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Kingfisher NPA recovery alone can finance wage hike

Kingfisher NPA recovery alone can finance wage hike
Highlights

The bank managements are arguing that the wage revision demanded by the employees is not affordable to them. But, the bank unions are strongly refuting this.

The bank managements are arguing that the wage revision demanded by the employees is not affordable to them. But, the bank unions are strongly refuting this.

In a memorandum submitted to the Union Finance Minister Arun Jaitley, the UFBU argued that the profitability of the public sector banks is on an increasing trend. They substantiate their point of view by stating that this is reflected in the rising profit per employee and the business per employee.

The number of bank branches increased from 49,573 to 67,930 during 2007-12. Similarly, the total business transacted by these banks increased from Rs 33 lakh crore to Rs 85 lakh crore during the same period.

On the other hand, the operating profits rose from Rs 42,655 crore to Rs. 1,16,335 crore. As a result, the business per employee also increased from Rs 7.55 crore to Rs 15 crore during the same period. Similarly profit per employee also increased from Rs 4.57 crore to Rs 8.42 crore.

Quoting these statistics, the bank employees are arguing that the managements are refusing to compensate them despite contributing to the vibrantly robust performance of the banking industry. While rejecting the demands of employees, the management is apportioning huge amount of profits towards provisions and write-offs of bad loans.

In fact, the wages of all the ten lakh bank employees can be hiked with the money lost in a single non-performing asset like Kingfisher Group, which is over an estimated Rs 7,000 crore.

The bank employees are demanding at least 23 per cent hike in their wages. The UFBU claims that the wages in other comparable sectors is much higher than their demand. For instance, the State Government employees in the united Andhra Pradesh got a hike of 39 per cent in the last wage revision. The employees of Coal India, another major public sector, recently received 25 per cent wage hike. The wage increase in many other public sector companies is also in the same range. Similarly, the previous Central government indicated to the Seventh Pay Commission that it would agree for 30 per cent salary hike for all Central Government employees.

The bank employees got a pay hike of over 17 per cent in the last revision. But, the Indian Bank Association (IBA) which is negotiating on behalf of managements is offering only 11 per cent hike while the bank unions have lowered demand to 23 per cent.

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