As a result of the massive payout of arrears by banks to their employees in the next few weeks it is all set to give push the business of e-commerce companies and retailers upwards. Several government owned banks are gearing up to release the salary arrears that total to several thousands of crores to the employees and it is likely to translate to the higher consumer spending.
In February this year, the Indian Banks’ Association accepted for a 15 percent increase in the wages for 10 lakh bank employees. This has increased the annual banks’ expense by Rs 4,725 crore. The last time when there was a salary revision was in November 2012. Eventually, the bank employees will receive arrears in their pay of 30 months. The outgo of the arrears by banks is predicted to be Rs 11,812 crore.
As a result of this, the lowest rank employee in a bank – a sub-ordinate staff will receive around Rs 40,000 in arrears. A general manager will receive around Rs 3 lakh. Regarding this, the General Secretary of the All India Bank Employees Association, CH Venkatachalam stated that some banks including Corporation Bank, Punjab National Bank and Canara Bank have already paid a segment of the arrears. A few other banks will be paying the same in August and September this year.
The consumer spending is already on the rise with the attractive interest rates that prompt people to buy more consumer durables availing monthly payment options and e-commerce firms providing enticing discounts and cashbacks.
As per a research by ANZ Morgan, the consumer sentiment was the highest this year with more people hoping that there will be better days ahead. The study stated that 41 percent of the respondents have stated that they expect their families to be better off on the financial grounds within a year. On the other hand, only 10 percent of the respondents expect their families to be worse off financially.