Public sector banks are planning to raise the salaries of their employees who have striked several times to press on their demands of salary revisions and improvement of pension scheme.

The PSU banks comprise of 80% share of the market and this move is likely to benefit an estimated staff of around 7,00,000 employees. Top level managing directors and executive directors are excluded from this benefit as they are already enjoying by the approval of sixth pay commission.

Indian Banks' Association (IBA) and trade unions are in the decision making process on the wage revision and there are news that unions are demanding a hike of 20% on their wages.

A leading banker says, "These are preliminary rounds and though the increase may not be as high as what has been demanded, banks will be under pressure to give bigger hikes to its employees, especially in the wake of healthy profits, higher employee productivity and high attrition."

An annual bill between Rs. 1,500 and Rs. 2,000 crore has been suggested for the banks from the planned increase in wages. A union leader says, "That should not be a cause for concern as all public sector banks have shown a healthy growth and increase in profits. Pay scales therefore must be improved."

PSU banks employees face pressure due the retirement of nearly 5-10% employees every year and quitting of jobs by employees because of better salary options in private sector. Therefore these banks are forced to raise the compensation of their employees in order to escape the odd situations.

The hike comes at a time when the private employers are decreasing their employees in order to cut down the cost of funds.