Tuesday, December 17, 2013

10TH BIPARTITE SETTLEMENT NEW PAY SCALE(60.5% DA MERGER,percent of increase in basic pay to be decided)

As promised on 12th August 2013, after announcement of major points, I am putting my views and analysis. UFBU and IBA had negotiation talks on 12th August 2013.    According to UFBU discussions were fruitful and satisfactory decisions on following important issues were arrived at :-

                  (a)    IBA has agreed that the Xth BPS will be applicable wef 1st November,         2012 i.e. the due date as per previous BPS;

                  (b)   That 4400 will be merged for the purpose of DA

 It is for the first time that since  Xth BPS has become due,  some serious discussions seems to have taken place and some firm commitments arrived at.  However,  it appears UFBU has once again failed to extract honourable commitment from IBA and bankers have already lost the initial battle.  Now chances of major hike have receded.

 By agreeing that Xth BPS will be made applicable from the due date, IBA has not done any favour but merely agreed to do what was due to bankers.   On the second issue, that is merger of CPI points, the agreement to merge 4440 only shows that UFBU has failed in its duty to protect the interests of its cadre.   Everybody will remember that in Sixth Pay Commission, the merger was done upto the due date of revision and under the new scales the new DA was 0%.     In the circular UFBU has claimed:

“IBA explained their constraints to consider merger of Dearness Allowance at higher index points. After prolonged discussions and on the insistence of the UFBU for merger of D.A at a higher level to enable construction of Pay Scales in a reasonable manner looking to the Pay Scales of employees and officers in comparable sectors, IBA agreed and conceded to merge Dearness Allowance upto 4440 Consumer Price Index i.e. 401 slabs and construct new pay scales accordingly”   (Click Here to View the Full contents of the UFBU circular).

UFBU has conveniently ignored to share with its cadre the constraints given by IBA.   I feel, it is wrong on the part of UFBU as to not share such constraints with cadre as it means they do not believe in  transparency.   If such constraints are genuine, then let these be made public.    Without going into further details, at present,  I leave it to our readers whether they need UFBU to be accountable to the cadre or to the management / IBA.
Thus, UFBU has lost a great opportunity to ensure that merger of CPI points should have been  upto October 2012 instead of October 2011.   It was during this period that there was steep increase in inflation and IBA has easily made fool of UFBU by ensuring that bankers do not get the benefit of merger for the period which has highest increase due to inflation.   By keeping Basic Pay at a lower level, IBA will be able to suppress the wage bill in the long run, and the losers will be bankers.

With my limited knowledge, I have tried to make certain calculations and the results I am placing for the benefit of our readers (In case of discrepancies in my calculations, please feel free to point errors through the comments, so that we  and all readers become aware of such corrections.)
After merger of the 4440 points the left over points and the slabs to the accounted for new Basic Pays for DA will be as follows:-
                                                     As on 1st November 2012  :  437 (Slabs 109)

                                                    As on 1st February, 2013 :     536 (Slabs 134)

                                                   As on 1st May, 2013         :      642 (Slabs 160)

                                                   As on 1st August, 2013     :     772 (Slabs 192)

   (Slabs are arrived at by dividing the left over points by 4)

   (When we convert  4400 points to existing DA %age, it comes to  approximately 60.15%)
Let me try to make the things simple for my readers, as my experience with Union leaders is that they never show transparency in calculations and 99% of the bankers fail to understand the nitty-gritty  of such calculations. 

It is not that bankers are not intelligent, but it is purely as these calculations are kept secret.  In my career of over 30 years, I have not come across even once the methodology adopted in calculations at the time of BPS.    Now with time available at my disposal, I have tried to figure out the details and are sharing these so that our readers are not befooled by Union leaders.   

I would request our readers to send me immediately whatever information or link they receive from any quarter relating to developments on wage revision (by an email )so that we can analysis the same and then place it before all the bankers in a transparent manner.   I hope readers will do me this service.   This will not give chance to UFBU leader to hide behind the curtain of secrecy.
In the Chart below I am giving some calculations (based on assuming Basic Pay of Rs10,000 as per existing pay scales)  so as to show that after merger of DA at 4440 points i.e. 60.15%,  there will be need to have a minimum factor of 0.10 for converting the remaining slabs, so as to maintain the status quo in the salary of bankers.
(This Chart is not New Scales but to show as to how factor for conversion of slabs is likely to be arrived at) - Links for Likely New Scales are given below


Charts for Likely Salary of Bank officers  Based on Merger of 60.15% DA and giving a 20% increase in Basic Pay and ensuring that the revised conversion factor is 0.12 for converting balance slab into DA percentage

Charts for Likely Salary of Workmen Based on Merger of 60.15% DA and giving a 20% increase in Basic Pay and ensuring that the revised conversion factor is 0.12 for converting balance slab into DA percentage

We are aware that under the existing BPS (i.e. IXth BPS),  the factor used to convert slabs into DA %age is 0.15.    This factor is reduced in every BPS as the existing DA is merged in the new Basic Pay.  Making backward calculations,  we have arrived to the conclusion that to maintain the same level of Basic Pay + DA, this factor has to be at least 0.10. 
 To make the calculations easy and appreciate the way calculations are done, for our readers, we have provided the above chart.  The values in column 4 and 8 are approximately same.   Thus, above will mean we will be maintaining status quo after merger at 4400 if new factor for conversion to DA is 0.10.  Thus, it will be the minimum threshold.   Thus, we can safely say that this factor will be at least 0.10 and any thing above will bring some relief / increase in pay for the bankers.  

 UFBU needs to insist that this factor should be at least 0.12 so that the existing losses on account of steep increase in inflation in last few years are properly compensated as CPI used by IBA does not  actually reflect the true inflation.   This will also ensure some reasonable compensation  in salary of the bankers.   I personally feel that in case UFBU is able to extract anything above 0.12 factor, it will be an achievement.
Although, different unions in Charter of demands have demanded very high percentage increase in salaries.  In case UFBU is able to extract increase of 20% or more  on the revised Basic Pay arrived based on above calculations (alongwith a minimum factor of 0.12 for conversion of slabs into DA %age, it will be an reasonable  settlement, although it will be certainly short of aspirations of the bankers.    To convert this reasonable settlement into honourable settlement,  there has to be appropriate hike in %age of HRA and other allowances.

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