New Delhi, Jul 23 (PTI) Bank stocks gained up to 3 per cent on Thursday amid reports that bank employees' unions and the Indian Banks' Association (IBA) have agreed for an annual wage hike of 15 per cent.

SBI shares rose by 3.28 per cent, ICICI Bank went up by 2.94 per cent, Kotak Mahindra Bank 2.41 per cent, Bandhan Bank 1.76 per cent, RBL Bank 1.69 per cent, City Union Bank 1.01 per cent, Federal Bank 0.71 per cent, HDFC Bank 0.38 per cent and IndusInd Bank 0.10 per cent.

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The BSE Bank index rose by 1.06 per cent.

Also, Bank of Baroda gained 1.03 per cent, Canara Bank 0.20 per cent and PNB inched up 0.15 per cent.

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Capping nearly three years of intense negotiations, bank employees' unions and the Indian Banks' Association (IBA) have agreed for an annual wage hike of 15 per cent, a move that will result in an additional yearly outgo of around Rs 7,900 crore for the lenders.

As many as 8.5 lakh bank employees are set to benefit from the wage hike, which will be effective from November 2017.

Under the agreement reached on Wednesday, Performance Linked Incentive (PLI) will also be introduced for public sector bank staff and it will be based on operating or net profit of individual banks concerned.

Basic pay has been merged with dearness allowance, the IBA said in a statement.

Close to 37 banks, including public, private and foreign banks, have mandated the IBA to negotiate with unions on wage hikes for their employees.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)