Diwali bonanza for bank employees: Give them 1 month salary as advance on arrears, advises The Indian Banks' Association

Bank employees across the country are set to receive a month's salary in view of the ongoing festival season. The Indian Banks' Association (IBA) has asked all banks - both PSU and private -to disburse the amount to permanent employees as an advance on the arrears in pay increases for which negotiations are underway.

In a latter to the managements of all banks, the IBA noted that the salary hike negotiations with the United Forum of Bank Unions (UFBU) have not been completed and will require more time. It suggested that the banks pay employees an adhoc amount of one month's pay - basic and dearness allowance - in view of the festival season.

The IBA advised banks to make the payment as an advance on the arrears that the employees would receive after the wage hike is finalised.

While all permanent employees of banks who were on of the rolls on or before November 1, 2017, would be eligible for a month's pay, employees who joined after that date would be eligible for half a month's pay. The advisory applies to all banks that are party to the bipartite settlement signed between the IBA and UFBU.

The IBA circular to bank managements comes after 30 rounds of discussions with employee's unions on wage revisions. After drawing the line at a 10 percent increase on in-had pay in the last week of August, the bank managements have proposed a 12 percent increase. Still to be negotiated is how performance-linked pay will be structured, on which UFBU has laid out a number of conditions.

The IBA and UFBU have been locked in negotiations, which has left wage increases for bank employees pending since November 2017. The previous agreement, referred to as the 10th bipartite settlement, had run its course in 2017.