Mumbai, April 27: Bankers will have fatter wallets this year.

Almost 5 lakh bank employees and 2.5 lakh officers will get a pay increase of 17.5 per cent after the unions signed their ninth bipartite wage revision agreement today with the Indian Banks’ Association (IBA), the bank employer’s forum.

The wage hike will be effective from November 1, 2007.

The accord will raise the wage bill of the banking sector by over Rs 5,200 crore, annually.

In public sector banks, the additional outgo will be Rs 4,816 crore. For private and foreign banks, it will amount to Rs 400 crore.

The wage bill of nationalised banks stood at Rs 27,520 crore as on March 31, 2007.

The settlement will cover 26 nationalised banks, 12 private sector banks and eight foreign banks.

The IBA, six workmen unions and four officers’ associations signed the agreement that will be valid for five years.

A statement issued by the IBA in the evening said the basic pay of officers at the entry level will be between Rs 14,500 and Rs 52,000 per month (compared with a floor of Rs 10,000, earlier).

The basic pay for clerical staff will range between Rs 6,200 and Rs 23,900. Subordinate staff will get between Rs 5,500 and Rs 13,800 per month.

Dearness allowance will be payable for every rise or fall of 4 points over 2836 points in the quarterly average of All India Average Working Class Consumer Price Index (General) Base 1960 = 100 at 0.15 per cent of pay.

Besides the wage hike, it was decided that employees and officers covered by the provident fund scheme would be given the option to join the pension scheme. This means that employees and officers who did not opt for pension (choosing instead to be covered by a provident fund) when it was offered in 1993 could switch over to the pension plan.

Reports say that in such an event, those who have retired will have to surrender over 50 per cent of PF money, including interest.

The IBA added that a defined contributory retirement benefit scheme as governed by the contributory pension scheme introduced for employees of the central government with effect from January 2004 will be introduced for workmen/officers joining the services of banks on or after April 1 this year.

A statement from the All India Bank Employees Association says that under the settlement close to 2.60 lakh employees and officers who are now covered by contributory provident fund will get a chance to join the pension scheme which is a demand of the unions. More than 50,000 retirees will also get the option to join the pension scheme.

Bank unions welcomed the wage agreement inked today, though the INTUC-affiliated Indian National Bank Employees’ Federation said it signed the pact under protest.

“This is one of the greatest achievements...it is the best deal employees can get,” said G D Nadaf, the general secretary of the All India Bank Officers Confederation.