All profit can't be used to pay higher wages: FM to bank staff

Tags: Bank, Banking
As public sector bank employees started a two-day strike today seeking higher wages, Finance Minister P Chidambaram said the profit of banks cannot be used only to enhance salaries because there are other obligations.

"I will appeal to employees and officers of banks to recognise that banks profits, banks earnings have other claims. While claims of officers, staff and employees must be duly acknowledged, and a fair and just (wage) settlement is arrived at, there are other claimants to banks' profit," he said.

Chidambaram, speaking at the 78th foundation day of Indian Overseas Bank, said, "It cannot be that all profits are used to declare dividend and to provide enhanced wages and allowances to bank employees."

A significant part of retained earnings must be used to infuse additional capital, otherwise banks will not find the amount of capital that is required over the next 5, 10, 20 years, he said.

"The capital is to take care of a number of things. Firstly, banks are obliged to declare a dividend, both to the majority owner of the bank and the other shareholders," he said.

Another part of retained earnings has to be infused as capital in the bank for furthering its business, he added.

Public sector bank employees started a two-day strike today to press for a revision in wages.

There are 27 public sector banks in the country with a combined employee strength of about 8 lakh. There are about 50,000 branches of these banks across the country.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.
Image CAPTCHA
Copy the characters (respecting upper/lower case) from the image.

EDITORIAL OF THE DAY

  • India would have done well not to supress the 'Bofors interview'

    Bofors is one case that refuses to go away two-and-half decades after it grabbed public attention and became a byword for political corruption, claimi

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

Sarthak Raychaudhuri

vice-president, HR, Asia South Whirlpool of India

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

TODAY'S COLUMNS

Varun Dutt

Biogas Potential in India

Biogas is a form of renewable energy produced from organic ...

Zehra Naqvi

Dignity of labour is dignity of life

M Rafi Khan, a retired police IG, used to ...

Gautam Gupta

Retailers have it tough, thanks to e-commerce

For the past few months our focus has been on ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture