IBA sources said that the various bank employees' and officers' unions have asked for a mutual arbitration on the cost issue of pension funds. "Both parties should agree to represent the matter to an external arbitrator. The IBA negotiation committee has, however, declined this offer and has decided to stick to the terms agreed in the MoU signed by the IBA and the trade unions on March 11, which envisages a wage hike of 12.25 per cent for the bank employees over the March 31, 1997, salary figures," IBA secretary MN Dandekar said.

Dandekar said that the 12.25 per cent wage hike incorporates the increased pension costs on account of wageincrease. "The IBA maintains that both sides agreed at a 12.25 per cent hike inclusive of cost of superannuation benefits and all aspects of wages/allowances and additional costs by way of higher gratuity, PF contribution and pension," he added.

Earlier, IBA chairman AT Pannir Selvam said: "The IBA's member banks are not willing for any further concessions and may pull out en masse from the negotiations in case we digress from the MoU signed by the IBA and the trade unions on March 11.

With their bottomlines under tremendous pressure on account of low credit offtake, lacklustre economy and increasing competition, the banks are not in a position to offer any further increase in the already huge wage bill of around Rs 1,460 crore per annum." The main grudge of various employees' unions revolves around the IBA's attempt to `stone-wall' the entire process of settlement by refusing to negotiate the issue of distribution of load and charging 26.5 per cent basic pay for the pension scheme which is in lieu ofthe PF, as against the 10 per cent PF employees were contributing earlier.Senior IBA sources said that among the nine unions (AIBEA, NCBE, BEFI, INBEF, NOBW, AIBOC, AIBOA, INBC and NOBO), two unions -- the Bank Employee Federation of India (BEFI) and the National Organisation of Bank Workers (NOBW) -- have not agreed with the suggestion of other unions for an external arbitration and prefer bipartite negotiations, a stand welcomed by the bankers' association.

IBA maintains that both sides agreed at a 12.25 per cent hike inclusive of cost of superannuation benefits and all aspects of wages/allowances and additional costs by way of higher gratuity, PF contribution and pension.The chairman of Union Bank of India (UBI), Allahabad Bank, Oriental Bank of Commerce, Karur Vyasa Bank and Catholic Syrian Bank negotiated on the behest of the bankers' body. This negotiations was a significant climb-down in IBA's earlier stance--no further negotiations are envisaged and IBA is hopeful that the unions will agree withthe terms of the memorandum of understanding (MoU).