DATA ANALYSIS AND INTERPRETATION

BRIEF OF WAGE NEGOTIATIONS IN BANKING INDUSTRY

In the era of Bank Industrial Tribunals (1949-1960)
There is a general impression amongst many of us that INTUC is a late starter into the Banking
Industry. But in reality it is not so. If one goes through the history of various Bank-Awards, which
determined the service conditions of the bank employees then, one would find that the INTUC's
affiliated union entry into the banking industry is almost five decades old. Yes, from the Sen Tribunal
(1949-50) INTUC unions have entered their appearance and fought for better wages and other service
conditions.
Shri.C.L Dudhia, Barrister at Law represented INTUC unions. From that period whether it is Divatia
Tribunal (1951) or Sastry Tribunal (1952-53) or Labour Appellate Tribunal (1954), INTUC unions
were represented by their Federation viz. Bank Employees Federation. In the year 1959, the INTUC
Federation in the name of All INDIA BANK EMPLOYEES FEDERATION (AIBEF) submitted its
Charter of Demands on behalf of employees of banks, which was referred to along with the demands
submitted by AIBEA and AISBEF (SBI) to Desai Tribunal, constituted by the Government of India on
the 21st March 1960. Shri. V. N. Sekhari was then the General Secretary of AIBEF.
INTUC in the era of Bipartite Negotiations (1966-2000)
The Award of the National Industrial Tribunal presided over Mr. Justice Kanthilal T Desai (1962)
popularly known, as "Desai Award" was the last in the process of industrial adjudication of BankDisputes. Thereafter, came into existence a bipartite system between the Indian Banks Association and
the industry level bank unions in resolution of disputes between the managements of banks and the
unions. The first settlement which is known as the First Bipartite Settlement covering the wages and
other service conditions of the bank employees barring State Bank of India was signed on the 19
October, 1966 between the IBA representing bank managements on the one hand and the All India
Banks Association (AIBEA) and the All India Bank Employees Federation (AIBEF) on the other.
It would be of interest for you to know that the AIBEF, the then bank federation of INTUC was
represented by Shri.N.K.Bhatt, M.P, Chairman of the Federation along with Shri.N.P.Desai, Vice
President, Shri V.N.Sekhri, General Secretary and Shri O.P.Nigam, Joint Secretary. Apart from the
usual main features of a wage settlement such as revision of wages and other service conditions, the

first Settlement provided for Special Casual Leave eligibility 21 days for Office Bearers and 17 days
for Central Committee Members of AIBEA/ AIBEF and 7 days for Office Bearers of their State or
Regional Organisations per year for attending meetings and conferences of bank employees. This
facility has been subsequently extended by IBA to other organizations as well.
During the Second Bipartite Settlement (12th October, 1970) the INTUC's bank federation has not
signed the settlement. I am not able to trace out the reasons therefore. This happens to be a settlement
between the IBA and AIBEA only.
The Third Bipartite Settlement was signed on the 1st August 1979
This time there were three parallel negotiations between IBA and AIBEA and NCBE on the one hand
and between IBA and Indian National Bank Employees Congress (INBEC), Banking wing of INTUC
on the other and third round of negations was between the IBA and the National Organisation of Bank
Workers (NOBW). Since there were three parallel negotiations, three identical Settlements were signed
between the parties.
The third Settlement was signed by Shri.C.L.Dudia, Bar at Law, President, Shri D. P. Roy, General
Secretary, Shri.S. N. Mishra, Secretary and Shri R. P. K. Murugesan, the then Asst. Secretary on behalf
of INBEC. It would also be interesting to know that on behalf of NOBW Shri. Subramaniam Swamy,
President along with other office bearers signed the Settlement.
From this Settlement the system of revision of basic pay underwent a great change from adhoc
increase to merger of a part of deamess allowance with the existing basic pay with consequent
automatic upward revision in other allowances subject to adjustments by prescribing a cap on them.
This time the basic pay was revised by merging dearness allowance at 200 points in the All India
Average Working Class Consumer Price Index (General) Base 1960=100 popularly known as
Consumer Price Index (CPI). The effective date of the Settlement was from 1Bt September 1978 and
the period of the settlement was for four years.
The Fourth Bipartite Settlement dated 17th September 1984
This time there were two parallel negotiations, which IBA held between AIBEA and NCBE on the one
hand, and INBEC on the other. The Settlement was signed by Shri.N.K.Bhatt, M.P as its President,
Shri.D.P.Roy, General Secretary, Shri.R.P.K.Murugesan, Joint Secretary, along with Shri.D.Ram,
Shri.V.S.Malhi, Shri.Ram Rahim Johny and Shri Subhash S Sawant, the other office bearers on behalf

