9TH bipartite salary revision agreement signed

Historic 9th  bipartite salary revision agreement signed today ,effective date 01/11/2007.

Due to court cases filed in the Hon’ble High Court of Andhra Pradesh,there were certain difficulties which was on account of the sharing of the pension cost by the existing workforce .  The IBA after obtaining the legal opinion advised the convener of UFBU that the contribution towards Pension Fund out of the arrears can be recovered only from the PF Optees who wish to avail the 2^nd Option on Pension and not from those who are already become Pension Optees.  There was a hectic discussion amongst all the constituents of UFBU and after threadbare discussions, UFBU unanimously decided to accept the stand of IBA and proceed with the agreement.

Meeting of UFBU ledears with Finance Minister

We reproduce below circular issued by AIBOC regarding the meeting of  UFBU leaders with FM on 21/04/2010.

"Members are aware that the date of effect of Pension to CPF Optees was not resolved at IBA level, hence, UFBU requested for intervention of Hon’ble Minister of Finance, Govt. of India.  Accordingly, leaders of UFBU met Hon’ble Finance Minister on 21.04.2010 at New Delhi and forcefully presented the views of the UFBU on the effective date of Pension to CPF optees, from 1^st April 2008, as additional cost required for 2^nd Option on Pension was assessed by the common Actuaries based on the details made available as on 31.03.2008. 

2.       But the Hon’ble Finance Minister did not agree with the argument as IBA was of the view that, Pension has to be effective from the date of signing the final settlement on Pension. However, he suggested that, effective date may be from the date of signing the MoU i.e. 27^th November, 2009. 

3.       The UFBU will meet on 26^th April, 2010 at Mumbai, to take a final view of the issue connected with pension, new pension scheme, outsourcing etc.

4.       The IBA has called for a meeting with the UFBU on 27^th April, 2010, at Mumbai, with a view to sign the final settlement on Pension and Salary revision.  We shall advise the further developments later.

Source -  AIBOC Website

RBI hikes repo, reverse repo rates & CRR by 25 bps

MUMBAI: The Reserve Bank of India on Tuesday raised key interest rates by 25 basis points, as expected, tightening policy for the second month in aLive Credit Policy Analysis row as inflation heads towards double digits. The Reserve Bank of India also raised its cash reserve ratio (CRR) requirement for banks by 25 basis points, as expected, in a move to drain further liquidity from the financial system. The hike in CRR will suck out Rs 12,500 crore from the banking system. The CRR increase will come into effect from April 24. India last month became the second Group of 20 economy after Australia, to raise policy interest rates as the world economy recovers from it worst downturn in decades. The central bank surprised markets by raising rates by 25 basis points ahead of this month's scheduled quarterly policy review. Asia's third-largest economy is set to grow at 8.5 percent in the current financial year and 9 percent the following year, and inflation is spreading beyond food to fuel and manufactured goods such as cars. March annual inflation reached 9.9 percent, its highest in 17 months. The central bank lifted the reverse repo rate, at which it absorbs excess cash from the banking system, by 25 basis points to 3.75 percent. It increased the repo rate, at which it lends to banks, by 25 basis points to 5.25 percent. It raised the reserve requirement for banks by 25 basis points to 6.00 percent. "With the recovery now firmly in place, we need to move in a calibrated manner in the direction of normalising our policy instruments," RBI Gov. Duvvuri Subbarao said in the policy statement. Malaysia and China are among the developing nations that have begun to use monetary tools to cool their economies. India also raised policy rates unexpectedly on March 19 by 25 basis points as food price increases spilled over to manufacturing that could set off an inflationary spiral. Industrial output has risen more than 15% for three straight months, wholesale price inflation is at 9.9%, much above the central bank’s raised target of 8.5%, and loan demand is rising, indicating acceleration in economic growth. That has prompted many to forecast a 9% economic expansion this fiscal.

