UFBU and IBA meeting on 29 09 2018 – A Detailed Analysis

UFBU and IBA meeting on 29 09 2018 –  A   Detailed Analysis

 

Please the read post completely its little bit lengthy.

But with the available data as on date some trends have emerged and its hard to notice the same by common banker

With Regard to DA:

The first amongst them is “ As per the indications by merging DA as on 01.11.2016, the present basic will be constructed and them loading will be applied”.

The DA as on 01.11.2016 quarter is at 47.8%, even though our mighty UFBU didn’t comment on this it is confirmed that the DA will be merged at 6353 points.

Why this date of 01.11.2016 ?  11th Bipartite Settlement is due from 01.11.2017. It is just a tradition for the past 3 Bipartite settlements and IBA has just followed the same.  Sincere request to UFBU leaders don’t accept, stick for DA merger as at 01.11.2017.

        Month Average CPI DA Slabs DA%
Nov 17, Dec 17, Jan 18 6353 478 47.8
Feb 18, Mar 18, Apr18 6315 469 46.9%
May 18, Jun 18, Jul 18 6261 456 45.6%
Aug  18, Sep 18, Oct 18 6353 478 47.8%
Nov 18, Dec 18, Jan 18 6505 516 51.6%

 

If our leaders are wise they will stick to DA merger as at 01.11.2017 which will increase our basic by 3.8%.  Remember for tenth bipartite the load factor is just 2% on basic.

Basic DA Load factor New Basic
23700 47.8% X% 35028+(x% of 35028)
23700 51.6% X% 35929+(x% of 35929)

 

For easy understanding special pay of 7.75% was excluded from the above table. Any how the difference will be around Rs. 1500/- to Rs.2000/- if merger of Da is based on index as at 01.11.2017.

 

With Regard to Variable Pay:

Performance linked compensation is over and above the increment agreed in Eleventh Bipartite settlement.  It is just like our special pay, but not permanent.  It is dynamic and dependent on the profitability ratios of our individual banks.

So keep a watch on those ratios, how ever as per IBA version as on date only 6 banks are eligible and amongst them Vijaya Bank is merged so leaving only 5 banks eligible for the proposed performance linked compensation.

No doubt our leaders should straight away reject the offer and they have done the same.

Now to make the offer acceptable, IBA may relax the profitability parameters for the first one or two years and make eligible all the banks for payment of variable pay.  Or else IBA may offer a substantial wage hike  of say 25% and implement the variable pay.

Any thing can happen.

Please note that with the introduction of special pay seniors have lost heavily as their pension and superannuation benefits are linked to the basic pay.  Special pay is not considered for superannuation benefits  and also for NPA contribution the same is not taken into account.

All the young officers are losing 10% of their special pay every month.

Lets see what will be the starting basic of officer is the settlement is signed for 25% or 30%

  I  (25%) II  (30%)
Basic 23700 23700
DA merger ( 51.6%) 12229.20 12229.20
Merger of Special Pay (7.75% with DA)   2784.5   2784.5
Total 38713.7 38713.7
Load on the above    6581.32   7742.74
New Basic for 11th Bipartite R 45295 46456

 

We have received the UFBU circular and the following are the important points

IBA detailed proposal

  % Increase in YoY in operating profit Return On Assets – ROA
Category  C 0.01% to  7%  – 0.75 to – 0.25
Category B 7.1% to 15%  – 0.24 to 0
Category A Above 15%    Above 0

 

 

 

No of Days for which Establishment cost shall be paid out
  Return on Assets
  Category A B C
Operating Profit

YoY Growth

A 30 25 15
B 25 20 10
C 10 10 5

 

 

 

 

 

No of Days for which Establishment cost shall be paid out
  Return on Assets
  Category A B C
Operating Profit

YoY Growth

A 8.2% 6.8% 4.1%
B 6.8% 5.5% 2.7%
C 4.1% 2.7% 1.4%

 

 

 

YoY Growth In Operating  Profit Return on Assets

 

Category No of Days for which Establishment cost shall be paid out Payout as  % of Establishment Cost
Above 15% Above 0 AA 30 days 8.2%
Above 15% – 0.24 to 0 AB 25 days 6.8%
Above 15% 0.75 to – 0.25 AC 15 days 4.1%
7.1% to 15% Above 0 BA 25 days 6.8%
7.1% to 15% – 0.24 to 0 BB 20 days 5.5%
7.1% to 15% 0.75 to – 0.25 BC 10 days 2.7%
0.01% to 7% Above 0 CA 15 days 4.1%
0.01% to 7% – 0.24 to 0 CB 10 days 2.7%
0.01% to 7% 0.75 to – 0.25 CC 5 days 1.4%

 

Now its crystal clear IBA has proposed to pay 6% + 8.2% to 1.4% for some banks where as it will be only 6% for remaining all other banks.

As per the data available Indian Bank will get 6% + 8.2%

And Bank of Baroda, SBI, Canara Bank, Bank of Maharashtra  will get some thing from 2.7% to 1.4% over and above 6%

The above proposal is ridiculous and should have been out rightly rejected on the board itself.

UFBU has still postponed it to 14 10 2019.  They should have gone for a lightning strike immediately.

UFBU is meeting on 14.10.2018 to discuss the above proposal and take further course of action.

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