Chennai, Dec 8 (IANS): For the employees of public sector banks (PSBs), 2023 ends on a happy note as the Indian Banks' Association (IBA) on Thursday inked a 17 per cent annual wage hike agreement with bank unions.

The wage revision will be effective from 1.11.2022 for a period of five years.

The revision in wages will cost the banks a sum of Rs 12,449 crore for all the public sector banks including the State Bank of India (SBI), as per the agreement.

At their meeting, the IBA and the bank unions inked a Memorandum of Agreement for a 17 per cent increase in pay slip cost, additional loading of three per cent after the merger of dearness allowance, improvement in pension for all pensioners from 1986 including retirees under proposed 12th bipartite settlement.

“Annual increase in salary and allowances is agreed at 17 per cent, of the annual pay slip expenses for FY 2021-22, which works out to Rs 12,449 crores for all public sector banks including SBI,” the MoU notes.

“The new pay scales will be constructed after merging Dearness Allowance corresponding to 8088 points (average Index point as applicable for the Quarter of July, August and September, 2021) to the basic pay as on 31.10.2022, and adding thereon a loading of 3 per cent, amounting to Rs 1,795 crore," it added.

Five-day banking has also been recommended to the government for favourable consideration.

Under the earlier wage agreement, the bankers got a 15 per cent wage increase.

According to the agreement, the parties will meet "on mutually convenient dates to draw out a detailed Bipartite Settlement/Joint Note on the various issues on which consensus positions are reached. The parties will endeavour to finalize the Bipartite Settlement /Joint Note within a period of 180 days from the date of this minutes".