Five insurance policies everyone must have

Insurance is the best known form of financial protection to guard against major uncertainties or vagaries of nature.However, while it pays to be smart about insuring your family and your valuables, it is even wiser to make out which policies are truly worthwhile and which ones are redundant, particularly in such times when you can get insurance for everything, including liability, wedding and your pet. You, therefore, need to know that while each cover has its own benefits, not all of them are needed in normal circumstances. Thus, the insurance that’s worth it typically covers your life, your health, your earning power or the assets you’ve accumulated during your lifetime. Primarily the five main types of insurance everyone should take into account are:

1) Personal Accident Cover

Personal accident cover basically covers the risk of accidental death and permanent total disablement, and is a good choice to supplement a life insurance policy. The best part of it is that it is the cheapest cover for self protection and can be taken even by those whose income is low or cannot qualify for life insurance due to medical issues. Personal accident cover is also recommended in the early stages of life when one has just started his/her career.“Persons below the age of 40 have a bigger risk from death and disability due to an accident compared to any other risk. Disability for a young person can be a bigger tragedy than death. Personal accident insurance provides an extremely low cost option of covering this risk,” says Rahul Aggarwal, CEO, Optima Insurance Brokers.

2) Health Insurance

With healthcare becoming increasingly expensive the world over, health insurance has become a must today. If you are covered under health insurance provided by your employer, there is nothing like that as that usually comes free.If not, you should try to get a health cover for yourself as well as for the members of your family. If you can’t afford specialized health insurance, at least try to take a basic hospitalisation cover which will function as the security blanket for your family against treatment of any sudden illness or injury. Since basic covers cost less, you can save some money on their premiums.“The coverage, however, should take into consideration the health care costs in your city/town. Normally, a sum insured of Rs 2 or 3 lakh would be required. If the customer chooses to, he/she can take a higher cover also, depending on his/her needs.

3) Critical Illness Cover

By opting for this cover, you can insure yourself against the risk of serious illness in much the same way as you insure your car and your house. Under this cover, a guaranteed cash sum is paid if the unexpected happens and someone is diagnosed with a critical illness such as cancer, stroke and kidney failure.The benefit amount is payable once the disease is diagnosed meeting specific criteria and the insured survives 30 days after the diagnosis. This is, in fact, a very important cover for persons who have crossed 45 years of age.

“Although a health insurance policy covers hospitalization expenses, critical illness involves a lot of expenditure even when the person is not hospitalized. Expensive medicines and diagnostic tests, regular doctor visits, special diets etc. add up to a lot of money. A critical illness policy provides financial stability by providing upfront money to the insured for all the treatment.

4) Term Insurance

Once a person crosses 35 years of age, the risk of diseases and ailments starts increasing. The person also becomes more prone to lifestyle diseases.Now it is not uncommon to hear of persons who have died of a heart attack at the age of 30 or 35. Hence it becomes important to cover the risk of death due to reasons other than accident. Term insurance is a no-frills, low-cost option to secure financial security for the family, and therefore should preferably be there in everyone’s insurance portfolio.

“Every human being has a quantifiable economic value for his dependents. Any amount of loan that a person has taken gets added to this value. Protection of this economic value is very important, especially in India which does not have a strong social security net. A term insurance is the cheapest way to cover oneself for one’s Human Life Value (HLV).
5) Home Insurance

Your home is not just your most valuable asset, it’s your safe haven from the world outside. However, while your home cocoons you and your family, it’s your responsibility to see that nothing untoward happens to the building and its contents. Therefore, insuring your home is as essential as ensuring that it has strong foundations.A home insurance policy, also known as householders’ insurance, is the best bet to safeguard your house because “it not only covers the structure of your home but also all its valuable contents from different kinds of perils such as earthquake, fire, terrorism, flood, burglary and house-breaking,” .Also, weather has become very unpredictable and vicious in the last one decade. The unpredictability of weather, its extremes and increasing crimes in urban areas are reason enough to take this policy.

Source;- The Economic Times

UFBU Circular No.3 dated 13th April, 2010

Text of UFBU Circular No.3 dated 13th April, 2010.

Another round of bipartite talks was held between IBA and UFBU constituents at Mumbai today. IBA was represented by Mr. Ramakrishnan, Chief Executive, Mr. Unnikrishnan, Dy. Chief Executive and Mr. M. Venugopalan, Officer on Special Duty. From UFBU, representatives of all the 9 Unions were present.

In today’s meeting, issues relating to settlement on pension option were taken up. The draft Settlement was discussed in details and finalized.

