The Indian Banks' Association-brokered eighth bipartite wage settlement for the banking industry has hit an air pocket with the State Bank of India signing a separate settlement for its around 200,000 employees.

Under the settlement, SBI has revised the special compensatory allowance and other allowances of its employees ahead of the industry-wide pact.

SBI has signed the settlement with two organisations - the All India State Bank Employees Federation and the All India State Bank Officers' Federation.

Bankers say this development will create a rift between the unions and may deal a blow to the negotiation process.

This development comes even as the wage negotiation process is still at a preliminary stage, despite being kicked off nine months back.

Eight formal and two informal meetings have taken place between the IBA wage negotiation committee and the unions since October last year.

While the unions want an 18 per cent hike in pay, the managements of public sector banks are agreeable to only a 7.5 per cent increase.

The All Indian Bank Officers Association has alleged that the two SBI unions, which owe allegiance to the National Confederation of Bank Employees and All India Bank Officers Confederation, have entered into agreements with the SBI management in respect of industry level issues like staff mobility, technology and compensatory settlement for pension cost.

The latest SBI-union settlement package, which will be implemented with retrospective effect from October 2001, will see SBI officers and workmen getting a hike of anywhere between Rs 215 and Rs 800 per month.

The package is likely to cost SBI Rs 150-200 crore annually.

According to R J Sridharan, general secretary, AIBOA, SBI, being a member of the Indian Banks' Association, should adhere to the all-India settlement.

The bank could exercise its option to give benefit to its employees beyond the industry level settlement only in respect of welfare measures, certain reimbursement items, promotions, and ex-gratia/ bonus as profit sharing. All other allowances and pay are to conform to the national settlement.

"We are not against SBI giving more to its officers and employees. But, as a member of the United Forum for Bank Unions and signatory of seven industry level settlements in the past, we want equal pay for equal work and uniformity of wages and service conditions in all banks covered by the agreement," he said.