The performance-linked portion in the wage agreement signed with the Indian Banks’ Association (IBA) in November 2020 would provide a small windfall to employees of many public sector banks.
Canara Bank gave its workers a performance-linked bonus worth 15 days’ pay this week, shortly after reporting its financial results. This came after the bank recorded a net profit of Rs 2,557 crore for FY21, compared to a loss of Rs 5,838 crore the year before. Bank of Maharashtra, one of the first to announce its earnings, posted a net profit of Rs 165 crore for the fourth quarter, up 187 percent from the previous quarter. Employees at the Pune-based bank have also earned a performance-based bonus.
State Bank of India, the country’s largest employer with 2.5 lakh workers, is projected to report a profit increase as well. Sharekhan, a brokerage company, has projected an 82 percent increase in third-quarter earnings. Employees will receive a five-day pay bonus if their bank registered a rise in operating profit of between 5% and 10%, ten days if the increase is between 10% and 15%, and fifteen days if the increase is greater than 15%, according to the wage agreement. This benefit is available to all workers, regardless of rank or assignment.
Unions were adamant about not tying employees’ pay to the bank’s results. Their argument was that financial output is influenced by government policies on which they have little influence. Furthermore, the majority of the losses were due to massive corporate loans made at the highest levels. The IBA, on the other hand, had insisted on the provision in order to reward better-performing banks and instil a sense of competitiveness among public-sector bank employees.
Despite the pandemic, most public sector banks are expected to outperform the previous year’s performance. This is because, by the time they finished their FY20 results, the entire country had been put on lockdown, and several banks had made substantial provisions for the effect of Covid.
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Hello, my name is Anuj Boruah. I am quite interested in writing about current events in business, finance, and the economy. I work as a newswriter at Reviewminute.