IBA calls 23% wage hike demand irrational

The Indian Banks' Association (IBA) has termed the demand by bank unions of a 23% hike in wages "irrational, illogical and exorbitant".

The IBA is a representative body of banks, which acts on the mandate given by the banks for wage settlement.

IBA chief executive MV Tanksale said in a statement that the organisation's negotiating committee comprising bank chairpersons of both, public and private sector banks, had begun talks with the unions since October 2012.

"So far, we have had 14 rounds of discussions and two major issues – effective date of implementation and merger of dearness allowance have been clinched. During the seventh and eighth bipartite settlements, the wage increase was between 10% and 13%," he said.

Tanksale added that the ninth settlement was an exception as compared to earlier settlements and cannot be quoted as precedent. "In the current wage settlement, a hike of 11 per cent on salary and allowances has been offered, based on the paying capacity of all the banks, lower profitability, higher requirements for provisions and further capital requirement under Basel-III, which translates into 12.5% on the balance sheet cost. Some banks are unable to afford this as well," he said.

IBA has made an appeal to unions and associations to give up the agitational path and return with pragmatic approach to the negotiation table to resolve the issue through bipartism.

Despite the appeal made by IBA as well as chief labour commissioner (central) at the conciliation meetings not to resort to strike and resolve the issue through bipartism, the unions went on a day-long strike on November 12, followed by zonal relay strikes from December 2 to December 5.

Meanwhile, IBA has requested to all member banks to assess their paying capacities and advise the association accordingly.