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Circular No. NCBE (W.B)/57/2011-12
DATE: 30.08.2011


We reproduce below the text of letter No.GOVT/2011/33 dated 22nd August 2011 issued by Shri M.V.Murali, General Secretary, National Confederation of Bank employees addressed to Shri Alok Nigam, Joint Secretary, Department of Financial Services, Government of India on the captioned subject for information of our affiliates/members.

With warm greetings,


General Secretary

LETTER NO.GOVT/2011/33 DATED 22/08/2011

Sri Alok Nigam,

Joint Secretary,

Department of Financial Services,

Government of India,

Ministry of Finance,

Jeevan Deep Building,

Pariliament Street,

New Delhi-110 001.

Dear Sir,

On re-employment in Bank, the Ex-Servicemen are given pay fixation protecting the salary and allowances they were drawing at the time of their discharge from the services. The components of salary which are to be reckoned have been defined and advised to all the Government / Public Sector undertakings including Banks through IBA by the Government from time to time.

The Indian Bank’s Association was advised by the Department of Financial Services vide letter No.F.4/1/2009-SCT(B) dated 21.10.2010 that in the absence of any guidelines from DOPT/MOD, fitment of salary of ex-servicemen re-employed on or after 01.01.2006 may be fixed on the basis of guidelines issued earlier by the Government as contained in Chapter V of the Compendium of Government guidelines published in December 2000.

Since the “Grade Pay” was not in existence prior to 01.01.2006 the guidelines contained in the Compendium  has no mention of the same. Whereas the ex-servicemen who retired after 01.01.2006 were drawing “Grade Pay” and it was defined by the 6th Pay Commission and also as well as by DOPT that the pay means “the pay band plus grade pay”. The DOPT vide para 2(i) of its Memorandum No.3/19/2009 dated 8th November 2010 has clarified that “Pay” means “the pay band plus grade pay” in respect of those retired after 01.01.2006.

The said memorandum was forwarded to all Public Sector Banks including IBA by the Department of Financial Services vide letter No. 4/1/2010-SCT(B) dated 22nd November 2010. In the absence of the specific direction from the Department of Financial Services, the IBA sought clarification as to the definition of “Pay” vide its letter dated 4th February 2011.

In the meantime, the Ministry of Defence vide its letter No.49/Grievance/DGR/Fin dated 26th April 2011 clarified to the Department of Financial Services that “Grade Pay” has to be reckoned fro fixation of pay to ex-servicemen re-employed in Bank and advised to send suitable clarification/reply to IBA in this regard.

Whereas, the clarification from the Department of Financial Services is still awaited, in the absence of which, the ex-servicemen re-employed in the Banks were not given fitment and they were continued to be paid the salary at the 1st stage of the Basic Pay.

In this connection, we invite your attention to the informal reference the undersigned had with you on the captioned subject on 03.08.2011 soon after conclusion of the discussions with the officials of Department of Financial Services and IBA on our strike issues in the Banking Industry had with representatives of UFBU. You were kind enough to respond positively and assured to look into the matter.

We request you to bestow your personal attention and see that the clarification is sent at the earliest so as to abviate the hardship being caused to the re-employed servicemen whose rerixations have been held up for than 3 to 5 years as a consequence of which they are continued to be paid salary and allowances upto 50% less than what they are entitled to.

We await your early positive response in the matter.

Yours faithfully,

Sd/- M.V.Murali