Regarding retirees, the formula for contribution of Rs. 934 crores ( 30% gap ) of the deficit after refund of the PF amount (Bank’s contribution), it has been decided that the retirees will contribute as under:

Refund of PF amount (Bank’s contribution) actually received at the time of retirement (no interest is payable on this amount) - Rs. X

Plus: 56 % on this amount of Rs. X - Rs. Y

Less: Commutation amount Receivable from the Bank - Rs. Z

Net Amount refundable to the Bank ( X+Y - Z ) Rs ...

Regarding existing employees / officers, out of the net gap of Rs. 6000 crores, Banks would contribute 70 % i.e. Rs. 4200 crores. For the balance of Rs. 1800 crores ( 30%) employees / officers would contribute as under: ( This will be a onetime contribution and would be recovered from the arrears.)

For existing employees/officers - 1.6 times of “ Pay ” payable for the month of November, 2007.

For employees who have joined the banks after 1st November, 2007 their contribution would be proportionately reduced.

Date of effect of pension option: IBA reiterated their stand that pension option would be effective from the date of the Settlement while we have explained our viewpoint that it should be w.e.f. 1-4-2008. Difference on this issue persists. UFBU decided to take steps to find a solution to this issue.

Improvements under Pension Scheme: We took up with IBA various improvements in the Pension scheme like periodical updation of pension along with wage revision for serving employees, 100 % DA to be paid to all pensioners, common indexation of pension, increase in commutable portion of pension, increase in Ex Gratia for Pre-1986 retirees/widows, higher pension for pensioners above the age of 80, etc. After discussion it has been decided to submit a memorandum on these issues to the IBA and the Government and to be pursued further."

Source - AIBEA Website

Rupee to stay on firm footing as risk appetite improves

The focus in financial markets shifted back to the ongoing global economic recovery last week. In the recent past, sovereign risk concerns have dominated the market sentiment and weakened risk appetite. A slew of important economic figures, including the US employment report for March, hit the markets last week.

The data points were reassuring for the market as they indicated that the global economic activity was gaining traction led by the manufacturing sector. This was evident from the better readings of purchasing managers’ indices (PMI) for the manufacturing sector from across major economies. The US Institute for Supply Management’s manufacturing index rose to 59.6 in March from 56.5 in February—its highest level since July 2004.

Other such PMIs from across the globe also echoed the message of improving activity, with the market taking particular notice of China’s official PMI which rose to a higher-than-anticipated 55.1 in March.

In the currency markets, the US dollar was under pressure for much of the week. Heightened investor confidence regarding the prospects for global economic recovery dented the safe haven demand for the US currency. The greenback recovered some of its losses on Friday after the US jobs data prompted speculation that the US Federal Reserve may increase interest rates sooner than expected. Monthly non-farm payrolls data showed that 162,000 jobs were created in March, while upward revisions to

January and February data kept the unemployment rate at 9.7%.

The greenback made some healthy gains on Friday, but over the week it remained lower and fell 0.7% against the euro and dipped 0.4% against the Swiss franc.

The pound was the outperformer among major currencies after improving economic data dispelled some of the pessimism over the UK economy. Fourth-quarter 2009 GDP growth was revised higher on Tuesday, while the UK’s current account deficit also narrowed sharply. Meanwhile, the UK purchasing managers’ survey on Thursday indicated that activity in the manufacturing sector rose at its fastest for more than 15 years in March.

The sterling’s rise was given added impetus as opinion polls showed the UK opposition Conservative party had extended its lead ahead of the general election, expected to be held in May. This lessened fears of a hung Parliament, which many fear could leave an incoming UK government without the authority to tackle Britain’s record fiscal deficit.

Market positioning also favoured the pound, with figures from the Chicago Mercantile Exchange showing speculators had placed record bets against the pound in the week to March 23. Last week’s sterling rally was given a further lift as market participants unwound some of those short positions. Over the week, the pound rose 2.1% against the US dollar. Sterling also climbed 1.4% to a one-month high against the euro and gained 4.4% against the yen.

The Japanese unit was the underperformer, dropping 2.3% to a three-month low against the greenback and falling 3% to a two-month trough against the euro. The prospect of interest rates remaining at ultra-low levels in Japan while yields rose elsewhere was increasing the attractiveness of the yen as a funding unit in carry trades.Commodity-linked currencies were buoyed by an increasing risk appetite with the Australian dollar given an additional boost by hawkish rhetoric from the Reserve Bank of Australia (RBA).

