Salary Hike, Five-Day Work Week For Bank Employees Likely By December 2023

Public sector bank employees are in for a notable salary hike ranging between 15% to 20%, with talks on the 12th bipartite settlement reaching their final stages between bank unions, associations, and the Indian Banks' Association (IBA). Expectedly, the implementation of a five-day work week could commence by mid-December, as per sources closely tracking these negotiations.

According to IBA sources, this salary increase proposal marks a historic beginning, signaling a significant improvement from previous negotiations. The formal announcement of this wage hike is anticipated to coincide with or shortly follow the notification for the five-day work week, likely to be announced by either the Centre or the IBA.

The expiration of the existing salary agreement for Public Sector Bank (PSB) employees as of November 1, 2022, initiated negotiations between the IBA and bank employee unions for a revised wage agreement.

In addition, reports from the finance ministry indicate that this salary revision and workweek change will extend to regional rural banks as well.

Previously, in July 2020, about 850,000 bank employees saw a 15% increment in their salary packages, settling a three-year-long dispute on wage revision between the IBA and the United Forum of Bank Unions.

The negotiation parties have hinted at an imminent final meeting where they will sign a memorandum of understanding, subsequently requiring approval from the finance ministry. Negotiations are intense due to the impact on the balance sheets of Public Sector Undertaking (PSU) banks.

The proposed five-day work week would mean branch closures on weekends. To offset these lost hours, employees might work extended hours on weekdays, with earlier opening times and slightly later closures. Bank customers could resort to ATMs for cash-related transactions during weekends, while depositing cheques might pose a challenge.

Despite potential disruptions in cheque processing for these two days, sources highlight the declining usage of cheques as digital banking gains popularity. Comparing this move to other sectors enjoying a five-day work week, such as insurance companies and certain state and central government employees, advocates see it as a step in the right direction for banking employees.