Financial Daily from THE HINDU group of publications
Thursday, Jun 20, 2002
Public Sector Banks
Money & Banking - Public Sector Banks
Indian Bank allowed to unfreeze arrear payments
Sarbajeet K. Sen
NEW DELHI, June 19
AFTER the turnaround, it is now time for rewards for the 22,000-odd staff of Indian Bank with the Government clearing the proposal put forward by the bank's management for unfreezing the payment of arrears.
The Ministry of Finance has given a go-ahead to the bank's proposal to pay a further instalment of 40 per cent of the total arrears payable to the employees as per the Seventh Bipartite Wage Settlement. According to sources, this instalment would amount to roughly a payout of Rs 23 crore for the bank.
Officials of the Ministry of Finance told Business Line that the green signal from the Government for payment of arrears has been given in view of the bank being able to show net profits for year 2001-02. Indian Bank has shown a net profit of Rs 33 crore for 2001-02 against a net loss of Rs 274 crore in the previous year.
Incidentally, this is the first time after several years that Indian Bank, which had been in the worst financial condition among the several erstwhile `weak' banks, has been able to come out of the red.
With the payment of the 40 per cent of the dues, the bank will be settling a total of 60 per cent of the arrears. The bank had made the payment of the first instalment of arrears of 20 per cent during December 2001. However, subsequently further payments were frozen by the bank through an agreement signed with the Unions in March this year whereby the employees' representatives had agreed that the remaining arrears would be dependent on the bank showing improved performance.
In the memorandum of understanding (MoU) signed with the management to facilitate the turnaround of the bank, the unions had agreed that "the management would reserve the right to decide upon the amount and time of the release of arrears depending upon the achievement of the target under the Restructuring Plan for revival of the bank."
The agreement had mentioned that discussion for payment of the remaining arrears would be taken up for discussion between the management and unions soon after the finalisation of results for March 31, 2000. Having obtained the approval of the Government, the management has now called for meeting with the bank unions on June 22. Confirming the development, the Secretary General, Federation of Indian Banks' Employees Union, Mr E. Arunachalam, said that it had received a communication from the management in this regard.
Mr Arunachalam said that payment of the full arrears, including the 40 per cent that would remain after the payment of the second instalment, was expected to be made by the management by the time the Seventh Bipartite Settlement ends on October 31, 2002.
Send this article to Friends by E-Mail
Stories in this Section
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |
Copyright © 2002, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line