Speculation that the RBA will raise rates heightened after governor Glenn Stevens warned it would not be wise to leave rates at “rock-bottom” for longer than necessary. The Australian dollar rose 1.6% against the US dollar over the week.

In the local market, the rupee remained strong against the US dollar and hovered around an 18-month high.

The Indian unit was helped by the weakness in the greenback overseas and continuing capital inflows, especially from the FIIs. Portfolio investors bought local stocks and bonds worth $1.2 billion last week. The rupee finished the week stronger by 0.8% and the rupee-dollar pair traded in the range of 44.88-45.53 over the week. The rupee also finished the last financial year stronger by over 11% against the US dollar.

The top event risk of last week (the non-farm payrolls report) has yet to fully play itself out with most markets shut on Friday. That being the case, the 162,000 increase in payrolls (only the second positive number in 27 months and the biggest in three years) would be interpreted as a boost to the relative growth and interest outlook for the US and thereby assist the dollar. This data is also likely to trigger a surge in risk appetite on Monday and push up riskier assets like equities and commodities and that would undermine the greenback, given its safe-haven status.

If indeed risk appetite regains its footing this week, it would extend the progress of last week’s risk appetite. With a general recovery in investor optimism, carry trades have started to revive.The US non-farm employment report and the round of manufacturing data have bolstered expectations of a solid recovery.There are still credible threats to the advance of risk appetite including Greece’s sovereign debt payments, the UK’s upcoming election, sovereign credit ratings and stimulus withdrawal.Should a swell in risk appetite be averted, the US dollar could actually make considerable headway on Monday.

In the local market, rupee is likely to remain on a firm footing. The market momentum is on the Indian unit’s side this week too. Over the week the rupee-dollar pair can trade in the range of 44.80 – 45.25. But a sharp rise in crude oil prices last week is likely to mute any gains for the rupee. Rupee’s prospects in this new fiscal depend on the capital inflows.

Rising commodity prices, especially crude oil and recovering non-oil imports are likely to lead to a higher merchandise trade deficit. That along with slowing services and other invisibles-related inflows, as was seen from the third quarter balance of payments data, is likely to increase the size of the current account deficit.

To fund that deficit, capital inflows are required. The strength of the rupee therefore critically depends on the size of net capital inflows. Sizeable inflows like those seen in 2007 and early 2008 can trigger sharp appreciation. Among the capital inflows, portfolio investments are the main source of inflows. Any slowdown in these flows creates pressure on the rupee.

Relatively even as strong growth fundamentals support the rupee’s appreciation, the pace and extent of appreciation may still be muted, as capital inflows may not be strong enough.

Souce :- DNA

RBI's base rate norms to ensure full benefit to old borrowers

Floating-rate home loan borrowers, who often felt they got a raw deal, will now have a reason to cheer. The Reserve Bank of India’s (RBI) new rules will ensure that they get the full benefit of any reduction in interest rates.In its final guidelines on the base rate — the new benchmark that banks will use to price loans — the regulator has made it clear that any change in the base rate will apply to new as well as old customers. Banks often offered lower rates and even teaser-rate schemes to attract new customers.

However, existing customers were left out of these schemes, even though they had taken loans at floating rates. As a result, floating-rate borrowers did not get the full benefit of falling rates. This is expected to change, with the new guidelines on base rate coming into effect from July 1.

The central bank has said: “Changes in the base rate shall be applicable in respect of all existing loans linked to the base rate, in a transparent and non-discriminatory manner.” It also said, “the actual lending rates charged may be transparent and consistent”.

The regulator had said that the base rate system was aimed at enhancing transparency in lending rates and would lead to a better assessment of monetary policy transmission. According to the RBI formula, the base rate factors in only cost and profit margin while risk and tenure premia will be charged over and above the base rate. However, RBI has given banks the freedom to use any other methodology, provided it is consistent and is made available for supervisory review or scrutiny when required.

The base rate will be the minimum interest rate, and banks will not be able to lend below it. The RBI has, however, made exceptions in cases of loans to employees, loans against deposits and differential rates of interest schemes. In such cases, the rates can be below the base rate. The central bank will separately announce export credit norms. Even a loan below Rs 2 lakh, on which RBI had so far stipulated that the benchmark prime lending rate, or BPLR, would be maximum rate that a bank could charge, will not be below the base rate.

