Public sector bank employee unions Monday withdrew their call for a four-day nationwide strike, with the management agreeing to a 15 percent hike in wages at an extra burden of Rs 4,725 crore a year and acceding to the demand for holiday on second and fourth Saturdays.

The banks, however, will work full-day on remaining Saturdays instead of the current practice of half-day.

"In today's talks with Indian Banks' Association (IBA), wage revision has been settled at 15 percent with effect from November 2012," United Forum of Bank Unions (UFBU) Convener M V Murali told PTI.

"The cost of medical, hospitalisation scheme and on other items and the cost of superannuation, namely PF/Gratuity/ pension is being separately worked out," he added.

The wage revision would benefit about 8.5 lakh employees and officers in 45 banks, including old generation private sector banks and a few foreign lenders.

Wage revision in PSU banks is done every five years. The previous revision was agreed upon in 2007.

At a meeting in Mumbai, PSU banks employee unions and bank management IBA agreed on wage hike and entered into an MoU in this regard.

"The IBA is pleased to announce conclusion of the 10th bipartite wage negotiations with bank unions and associations to be effective from November 2012. The agreement reached provides for 15 percent increase in pay," IBA Chairman T M Bhasin said in a statement.

Banks have been making provisions for 15 percent wage hike in their balance sheet since November 2012.

The unions had threatened to go on four-day strike from February 25 demanding a 19 percent hike in wages.

"The wage revision is effective from November 2012 and new pay scales will be constructed after merging corresponding All India Consumer Price Index, which was 4,440 points as on November 2011 and works out to be 60.5 percent, with DA and adding a load factor of 2 percent on basic pay," AIBEA General Secretary C H Venkatachalam said.

Both the parties have agreed that within 90 days they will finalise other issues and a bipartite settlement will be signed, he added.

Following a formal agreement, he said, RBI would be informed about changes in working hours on Saturdays.

After RBI's notification, changes in banking hours on Saturdays would come into force, so the new system would take some time, he said.  PTI