The bank employees and officers will get a bonanza from the wage settlement arrived at on Friday between the bank unions and Indian Banks' Association (IBA). The Income Tax Department will also collect some amount as tax deducted at source (TDS) from the near Rs. 10,000 crore of wage arrears that are likely to be distributed in cash sometime in February next year, sources said.
"It will take three months for us to finalize the settlement and implement it. The arrears for two years and three months (since November 2007) are likely to be disbursed in cash at one go," C.H.Venkatachalam, Convenor, United Forum of Bank Unions (UFBU), told Business Line. He also said that the annual average per capita increase for public sector bank officers would be Rs. 91,800 and in the case of workmen employees it would be Rs. 56,200.
Just as the Sixth Pay Commission award for government employees had a positive impact on the economy and increased demand, the payment of arrears in cash to bank employees is also likely to give a boost to the growth impulses. This is even as the quantum of arrear payout under the ninth bipartite settlement being substantially lower than the arrear payment under the Sixth Pay Commission award.
Under the settlement, public sector banks have agreed to an aggregate annual wage increase of Rs. 4,816 crore (17.5 percent increase over wage bill of Rs. 27,520 crore as on end-March 2007). This amount of Rs. 4,816 crore pertains to only public sector banks and there will be a similar 17.5 percent wage hike for employees and officers in old generation private banks and a few foreign banks, Venkatachalam said.