“Now that banks can’t lend below the base rate, the commercial paper and non-convertible debenture market will grow. Second, our concern on short-term loans is addressed, given that the RBI has given banks freedom to have their own formula on base rate,” said JP Dua, CMD of Allahabad Bank.

Base rate will replace BPLR. Banks will be allowed to use the BPLR system till December 2010. However, during the six months (till December 2010), banks have been allowed to change the benchmark and the methodology till the system stabilises. Thereafter, they are required to review their base rates at least once in three months.

Source : The Economic times

'Poor asset quality may hit banks' profitability'

Quality of assets could pose a challenge for bank profitability in the coming quarters, with some borrowers continuing to default on loans even after they are restructured, said rating agency CARE. But the bad loan losses are likely to be compensated by a rise in interest margins as high-cost deposits shrink.
As a one-time measure in 2008, RBI had allowed banks to give troubled borrowers more time to repay without classifying them as defaulters. Borrowers were given more time by restructuring their loan which involved reducing their debt burden through an increase in the repayment period.
As per CARE’s analysis, the total quantum of restructured assets as on December 31, 2009, stood at around Rs 130,000 crore, amounting to around 4% of total advances. Of this, 70% were in the standard advances category. In its report, Care has warned “Given the huge quantum of restructured assets on their books, additional slippage could impact profitability of PSU banks.”
On bad loans, CARE has estimated the absolute level of gross non-performing assets at Rs 80,000 crore as on December 2009, up 30% over December 2008 levels. “The overall gross NPA ratio for PSU banks was influenced by increase in slippage (when a loan slips to sub-standard category) in Bank of India, Bank of Baroda and SBI.”
CARE Research has said it expects gross bad loans to reach around 2.8% for 2010-11. However, if 15% of the restructured assets slip into the bad loan category, gross bad loans may rise to 3.5%. Further, from September 2010, RBI has instructed banks to provide for 70% of the total bad loans on their books, popularly trend as provision coverage ratio (PCR).
According to CARE, this may eat into bank profits. “A higher NPA provision coverage may no doubt mean reduced profitability for those banks who are presently having a coverage far below the stipulated minimum, but it would at the same time, fortify banks against possible credit losses and thereby strengthen their balance sheet,” said the report.
According to CARE estimates, in the first nine months (till December 09) the PCR of all commercial banks stood at 52.8%, slightly lower than 55.5% a year ago. However, in the same period, the gross bad loan to total advances has risen to 2.42% from 2.18% a year ago.
Care expects that higher credit offtake may show a positive impact on net interest margins (NIM). The NIM of most banks improved on a quarter-on-quarter basis over the September 2008 quarter. Many banks had mobilised huge deposits during the quarter ending December 2008 at rates ranging from 9.5% to 11%.
“The impact of these high-cost deposits should wear off in the current quarter, post which the NIMs should show further improvements,” Care said. 

Source:- The Economic Times

Banks, RBI spar over base rate

 Source ETimes

MUMBAI: A simple promise to give a fair deal to small and retail borrowers has sparked differences

between the Reserve Bank of India and big lenders. The differences are holding back the final guidelines on ‘base rate’ — the new interest rate benchmark that banks will use to price loans.

The banking regulator is insisting that the final communiqué on base rate should state that “lending rates will be fair and non-discriminatory to all retail and small borrowers (mainly farmers)”. Bankers feel that the seemingly harmless sentence in the policy could cause endless feuds between lenders and borrowers.
“A borrower with a 15-year loan may move consumer court on the grounds that he/she is being charged a higher interest rate than someone who has taken a 10-year loan...such a clause would be misleading and could lead to unnecessary problems,” said a senior official of a private bank.
The RBI’s draft note on base rate says, “Apart from transparency, banks should ensure that interest rates charged to customers in the above arrangement (base rate system) are non-discriminatory in nature”. At a meeting with RBI deputy governors in March, bank CEOs urged the regulator to drop the sentence from the final circular. But the central bank is not willing to give in.
There have been several instances where banks have charged different interest rates on loans with the same tenor, said an RBI official. While giving loans to companies, banks charge different risk premiums depending on the borrower’s creditworthiness. Then there is a tenor premium—longer the loan, higher the charge. But for retail borrowers, it’s the loan tenor premium which is factored in. “The RBI wants to protect the interests of retail and small customers. As far as companies are concerned, they are well-placed to extract the best deal for themselves,” said the official.
The base rate—the final circular on which was supposed to be issued a fortnight ago—will be effective from July 1, and will replace the prime lending rate (PLR). While PLR takes into account the cost, profit margin and risk premium, the base rate factors in only cost and profit margin. Under the new arrangement the risk and tenor premia will be charged over the base rate.
The regulator also felt that banks were not pricing their loans accurately. When liquidity was high and there was pressures to meet loan targets, banks gave loans at rates way below their cost, without taking into account the risk premium. Often, this was done to maintain relationship with large borrowers.

