Public sector banks, including the country’s biggest lender State Bank of India, will remain shut on alternate Saturdays, according to a deal reached between employee unions and the Indian Banks’ Association, which represents lenders.
Employee unions were demanding a five-day week, but an agreement was reached on keeping alternate Saturdays off. This means more than two dozen banks in the public sector may not function on alternate Saturdays.
“Long pending demand of holiday on second and fourth Saturdays for the bank employees have also been reached,” AIBEA General Secretary C H Venkatachalam said.
An agreement was also reached to hike wages of over 7 lakh public sector bank employees by 15 per cent. The wage hike will be applicable from November 2012 and will be valid for five years.
The bank unions were demanding 19 per cent hike in wages and five-day work week.
Unions reached the wage settlement after 18 rounds of negotiations over more than two years, Vishwas Utagi, a senior union official, said. The new salaries, applicable for more than 7 lakh bank workers, will be backdated to November 2012 and valid for five years, he said.
Mr Utagi said the estimated cost for banks as a result of the salary increase will be an annual Rs. 4,725 crore.
The deal comes ahead of the Union Budget and will help the government avert a four-day strike starting February 25. A strike would have paralysed some of the country’s largest banks, crippling cash transactions and cheque clearances in an economy where card payments are still unusual. It would have dampened money market and foreign exchange trading volumes, potentially increasing volatility.