Public Sector Banks are likely to be given the flexibility to pay their employees in accordance with their profitability and capacity to absorb higher wage costs, reported Business Standard, adding the proposal has been included in the 11th bipartite wage settlement talks between the Indian Banks' Association and the state-run banks.
"The capacity to pay is an important ingredient while deciding the amount of wage increase. A new formula has been proposed by which there will be a minimum increase in the wage up to a certain percentage; over that, it will be market-driven wage, based on a bank's profitability and paying capacity," a senior executive was quoted as saying in the report.
According to the report, the proposal featured in the discussions between bank unions and bank managements, that resumed on June 21 and the next round of talks will be held after the Union Budget.
The banking industry-level wage agreements follow one-size-fits-all practice since 1966.