The RBI is insistent on inserting the ‘fair and non-discriminatory clause’ to avoid a repetition of what happened in the recent interest rate cycle when several small and retail borrowers did not get the full benefit from the fall in interest rates. While most banks lowered interest rates for new customers, the reduction on old floating rate loans was marginal. Banks argued they could offer lower rates only to new loans since there was a drop in the incremental cost of funds. But RBI said that lower incremental cost brings down the average cost of funds, and the gains should have been passed on to old borrowers.

Sensex hits 18,000 after 2 years

PTI Wednesday, April 7, 2010 9:27 ISTLast updated: Wednesday, April 7, 2010 11:38 IST
The Bombay Stock Exchange benchmark Sensex today regained the 18,000-points level after almost 25 months on aggressive buying by funds expecting good fourth quarter results by corporates.

The Sensex, which was on an upward march in the last three trading sessions, moved up further by 67.03 points or 0.37% to 18,008.40 in opening trade, the highest since February 2008.
Similarly, the wide-based National Stock Exchange index Nifty rose by 19.80 points or 0.36% to 5,385.80.
Stock brokers said firming Asian markets also supported the uptrend on the domestic front.
The major gainers were Reliance Industries up 0.67% to Rs1,128.70, Reliance Infra up 0.69% to Rs1,093.55, ICICI Bank up 0.76% to Rs1,005.50, DLF Ltd
1.16% to Rs331.70, Tata Steel 0.89% to Rs691.60, Sterlite Industries 0.28% to Rs872.60 and ONG Corp 0.80% to Rs1,090.25.
Meanwhile, Japan's Nikkei was up 0.35% and Hong Kong's Hang Seng index gained over 1.2 % in morning trade today.

SBI mulls raising key rates in a few months

SBI mulls raising key rates in a few months

                Business Standard
                   07 April 2010
State Bank of India (SBI) announced today it might raise key interest rates in the next few months, even as it awaited a direction from the Reserve Bank of India’s (RBI’s) annual monetary policy announcement on April 20.
On the sidelines of a meeting here, SBI Chairman OP Bhatt said, “We will wait for the April policy and then decide (whether to increase lending and deposit rates). At the moment, there is enough liquidity in the system and the situation is likely to remain so for the next few months. The rise will not happen immediately. We have to wait for the RBI decision.”
Mr Bhatt said there was no immediate need for the bank to raise capital. “There is no urgency (to raise money). But, we might have to raise capital in the medium to long term. My preference will be a rights issue, as I would like to the government to retain its holding. We will see when the time is right for the market.” He added the bank was planning to raise Rs 10,000-20,000 crore

WAGE REVISION

AIBOC - FEED BACK ON 9TH BIPARTITE UNDERSTANDINGS

AIBOC has issued detailed circular clarifying various points regarding 9th BPS. The circular is reproduced below

FEED BACK ON 9TH BIPARTITE UNDERSTANDINGS

We are receiving a number of SMS and e-mails from our members on the understandings reached with the IBA on 3rd April 2010, as regards distribution of wage load of 17.5% among various components of salary and allowances. In this connection we would like to clarify that,

a) UFBU has agreed to accept 17.5% wage increase w.e.f 01.11.2007, as per MoU signed on 27th November, 2009. The issue cannot be reopened now.

b) The 6th Pay Commission recommendations for wage revision of Central Government employers are effective from 01.01.2006, for a term of 10 years. In case of Bank employees it is for a period of 5 years from 01.11.2007. The distribution of wage load for Central Government employees is not uniform. A meager increase of about 15-20% for lower level officials and higher increase at Secretary Level, with different pay bands is followed for them. Where as in our case we have tried to maintain equidistribution of load factor.

