Govt under pressure to give pension for PSU bank employees
In the wake of the financial sector collapse, widespread job cuts and a lack of social security net in the country, pressure is building up on the government to provide pension benefits to all employees of the PSU banks, reports Mahua Venkatesh.india Updated: Nov 27, 2008 20:00 IST
In the wake of the financial sector collapse, widespread job cuts and a lack of social security net in the country, pressure is building up on the government and the managements of the state-owned banks to provide pension benefits to all employees of the PSU banks. The issue has been brought up at the recent meetings between the Indian Banks’ Association and trade unions on wage revision.
Though, this is not the first time this issue has been brought to the fore but in the context of the current fiasco, the government may have to look it, a banking source said.
That apart, the issue has come up at a time when foreign and private sector banks are battling for survival, public sector banks have registered substantial growth in business and profit margins.
Employees, however, would have to forgo their provident fund benefits in order to switch to pension options. “Both pension and provident fund benefits may not be provided to employees,” a banking source said.
This would also mean additional financial burden on PSU banks.
For banks, about 15-16 per cent of the total expenses is directed towards employees. The 27 PSU banks have about seven lakh employees at present. Banking sources said depending on the employee strength of the bank, liabilities could vary from Rs 800 crore to Rs 1,000 crore.
“Trade unions have been bringing up the issue for sometime, but it has not got any weight till now as it would have meant sizeable outflow for PSU banks but now, things are different, we will look into the matter,” an insider said.
First Published: Nov 27, 2008 19:56 IST