, a few old-generation private banks and some foreign banks. The PLI has been introduced for the first time to cultivate competition and to recognize and reward the performance of top performers. This agreement enables renegotiation of wages once in every five years. The agreement includes various employee benefits and changes in service conditions.
One notable change in the banking sector is the computerisation in the ’90s was made possible through a wage agreement. The tenure of the previous agreement ended in 2017, the current agreement was delayed because of protracted negotiations and the pandemic-induced lockdown. The wage hike will adds an additional cost of Rs 7,898 crore for banks. The other public sectors including LIC and other state-owned insurance companies, the RBI and public financial institutions like Nabard may get significance from the bank wage agreement.
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