Guess who is giving hefty salary increases? While the private sector is busy cutting costs, and Monday's glamorous paymasters from Wall Street are down or out, old-fashioned public sector banks, with 80 per cent market share, think it is time to give an estimated 700,000 staff a big raise.
However, that does not cover top-level managing directors and executive directors, who are at the mercy of the Pay Commission.
Talks have already begun between the Indian Banks’ Association (IBA) and trade unions on wage revision, and industry sources say unions are seeking a 20 per cent hike.
“These are preliminary rounds and though the increase may not be as high as what has been demanded, banks will be under pressure to give bigger hikes to its employees, especially in the wake of healthy profits, higher employee productivity and high attrition,” said a leading banker.
Crude estimates suggest an annual bill of between Rs. 1,500 and Rs. 2,000 crore to the banks from the planned wage increases. “That should not be a cause for concern as all public sector banks have shown a healthy growth and increase in profits. Pay scales therefore must be improved,” said a union leader.
Some 5 to 10 per cent of PSU bank staff retire every year, putting a stress on existing staff, and poaching of public sector staff by better-paying private sector has also built up a strong case for raises in state-run banks.
There are also few takers for the entry-level jobs with public sector jobs having lost their old-world charm.