DA merger in Banks-impact

29 Aug

Process of  merger of DA @ 4440 points as on 1-11-2011 – its impact on pay scales in Banks and RBI
As per the UFBU circular the IBA has agreed to merge the DA @4440 index numbers( 1960=100)in the basic pay. To understand the merger process let us keep  in mind;

In last settlement DA was merged at  2836 ACPIN (1960=100).

  1. As on 01.11.2011 AICPIN was 4440.
  2. Date of merger  is  1-11-2012 (now agreed).So the new merger will be at  4440-2836=1604 points or 1604/4 = 401 slabs.
  3. From 1-11-2007- the existing  rate at which da  is being paid per slab is 0.15%. The  merger will be @60.15% of basic pay (@0.15% per slab *401 slabs)
  4. ACPIN  on 1-11-2012  is 4876
  5. After the merger of 4440 points in Basic pay as on 1-11-2012 , 4876-4440 = 436 points or 436/4 = 109 slabs remain .The earlier rate for 109 slabs was @ 0.15%.

In order to balance the merger of Da in Basic pay, the rate  for 109 slabs ( existing  0.15% )will be scaled down  by the same ratio by which the Basic pay  has been scaled up .
And the ratio is  (2836/4440) = 0.6387

The rate of 0.15%,therefore, converts to 0.10%.
(  0.15% *0.6387=0.0958=0.10%) after merger on 1-11-2012.
This is how Da rate has been calculated so far in all the previous bipartite settlements.
Rate higher than 0.10% is unlikely. but welcome.
Now the  effect of merging D.A with Basic Pay as on 1-11-2012?

The figures below are hypothetical and explanatory for the purpose of study and have no relationship whatsoever with  the actual basic pay  and other allowances that may be agreed upon during the course of bipartite settlement.

Existing After
 DA new-
109 slabs
Basic Pay D.A. (old)
510*.15= 76.50%
total D.A.
New BP @010%
10000 7650 17650 6015 16015 1745 17760
15000 11475 26475 9022.5 24023 2619 26642

This is the effect of D.A. merger for the purpose of study.

The wage increase in percentage terms is  yet to be decided and any % increase  agreed upon  will be calculated on New Basic Pay , and not on existing Basic Pay.
All  benefits such as  HRA, CCA, PF CONTRIBUTION, PENSION,  etc., are calculated on the  basic pay only.
Therefore, this merger point seems satisfactory as it increases the Basic pay handsomely.However, to estimate  your basic pay or salary at this stage is  irrelevant and not possible.
In previous settlements effective date was postponed by an year or so and different heads like B.P, D.A.,Spl.Allowance, etc., was given effect on different dates thereby reducing  the arrears.This time it is from day one.

Historically , the wage agreements in RBI go after  the same merger  process as above, although the quantum of allowances in RBI has been a  bit higher .



5 Responses to “DA merger in Banks-impact”

  1. Swadesh Kumar garg 16/09/2013 at 11:49 am #

    I would like to know the position of eligibility of leave encashment in banks
    under compulsory retirement as punishment


    • wdtom 17/09/2013 at 11:03 am #

      In the case of bank officers, Leave encashment of PL is not allowed for those under compulsory retirement as punishment in terms of Regulations applicable to officers concerned.


  2. p s venugopal 19/09/2013 at 1:36 pm #

    when we can expect next developments in wage revusion


    • wdtom 22/09/2013 at 10:25 am #

      the next date of meeting between IBA and UFBU is yet to be fixed.


  3. ASHOK KUMAR GUPTA 18/10/2013 at 8:25 pm #

    Can we hope Xth BPS before Election.


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