of INBEC.This time the revised basic pay was arrived at by merging that portion of dearness
allowance at 332 points at CPI. The four-year Settlement was effective from 1-7-1983.
The Fifth Bipartite Settlement date 10th April 1989
The period between 1986-1988 had been most turbulent in the history of the INTUC's banking wing.
INTUC decided to reorganize its Industrial Federations in Banking, Insurance and other Financial
Sector, hence dissolved the INBEC and INBOC along with LIC and GIC unions with effect from 16th
July, 1987.
On the 2 August, 1987, therefore, the workmen-unions in the banking industry affiliated to INTUC
held a meeting at Grand Hotel, Mumbai on the 2 August, 1987 decided to form a new Federation under
the name and style of "Indian National Bank Employees Federation (INBEF) under the Chairmanship
of Shri. K.Ramamurthy, M.P. The meeting elected Shri.Ramamurthi and Shri R.P.K.Murugesan as the
President and General Secretary respectively. I would be failing in my duty if I do not acknowledge on
this great occasion, the all out support of Shri Ramanujam ji who was then the President of INTUC
and the tireless efforts of Shri Ramamurthi ji, our President then, but for whom the INBEF would not
be what it is today.
Consequently, INBEF became a party to the Fifth Bipartite Negotiations and signed the Settlement on
the 10 April 1989. As in the past there were parallel negotiations and identical Settlements one with
AIBEA and NCBE together and the other with INBEF. This time the new scale of pay was arrived at
merging that portion of dearness allowance at 600 points, CPI (1960=100) The five-year Settlement
came into force retrospectively with effect from 1s November, 1987 with a provision that fresh Charter
of Demands shall be submitted by the Unions six months before the expiry of the Settlement and the
negotiations would commence three months before. On behalf of INBEF Shri C.L. Rajarathnam, Vice
President, Shri R.P.K.Murugesan, General Secretary, and other office bearers viz. Shri.D.Ram,
Shri.Subhash S Sawant, Shri.Dinesh Vegurlekar, Shri. J. G. Verma and Shri.Ram Rahim Johnny signed
the Settlement.

Sixth Bipartite Settlement dated 14th February, 1995

For the first time in the banking industry the era of separate negotiations with different Unions has
come to an end. Great expectations of the bank employees aroused in them with the implementation of

the Fifth Pay Commendations, the Sixth Bipartite Negotiations began. At the same time there was a
growing realisation among the bank-unions that only by unity and united efforts on the part of all
unions they can realize aspirations of their members. So all the four unions viz AlBEA, NCBE, INBEF
and BEFI prepared a Common Charter of Demands that led to common negotiations between the IBA
and the industry-level Unions. Consequently a five-year Settlement was signed between the parties on
the 14 February 1995 with retrospective effect from 1s November 1992.
The merger of dearness allowance for the purpose of revision in the basic pay was at 1148 points at
CPI (1960=100). The five-year Settlement, which was effective from 1st November 1992, was a single
document signed by all the four industry-level Unions viz the AIBEA, NCBE, INBEF and BEFI. On
behalf of INBEF Shri.R.P.K.Murugesan, General Secretary, Shri Jogen Sarkar, Vice President and
Shri.Subhash S Sawant, Dy General Secretary and Shri. R.Kunchithapatham signed the Settlement.
Other connected developments in the Sixth Settlement are explained under JSC.
The Seventh Bipartite Settlement dated 27th March 2000
The current Settlement ie the Seventh Bipartite Settlement was a joint Settlement with IBA consequent
to joint negotiations between IBA on the one hand and five industry-level Unions viz. AlBEA, NCBE,
INBEF, BEFl and NOBW. This five-year Settlement is effective from 1s November 1997 and due to
expire as on the 31s October 2002.
The dearness allowance at 1684 points at CPI (1960=100) was merged for the purpose of revision in
basic pay. Besides the above Settlements, there were many other Settlements such as Settlement on
Computerisation and Mechanisation, Pension, Settlement on revision of wages and other service
conditions for B class banks, Residual issues etc. where the Banking wing of INTUC had been a party.
It is not my intention to bring out here the history of Bank-Awards or the salient features of various
Bank-Settlements with a historical perspective. My intention is to bring to your notice the various
stages of the INTUC's Bank Federation which to day is INBEF. INBEF as the inheritor of this great
tradition could legitimately feel proud of. Given the freedom and thrust, I earnestly feel that the day is
not far off when INBEF would emerge as the strongest organization in the banking industry.
The Eighth Bipartite Negotiations and UFBU
By exercising an option anytime during a block of 2 years or 4 years, as the case may be, an employee
can either undertake travel availing of leave fare concession and claim reimbursement upto his
entitlement or to encash the facility for the concerned block. The option so exercised shall be
irrevocable for the block concerned. On opting to encash the facility, he will be entitled to receive a

