Govt invites striking SBI employees for talks
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Govt invites striking SBI employees for talks

Finance Minister Chidambaram has expressed hope that a satisfactory agreement will be reached today.

india Updated: Apr 09, 2006 13:19 IST

Government on Sunday called a meeting of the striking State Bank of India (SBI) employees and management after their inconclusive talks in Mumbai on Saturday night.

Finance Minister P Chidambaram expressed hope that a "satisfactory agreement" would be reached to end the seven-day-old strike over the demand for higher pension.

"Since the talks had stalled last night, Government has called both the management and union to Delhi for talks. They are expected to reach Delhi later today," Chidambaram told reporters.

Senior officials of the Finance Ministry will facilitate the talks, he said. "It is my hope that the talks will continue and a satisfactory agreement will be reached today."

Promising to give the most "sympathetic consideration" to the proposals, he however emphasised that the Government has a duty to uphold the larger interest of the SBI and also the public, who are the "ultimate owners" of the Bank.

Over two lakh employees of the country's largest commercial bank have been on strike, demanding across-the-board pension hike to the tune of 50 per cent of the last salary drawn.

On Saturday, during their negotiations with the SBI management in Mumbai, the union had climbed down over their demand.

Meanwhile, the Reserve Bank has allowed state governments to shift their business to other PSU banks to ensure that their financial operations are not affected. Some states like Uttar Pradesh, Gujarat and Bihar have already shifted their accounts to nationalised banks.

"RBI has already announced some measures and some may be announced today," Chidambaram said.

Chidambaram said some states have already shifted to other banks, that is unavoidable, because every state government is entitled to protect its interests, interests of its employees and the people to whom the state government's funds should flow.

Practically, all the state governments have their accounts with the State Bank of India.

Asked what will happen if talks fail, Chidambaram said, "it was a hypothetical question. Why do you wish that talks will fail. I wish that talks will succeed."

Government has been patient and advising both the management and the unions to reach a settlement and send a proposal to it, he said adding, it was for the first time yesterday that it received a formal proposal.

Noting that some basic issues were involved in the negotiations, Chidambaram said that SBI employees receive pension as a third benefit, besides provident fund and gratuity unlike in other nationalised banks and pubic sector undertakings where there were only two benefits of gratuity and pension or contributory provident fund.

Therefore, Chidambaram said the benefits of SBI employees and those of other nationalised banks and PSUs are not comparable.

Any revision in the pension formula of SBI should not "spark off competitive demands" from employees of other nationalised banks and PSUs, he said.

Giving details of the SBI pension formula, Chidambaram said the employees had a ceiling in their pension between 1993 and 1999. In 1999, ceiling was replaced by cut-off point.

The cut-off point continued after the settlement in March 2000 and in June, 2005, he said adding therefore negotiations in pension formula must include suitable re-adjustment of the cut-off point.

As per the cut-off point, SBI employees get pension of 50 per cent of their last drawn salary up to a ceiling of Rs 8,500 and above that pension is given as 40 per cent of last drawn salary.

As per the toned down offer made by the unions yesterday in Mumbai, the unions were willing to settle for a cut-off at the level of AGMs. This meant that up to the AGM level, the pension would be 50 per cent of last drawn salary.

However, Banking Secretary Vinod Rai made it clear yesterday that the Government could not accept anything which would create asymmetry between SBI employees and those of nationalised banks.

Under the present rule, Chidambaram said the management of SBI may contribute up to 10 per cent of pay and allowances of an employee to the pension fund. However, in the recent years, the management has been contributing more than 10 per cent, he said.
Citing example, he said the management contributed an additional Rs 790 crore in 2004-05 against 10 per cent requirement amounting to Rs 245 crore.

Similarly, in 2005-06, the additional contribution is reported to be Rs 835 crore. Therefore, while determining the new pension formula, it is necessary to bear in mind the rules as well as the capacity of the management to contribute to the fund to sustain the payment of pension.

First Published: Apr 09, 2006 11:20 IST