2 hrs ago
Government Halts Public Bank Incentives Ahead of Nationwide Strike
The government has temporarily stopped a bonus plan for senior executives at public-sector banks.
The bonus was linked to how well the executives performed.
Bank unions said the plan was unfair because senior officers could receive much larger incentives than other bank employees.
The government made its decision after meeting employee representatives.
The bonus plan will now be discussed in broader negotiations about bank workers’ pay and working conditions.
Bank unions are also asking for a five-day banking week and solutions to pension-related issues.
They have called a nationwide strike for September 11 and more strikes later in September.
The government says it wants to solve the disagreements through talks.
The government has put on hold performance-linked incentive payments for public-sector bank executives for 2025-26.
The decision followed a meeting between Finance Minister Nirmala Sitharaman and public-sector bank employees led by the Bharatiya Mazdoor Sangh.
The incentive scheme will be discussed during ongoing bipartite settlement and joint-note negotiations on wages and service conditions.
Bank unions oppose the framework, saying it gives officers in Scale IV and above much greater individual incentives than junior officers and employees.
The United Forum of Bank Unions has called strikes on September 11 and September 28-30, and threatened an indefinite strike from October 26.
- Who
- The Department of Financial Services, public-sector bank employees and executives, and the United Forum of Bank Unions are involved; Finance Minister Nirmala Sitharaman met employee representatives.
- What
- Implementation of the performance-linked incentive scheme for 2025-26 has been placed on hold pending further discussions.
- Where
- The decision concerns public-sector banks in India; the letter was addressed to State Bank of India and nationalised banks.
- When
- The decision was communicated in a September 7 letter, ahead of a nationwide strike scheduled for September 11.
- Why
- Bank unions objected to the incentive structure and are also seeking a five-day banking week, pension-related changes, and other service improvements.
Government Position
Union Position
Performance-linked incentives
Government Position
The government has paused the scheme and says it will consider the matter during ongoing bipartite settlement and joint-note discussions.
Union Position
Bank unions want the framework withdrawn or revised, arguing that it disproportionately benefits officers in Scale IV and above.
Basis for calculating incentives
Government Position
The scheme permits higher incentives for senior officers based on individual performance, with a maximum of 365 days of basic pay.
Union Position
Unions say incentives should be based on the overall performance of each bank and follow a common structure for employees and officers through Scale VII.
Five-day banking week
Government Position
The government has not yet approved the proposed five-day banking week.
Union Position
Unions say the Indian Banks’ Association agreed to the arrangement in the March 2024 settlement and are demanding its implementation.
Key facts
- Scheme status
- Performance-linked incentives for 2025-26 are on hold until further orders.
- Affected officers
- The government letter specifically covers executives in Scale IV to VIII.
- Scheme date
- The incentive framework was issued on November 19, 2024.
- Maximum senior-officer incentive
- The government framework allows officers in Scale IV and above to receive up to 365 days of basic pay, based on individual performance.
- Maximum lower-level incentive
- Workmen and officers up to Scale III can receive up to 15 days of basic pay plus dearness allowance.
- Strike schedule
- The United Forum of Bank Unions has called action for September 11 and September 28-30, and threatened an indefinite strike from October 26.
- Other major demand
- Unions are seeking implementation of a five-day banking week, which they say was agreed with the Indian Banks’ Association in March 2024 but still awaits government approval.
Quotes
Finance ministry
India’s finance ministry, which announced the decision on the performance-linked incentive scheme
“On the representation received on the PLI structure, it was decided to keep in abeyance the implementation of the PLI Scheme dated 19.11.2024 for FY 2025–26 and take up the same during the ongoing Bipartite Settlement/Joint Note discussions.”
livemint.com
Rupam Roy
General secretary of the All India Bank Officers’ Confederation
“We are in receipt of a DFS letter and it seems the government has relented [to] the collective voice of bankers, and reportedly kept the proposed PLI for executive grades in abeyance, a significant outcome of our ongoing collective opposition by the Ufbu and the strike call. However, our key demand of five-day work week remains unresolved. The agreement was signed long ago and must now be implemented. The conciliation meeting tomorrow in the office of CLC (chief labour commissioner) is slated 12”
livemint.com
Sources
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