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Wednesday, April 17, 2013

Govt. Banks may adopt Cost-to-Company Salary Structure in next pay settlement

Govt banks may switch from gross salary to CTC for pay hike: Business Standard

Concessional rates of interest on loans, employer's share in provident fund may become part of CTC

As employees of state-owned banks bargain hard for a steep hike in wages, the finance ministry has asked Indian Banks' Association (IBA) to consider moving towards a cost-to-company (CTC) structure in the next pay settlement to reflect their actual remuneration including all perks and incentives.

If public sector banks have to run like a professional company then why not behave like one and move to CTC concept. We have given this suggestion to IBA,” a finance ministry official told Business Standard.

If the proposal goes through, every penny the bank spends on the employees, from concessional rates of interest on loans to the employer’s share in the provident fund, may become part of CTC.


At present, the hike to bank employees is given on gross salary, which primarily includes basic salary, dearness allowance (DA), city compensatory allowance and house rent allowance in some cases.  Besides, there are various allowances for travel, buying furniture, cleaning material, telephone, newspaper, leased house rent (if HRA now availed of) and medical expenses among others.

Typically, a government bank probationary officer gets a salary of about Rs 26,000 per month. The perks and facilities may add anything over Rs 10,000 to the salary. There is no upper limit on it as these perquisites are not fixed by the government. While these vary from bank to bank, the government believes in many cases the total cost incurred by the bank on an employee is double of his basic salary.

A bank employee, however, said there is a significant difference in the perks of small and large-size bank employees and if the wage hike is given over CTC it would further widen the gap in their pay packages. Salaries of State Bank of India employees are already higher than other public sector bank peers.

Some banks also offer allowance for mid-year transfer, deputation, posting in a hilly region or special area, halting, lodging, discomfort, briefcase, entertainment and club membership fees.

IBA is likely to ask for about 25% hike for over 8,00,000 bank employees in the 10th bipartite agreement on wage revision. The hike is due from November, 2012. Though wage settlement negotiations usually go on for about two years as bank unions begin with exorbitantly high expectations, this time the government may settle it by the end of 2013 in the view of general elections in 2014.

Additional burden on banks due to the ninth wage agreement carried out in 2009 was Rs 4,816 crore for a 17.5% wage hike and Rs 5,000 crore for pension. The hike was effective from November 2007.

Report of a committee on HR issues of public sector banks in June 2010 had suggested banks should consider variable pay as a major component of wages and should have the discretion to go in for CTC concept which is a prevalent trend world over.

A report by the Reserve Bank of India had said that after the ninth pay revision the cost per employee in state-run banks went up to Rs 7.16 lakh in 2010-11, against Rs 5.63 lakh in private banks. In the previous years it was either similar or more in private banks.

Read more at: http://www.business-standard.com


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SEVENTH PAY COMMISSION REPORT
1. Foreword View
2. The Macroeconomic Situation
2.1 General Economic Situation and Financial Resources of the Central Government
2.2 Financial Resources of the State Governments
3. Analysis of Central Government Personnel View
4. Approach to Pay
4.1 Principles of Pay Determination View
4.2 Determination of Minimum Pay View
5. Revised Pay Structure
5.1 Pay Structure (Civilian Employees) View
5.2 Pay Structure (Defence Forces Personnel) View
6. Pay Related Issues of Defence Forces Personnel
6.1 Background and Approach to Pay Related Issues of Defence Personnel
6.2 Cadres of Defence Forces Personnel
7. Pay Scales for Specific Services, Categories & Cadres
7.1 Headquarters Organisations in Government of India and Office Staff in Field Offices View
7.2 All India Services
7.3 Central Services Group A
7.4 Engineering Services
7.5 Scientific Services
7.6 Medical and Paramedical Services
7.7 Common Categories
8. Allowances View
8.1 List of Allowances (Summary) View
8.2 Overview of Allowances View
8.3 Allowances Payable for Additional/ Extra Duty View
8.4 Allowances related to Knowledge Updates View
8.5 Allowances related to Deputation View
8.6 Allowances related to Working on Holidays View
8.7 Allowances related to Housing View
8.8 Allowances related to Good Service View
8.9 Qualification Allowances View
8.10 Allowances related to Risk and Hardship View
8.11 Allowances for Running Staff of Indian Railways View
8.12 Allowances related to Sports View
8.13 Sumptuary Allowances View
8.14 Allowances related to Training View
8.15 Allowances related to Travel View
8.16 Allowances related to Uniform View
8.17 Other Allowances View
9. Other Facilities
9.1 Advances View
9.2 Holidays and Leave View
9.3 CGEGIS View
9.4 GPF View
9.5 Medical Facilities for Serving Employees and Pensioners View
9.6 Persons with Disabilities View
10. Pension and Related Benefits
10.1 Pension and Related Benefits of Civilian Employees View
10.2 Pension and Related Benefits of Defence Forces Personnel View
10.3 National Pension System (NPS) View
11. Issues Specific to Ministries and Departments
12. Officers and Employees of the Supreme Court of India
13. Regulatory Bodies
14. Training
15. Bonus Schemes and Performance Related Pay View
16. Financial Implications View
17. Executive Summary View
18. Meetings held by the Commission
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