10 BIPARTITE SETTLEMENT SIGNED TH - AIABOF

1 1 Circular Date: 30-05-2015 TO ALL OFFICERS ---------------------------------------- ---------------------------------------- ---------------------------------- Dear Comrades, 10TH BIPARTITE SETTLEMENT SIGNED Further to our circular on the finalization of the cost distribution sheet, we are glad to inform you all that the 10th BIPARTITE SETTLEMENT has been SIGNED on 25th May after a marathon run of 18 rounds of negotiations spreading over a period of 31 months. The SETTLEMENT we should all understand has been reached in the midst of several disturbing developments in the public sector banks that are facing lot of challenges upfront and the Govt.

2 Of India trying to push forward it s agenda of reforms in the Banking sector for which a road map has been laid down by Committee. The focus of UFBU now needs to be shifted to such issues which are likely to challenge the very existence of certain banks in the name of consolidation and strengthening of public sector banks even while making efforts to implement the terms of SETTLEMENT at the earliest and as well as to pursue the unfulfilled tasks like the Pension updating and the issue of regulated working hours etc., that has evoked no positive response from the Central Government, thus far.

3 The SETTLEMENT we believe has been reasonably fair in the circumstances even though it has been a disappointment for the retirees prior to November, 2012 as the issue of updation of pension could not be achieved even if the issue was kept open by way of a Joint Record note of discussions wherein the respective stand of the UFBU and the IBA on the issue are recorded. The issue of employee salary, welfare and the retirement benefits like PF and pension etc., is the sole responsibility of the Management and the bank is supposed to arrive at the net profit only after making all the provisions relating to the staff emoluments.

4 In fact, in terms of Section 10 (7) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the dividends can be announced only after meeting all the provisions/ obligations to the staff which includes the funds for superannuation benefits, thus the linkage to profitability cannot be a valid reason. In fact, in terms of the memorandum of SETTLEMENT on Pension dated 29th October, 1993 between IBA and officers/workmen organizations in the note to the SETTLEMENT under point 12, it was clearly mentioned that provisions will be made by scheme, to be negotiated and settled between the parties to this SETTLEMENT by 31st December, 1993 for applicability, qualifying service, amount of pension, payment of pension, commutation of pension, family pension, updating and other general conditions etc.

5 , on the lines as are in force in RBI . But unfortunately, in the subsequent pension scheme guidelines 1995, the above aspect was not included and the issue is still elusive, whereas the same was implemented in all the public sector and also for all the Central/State Government employees. Thus, we believe that for the persons who have retired prior to November, 2012, the solution will come only through the pension updation. Another issue remains to be resolved is the issue of 100 % DA neutralization for pre 2002 retirees. 2 The adamant stand of the IBA on the issue in terms of the Joint Record Note of BIPARTITE discussions, on the plank of financial burden is strange and unacceptable and it s a real challenge for the UFBU.

6 I am sure that AIBOC will come with appropriate strategy soon and the issue will be on top of the agenda in the forthcoming Executive Committee meeting of AIBOC scheduled to be held on 8th June, 2015 at Hyderabad. We also understand that the senior officers who are in the Zone of currency of the present SETTLEMENT , November, 2012 to October, 2017 are feeling agitated due to lack of improvement in pension amount and the prospect of reduction in the net pension payable post commutation! Even while appreciating their observations and concern it is to be noted that the above was primarily because of the following aspects that are being furnished not as justification but as a part of analysis and explanation.

7 The unprecedented growth in quantum of basic pension which has almost grown @ 63% (merger + load) resulting in much higher commutation portion and value and basic pension. (An increase of of commutation of basic pension will result in a additional value @ ,772/- as per the applicable annuity on superannuation at 61 the age reckoned for the purpose. (The calculation being - ) The successive merger of index points from the 6th BIPARTITE to 9th has been 548/536/ 604/548 respectively whereas the same was a whopping 1604 points in the 10th!)

8 The merger point was increased by 1604 points between the 9th and 10th SETTLEMENT alone where as a total of 2236 points were increased from 6th to 9th settlements! The shift to the concept of wage slip cost vis- -vis the traditional concept of establishment expenses for deciding the load in the present SETTLEMENT shall also imply that the incremental cost of pension which includes the cost of commutation was to be borne by the Banks only and the same was thus not included in the accepted load factor of 15 % which in turn may have restricted the scope for much loading in the basic pay having further cost implications on the retirement benefits!

9 (In the 9th SETTLEMENT the load factor was @ on establishment cost which include the superannuation costs). It is under the above circumstances to fill the cost gap in the distribution chart to load the 15% the concept of special allowance which will rank for DA has been negotiated! The additional stagnation increment with a reduced time frame of 2 years in Scale II, III and IV also could not help much since the same is given effect from and thus the people who have retired upto April 2015 could not reap any benefit! Other Highlights of the SETTLEMENT : The issue of holiday on 2nd and 4th Saturday is the real land mark achievement of the present SETTLEMENT and is being appreciated by all sections of the employees.

10 The improvements in the Leave rules like increase in PL accrual to 270 days, reduction in notice period for PL to 15 days, introduction of paternity leave and improvements in maternity leave etc., are appreciable. Increase in FPP & PQP along with Basic Pay @ 63% which has a direct bearing on the superannuation benefits. Improved Hospitalization Scheme with much higher limits which of course may need some more fine tuning and the extension of the same to retirees @ Master Policy rate. Increase in Halting allowance, Deputation allowance, CCA, Project Area allowance and Medical Aid etc.