21 April 2006 ~ 0 Comments

Bank babus sitting pretty

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Bank babus sitting pretty North Block had to finally give in to some of the wishes of the striking employee unions of State Bank of India. The week long ‘face off’ had not only subjected the unsuspecting customers to untold misery, but had put numerous critical financial transactions across the banking and the government sector in a limbo. Under the new agreement, the salary cut off point for pension calculations will be Rs 21,040, which the bank babus claim, had remained stuck at the Rs 8500 level (as per pay scale fixed in 1992) for a long time for no valid reasons. While retiring employees receiving a pay below the cut off will receive a pension equivalent to 50% of the cut off salary, those above the will receive an equivalent of 40%. The SBI babus of course are a happy lot today, as the minimum pension will now be Rs 10,520 instead of Rs 4,250. Given that the enhanced pension rate will be applicable even to the current lot of pensioners, the revision is going to prove a big financial drag on the premier bank’s balance sheet. Though no official figures are out as yet, initial estimates suggest that additional annual outflow on this count could be as high as Rs 180 cr. After getting the Government to come round to their demand for a substantial hike in their pension, the SBI babus may be wearing a rather mischievous ‘we knew it’ smile, but may well have set a rather troublesome precedent in the process. Now that the bank babus ‘Pension Pandora’ has been opened by the premier bank, we may be up for more action on this score elsewhere as well. Other PSU bank babus will surely be tempted to emulate their elite banking brethren, which could well mean that the relief on the faces (after the end of the strike) of the North Block babus may not be there for long.

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