c) In case of Central Government employees, they will first arrive at the proposed revised scales and allowances and there is no restriction as regards cost of wage bill. The entire cost will be debited to the National Ex-chequer of the Government of India.

d) In the case of Bank employees, Government of India first fixes the limit for percentage increase and distribution of the increased load among various components of salary and allowances, is the responsibility of IBA and Unions/Associations.

e) Therefore, it is a herculean task to balance the demands of IBA and the Unions in drawing the revised scales of officers upto scale VII.

f During the current bipartite the demand of the IBA was to distribute higher load to Officers of SMGS IV and above, whereas we demanded equitable distribution of the load to all scales/grades, as higher load to senior grade officers and above will affect the scales of junior officers.

g) However, keeping in view the higher risk and responsibility of senior executives, we suggested to the IBA to get extra cost over and above 17.5% sanctioned from the Government of India to meet their demand. The IBA did not accept our suggestion and was bent upon loading higher increase in scales of senior executives. We are successful in minimising such higher load.

2. Our members will agree that, the issues being sensitive and the cost involved for higher loading at a senior level officer being barely few crores, breaking the negotiations on this point would have divided our membership. The frustration level at grass root level membership for early settlement is known to everyone. Therefore, Negotiating Committee after due deliberations, has agreed to come to an understanding with IBA on distribution of wage load of 17.5% in salary and allowances. There may be a few aberrations/anomalies as regards revised scales etc., which we will take up with the IBA during our further discussions. There is no hurry in coming to premature conclusions and resorting to vilification campaign to belittle the efforts of the Confederation which may divide the membership. Basic principle of Trade Union is “one for all, and all for one”. We hope our enlightened members will appreciate the genuine constraints faced by the leadership at negotiating table.

3. Comrades, we welcome your constructive feedback, but do not appreciate immature reactions, which affect the unity of the great organisation, AIBOC.

OUR UNITY ZINDABAD

With greetings,

(G.D.NADAF)

GENERAL SECRETARY

Source: AIBOC website

Disribution of Wage Load to officers upto scale VII , Final settlement on pension and salary revision by 15/04/2010

AIBOC has issued a circular giving a chart showing the present and revised scales from Scale I to VII and giving other additional details.

According to AIBOC, "It is proposed that next round of discussion on residual issues be held on 9th and 10th April 2010 to finalise the joint note for officers. The UFBU will hold a meeting with IBA on 12.04.2010 to finalize the draft settlement on pension related issues. We expect that by 15th April 2010, final settlement on pension and salary revision will take place."

Bipartite talks on 03.04.2010 - AIBOC version

According to AIBOC 9th BIPARTITE is on the verge of conclusion. Formal signing in 2nd Week of April 2010.

The important ingredients of the working out are as follows:-

SCALES

JMGS-I - Rs.14, 500/- TO Rs.31, 500/-@

MMGS-II - Rs.19, 400/- TO Rs.34, 200/-@

MMGS-III - Rs.25, 700/- TO Rs.35, 100/-@

@including two additional stagnation increments

SMGS-IV - Rs.30, 600/- TO Rs.36, 200/-

SMGS-V - Rs.36, 200/- TO Rs.40, 400/-

TEG-VI - Rs.42,000/- TO Rs.46,800/-

TEG-VII - Rs.46,800/- TO Rs.52,000/-

DEARNESS ALLOWANCE

For every 4 points rise/fall in index, Dearness Allowance at 0.15% per slab.

CITY COMPENSATARY ALLOWANCE

We have freezed the existing CCA and utilized the amount towards improvement in Basic Pay. Accordingly, CCA rates will be as under;

Places in Area I - 4% of Basic Pay, Max. Rs.540/- p.m.

Places with population of more than 5 lacs - 3% of Basic Pay,

Max. Rs.375/- p.m.

HOUSE RENT ALLOWANCE

We have retained the existing rate of HRA as under:

Major A class cities - 8.5%

Other places in Area I - 7.5%

Other places - 6.5%

MEDICAL AID –

For officers other than SBI, the medical aid has been enhanced as;

Scale I to III – Rs. 5100/- p.a.

Scale IV & above - Rs. 6320/- p.a.

STAGNATION INCREMENTS:

It is a fact that majority of senior officers in Scale I to III are stagnated as promotions are linked to vacancies. Hence, we have ensured to add two additional stagnation increments in these scales.

Date of Effect - 1st November 2007