SBI employees win battle on pension issue
Over 2 lakh employees of State Bank of India went on in an indefinite strike on April 3, 2006 on their long-standing demand of comprehensive review of the pension scheme. Led by All India State Bank of India Staff Federation (AISBISF) and All India State Bank Officers' Federation (AISBOF), the strike in this largest bank of the country was total in all the 9,000 branches. The strike badly hit the transactions, which are to the tune of 30 million per day despite RBI's intervention in clearing operations. This apart, ATMs which are in largest number with the SBI, were also badly affected as they ran out of cash.
Finally, the central government conceded to the demands of the employees and the successful strike came to an end after a week on 9 April. Congratulating the SBI employees on their victory the AICCTU general secretary Swapan Mukherjee said that it was the strength of the determined movement that forced a government to concede, which is otherwise withdrawing from all its social responsibilities and bringing in reforms in pension sector. He also castigated the government for its adamant attitude towards the justified demands of the employees, which created a lot of difficulties to the customers particularly the old-aged pensioners.
Main Demands and the Final Agreement
The main demands of striking SBI employees were – Pension at 50 per cent of the last drawn salary; commutation on par with industry; index-linked dearness allowance on pension on par with industry; and up-gradation of basic pension of all past retirees taking into account the current merger of index at 2,288 points.
Coming to the background of the strike, in the entire banking industry, SBI was the first institution to have a pension scheme for its staff in place for several decades but it had remained almost unchanged. Moreover, the family pension also remained un-revised for last 20 years. When compared with the other public sector banks, a major discrepancy seen in the pension scheme for SBI is that for the SBI staff there is a ceiling on pension income, fixed at Rs. 5,600 per month for calculation of monthly pension payable, whereas for the rest of the banking industry it is 50% of the last pay with no ceiling.
Under the pressure of the strike finally an agreement was reached upon between the management and the unions in the presence of top finance ministry officials. According to this agreement, the fresh “cut-off” of basic pay for determining pension has been increased to Rs. 21,040 from Rs. 8,500. All employees earning a basic pay of Rs. 21,040 would get pension at 50% of that amount, while those earning above that level would get 40% for the incremental amount above Rs. 21,040 “subject to a minimum of 50% of Rs. 21,040.”
The Finance Minister's comment after the conclusion of the agreement that “the financial implications are within the financial capacity of SBI” amply shows that it was the government which held the bank, its employees and the public to ransom for one full week.
On the other hand, the employees of other PSU banks are demanding for long for one more option for pension and up-gradation of pension. Since 1990s, when pension scheme for the staff of the other PSU banks was introduced, there was a provision for an option of choosing either pension foregoing employer's contribution to PF or vice-versa.
Actually, in view of falling interest rates on PF more and more bank employees are now shifting to the option of pension in place of employers' contribution to the PF in these banks.
So, another confrontation with the government in the near future is in offing.