Bank employees in 26 public and 12 private sector institutions will see their salaries increase by 17.5 per cent, with the Indian Banks' Association (IBA) and bank unions today signing an agreement on pay revision.
The agreement also gives an opportunity to those who had not opted for the pension scheme in 1995 to join the scheme again.
"We have signed an agreement today with banks' unions and according to the new agreement, employees and officers will get a 17.5 per cent hike in salaries with retrospective effect from November 1, 2007," IBA deputy chief executive K Unnikrishnan told PTI in Delhi on Tuesday.
Almost 800,000 employees in 26 public sector banks, 12 private sector banks and eight foreign banks will be benefited from this new wage agreement, he said.
In all, there are over 10 lakh (1 million) people working in the country's 26 public sector banks and 23 private sector banks in the country, besides 31 foreign banks.
The revision will cost banks Rs 4,816 crore (Rs 48.16 billion), including arrears payment from November 2007 which will be given in one-go, he said.
There is good news also for employees who did not opt for the pension scheme in 1995, he said.
"The new agreement gives an opportunity to those who had not opted for the pension scheme in 1995, but contributed to Provident Fund (PF), to join the scheme again. Those who are interested can contribute to the arrears directly to the pension fund with an amount to bridge the gap in the fund.
Those who already retired from the service can also join the scheme, he said.
A total of 270,000 employees and 60,000 pensioners will be benefited by the second pension option in the agreement, Unnikrishnan said.
The United Forum of Bank Unions (an umbrella body of nine bank unions) and the IBA have also mutually decided that existing bank employees will have to share 30 per cent of the additional pension burden while banks will shoulder the balance.
Public sector bank employees in general are entitled to only two retirement benefits-pension or provident fund and gratuity. The exception is with SBI employees who get three superannuating benefits--provident fund, gratuity and monthly pension.
