IBA Says Banks Incapable To Bear Extra Pension Burden

Mumbai: Indian commercial banks have evinced inability to bear immense burden of over Rs 26,000 crore emerging from bank unions demand to give another chance for pension option to employees who did not opt for it in 1995. Pension cannot be offered in its present format, as the burden will be enormous. United Forum of Bank Unions has given a call for one-day strike on September 12 in support of demand for pension, compassionate named opping outsourcing of banking activities. The bone of contention between the Indian Banks Association and various unions is mobilisation of additional funds needed to cover nearly 2.8 lakh employees of 19 nationalised banks and the seven associates of State Bank of India (SBI) who did not opt for the scheme earlier in 1995.

IBA had placed the additional requirement at Rs 26,000 crore, while unions have estimated that an additional provision of only Rs 4,700 crore would have to be made. Public sector banks (PSBs) have urged the Centre to intervene as negotiations with bank unions for allowing half of their employees a second chance to opt for pension instead of provident fund have reached a deadlock. The Reserve Bank of India has told banks that they cannot outsource core functions such as sanctioning loans, management of investment portfolio and opening deposit accounts.

Source : www.indian-commodity.com