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E-mail ID will not be published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.

EDITORIAL OF THE DAY

  • Lower listings rate is proof that the Indian market is maturing

    The bullishness on Dalal Street notwithstanding, the pace at which new companies are being listed on Indian stock exchanges is declining.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Building great cities (and nations)

Fifteen to twenty years’ span is the time when humans ...

Rajgopal Nidamboor

The essence of amplified action

It is something that ‘separates’ us from other living creatures. ...

Shona Adhikari

All roads lead to Delhi, as it gears up for art fair

With the seventh edition of India Art Fair (IAF) coming ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture