Potential Salary Increase and Five-Day Work Week for Bank Employees Expected by December 2023: Report

Public sector bank (PSB) employees can anticipate a significant boost in their fortunes, with reports suggesting a forthcoming salary hike ranging from 15% to 20%. Additionally, the implementation of a five-day work week is on the horizon, expected to take effect by mid-December. Insider sources reveal that the 12th bipartite settlement talks between bank unions, associations, and the Indian Banks’ Association (IBA) are in their final stages.

In an unprecedented move, negotiations are commencing with an initial offer of a 15% wage hike, marking a historic shift in the negotiation landscape. The final increase is likely to fall within the 15%-20% range, according to IBA sources cited by Financial Express.

The announcement of the five-day work week is anticipated to coincide with the salary hike notification or be promptly issued thereafter by either the Centre or the IBA. This development follows the expiration of the existing salary agreement for PSB employees on November 1, 2022, triggering negotiations between the IBA and bank employee unions for a new wage agreement.

Sources from the finance ministry indicate that the wage revision and altered workdays will also extend to regional rural banks. Notably, approximately 850,000 bank employees received a 15% salary increase in July 2020, resolving a three-year-long dispute on wage revision through a memorandum of understanding between the IBA and the United Forum of Bank Unions.

Insiders involved in the negotiation process suggest that a final meeting between the IBA and bank unions is imminent, where both parties will sign a memorandum of understanding for subsequent approval by the finance ministry. The salary increase is expected to surpass 15%, with negotiations reflecting the financial impact on PSU banks’ balance sheets. The Union Finance Ministry has urged public sector lenders to conclude negotiations by December 1.

Once the five-day work week is implemented, bank branches will remain closed on weekends. To compensate for lost hours, employees may be required to work extended hours on weekdays. Business hours are anticipated to start earlier and end 30-45 minutes later than current working hours. Customers seeking cash transactions may utilize ATMs, posing a minor challenge for cheque deposits during the two closed days.

Sources indicate that while cheque collection may be affected, the overall impact is minimal, considering the decreasing reliance on cheques in favor of digital banking services. Drawing parallels with the five-day work week in insurance companies and certain government sectors, providing this option to bankers is seen as a positive step