Taking cue from Federal Bank more banks mull new wage structure

Kochi: Close on the heels of the Federal Bank move to introduce cost to company (CTC) remuneration structure in the bank for its senior grade staff, another old generation bank in the private sector, South Indian Bank (SIB), has also announced direct recruitment for three senior grades including chief managers and assistant general managers (AGM).

The SIB notification has highlighted that the successful AGM candidates who are appointed on contract will be paid on CTC norms. Though CTC remuneration system is not in vogue in old generation and public sector banks, industry sources aver that the banks like Federal Bank and South Indian Bank (SIB) are testing the waters with appointments in selected senior categories.

Only recently Catholic Syrian Bank (CSB) issued show cause notice to 80 officer trainees on completion of their two-year probation asking them to explain why they should not be dismissed from service or the probation period not extended (in some cases), citing failure to achieve their targets.

Though most old generation banks have gone for CTC route in very senior appointments in key positions, the trend setter move came from Federal Bank some time back.

The Federal Bank had brought its more than 750 Class 4-and- above officers under the CTC wage structure a few months back raising  the spectre of a new work culture in Kerala’s banking industry, which employs thousands.

Federal Bank, the largest and arguably the most professionally run private sector bank in the state, brought in the new wage system from June 2017 onwards when the 10th bipartite settlement with Indian Banks Association (IBA) was still on and would expire on October 31, 2017.

Though some union leaders argue that these officers were inducted to the new system under duress, businessbenchmark.news (BBN) was not able confirm this from these officers yet.

Responding to a query on the new development at an analysts’ meeting recently, the chief executive officer (CEO) of Federal Bank, Shyam Srinivasan, acknowledged that the new wage structure or ‘the grander pay’ had been applied for 700 employees in his bank.

“The rest all are on IBA terms. While we are working on many other variations of it, these are driven or influenced by IBA,” he further said.

There were unconfirmed reports that Federal Bank had started testing the new wage structure with other officers too (below class 4) outside Kerala, by giving options to join the new wage system.

“Many employees are likely to ‘rise to the bait’ since the wage difference is huge – hikes up to 30 to 50 per cent, but one should not lose sight of the snake in the grass,” said a former employee.

Leave a Reply

Your email address will not be published. Required fields are marked *