lump sum equivalent to 75% of notional train fare for the admissible distance (depending on a 2 year
or 4 year block) by the entitled class, subject to deduction of admissible tax at source.
Leave Fare Concession for travel to place of domicile is not encashable. An employee opting to encash
his LTC shall prefer the claim for himself and his family members only once during the block/term in
which such encashment is availed of. The facility of encashment of privilege leave while availing of
Leave Fare Concession is also available while encashing the facility of LFC. Providing, however that
an employee so encashing the facility of leave fare concession shall proceed on leave for a minimum
period of 4 days.
The post VRS situation has witnessed a very alarming shortage of staff at all levels. Extremely tight
work at all offices more particularly at branch level has necessitated late sitting without adequate
compensation. In many Banks there have been dislocations in the work and the life pattern of the staff.
In the absence of fresh recruitments, the existing staff is over burdened with heavy routine.
Promotional opportunities in almost all Banks, of late, are declining very fast. The existing employees
have to shoulder additional responsibilities for nominal compensation in the name of Special Pay
which is disproportionate to such additional responsibilities. These issues will have to be kept in mind
while negotiating with the IBA.
Mere percentage increase in the existing Pay Scales with or without merger of a portion of dearness
allowance, as have been done in the past, would not be adequate and reasonable under the present
circumstances. First of all the present Special Pay paid as Functional Allowance should be rationalised.
There are too many of such Allowances! Secondly employees should not be allowed to rot in the same
pay scales even after completing 20/25 years of service. This has led to frustration among the
employees.
There should not only job satisfaction for them but also a sense of pride in their status. Just an
additional payment of Special Assistant Special Pay or Senior Assistant Special Pay would not satisfy
them. There should be distinct and separate pay scales for each of these categories. To begin with,
there may be 3 or 4 Pay Scales for Clerical Cadre. Similarly there may be at least 2 Pay Scales for
Subordinate Cadre also. From one sale to the other, there should be automatic switch over as in the
case of Scale I to Scale II in the Officer Cadre. The introduction of multi-scale system is not new to us.
It is available in the Officer Cadre within our own banking industry and they have six scales. Similar
multi-scales within the same cadre are available in RBI, LIC, and GIC in the Financial Sector and even
in Central/ State Government.

The apprehension expressed by some Unions during the 5 Bipartite Negotiations when INBEF placed
such a proposal that the introduction of multi-scales would encourage a split in our Unions and would
lead to the formation of cadrewise Unions is unfounded. Even now there is multiplicity of Unions.
However, we should not stand in the way of employees' career progression for trade union
considerations. Opinions gathered by INBEF from various Union-officials and general bank
employees reveal that they would wholeheartedly support any such idea. INBEF would certainly
initiate such a move in the joint forums of bankmen but much depends on the response of other
constituents of UFBU once common approach formula is adopted.

IX Bipartite Settlement with Pension Deduction met on agreement

This has reference to your letter No.HR&IR/MV/76/90/155 dated 21st April 2010 inviting us to sign
the 9th Bipartite settlement on 27-04-2010. We would like to draw your attention to the discussions
held on 16th April, 2010 in consonance to the modalities signed on 27-11-2009 that interalia stipulates
- 30% (Rs.1800.54 crores) by all the employees who are in service of the banks as on the date of the
Memorandum of Settlement/Joint Note to be signed between the parties in this regard. This amount
will be recovered from the arrears payable on wage revision. you had informed us that all employees
who are in service shall have to pay 1.6 times of the revised pay as on 01-11-2007.
To our utter surprise just on the eve of the signing agreement for which the entire workforce serving in
the industry are eagerly awaiting, you have violated from the understanding reached earlier and now
insisting upon us to agree that only the CPF optees shall have to bear the entire burden of 1800.54
crores by contributing 2.8 times of their pay as on 01-11-2007 in lieu of 1.6 times that was agreed
upon.
This is a major deviation from the earlier understanding as our organisation could have submitted
alternate proposal on 27-11-2009 for the benefit of the employees to which we have been deprived of.
Further since 01-04-2008 quite a large number of employees have retired from service for whom you
have decided to recover 56% in addition to the Banks contribution that they will be surrendering for
opting pension. This will definitely jeopardise the interest of both the serving and retired employees as
the very basis of actuarists calculation will undergo a change.

In view of the above we would like to submit that we are signing the 9th bipartite settlement under
protest without prejudice to our rights to maintain the sanctity of the understanding reached earlier.