Mumbai, May 3: A major decision regarding the Dearness Allowance (DA) for bank employees has been made. The government has increased the DA for bank employees effective May 1. This increase follows a similar announcement for central government employees, where the DA was raised by 2%, moving from 58% to 60%.
The new DA rates for bank employees will be applicable from May to July 2026. The increase is based on the average Consumer Price Index (CPI) for the first three months of 2026. The DA has now been set at 25.70%, up from the previous rate of 25%. This translates to a 0.70% increase, meaning bank employees will see a slight rise in their salaries during this quarter.
Details of the Increase
For example, if a bank employee’s basic salary is approximately ₹67,000, the DA at the previous rate of 25% would amount to ₹21,451.85. With the new rate of 25.70%, the DA increases to ₹22,052.50, resulting in an additional ₹600.65 per month. As basic salaries increase, the DA amount will also rise.
Government’s Directive to Public Sector Banks
Recently, the government instructed public sector banks (PSBs) to initiate timely discussions regarding the 13th bipartite wage settlement. This process is expected to be finalized within the next 12 months. Wage revisions for PSB employees will be effective from November 1, 2027. Financial institutions, including public sector banks and insurance companies, typically revise employee salaries every five years. The Indian Banks’ Association (IBA) negotiates wage agreements with employee organizations.
The Department of Financial Services has directed bank heads to take necessary steps to commence discussions for the upcoming wage revision. The letter emphasizes that the negotiation process should be completed within a maximum of 12 months, indicating that bank employees can expect salary increases in the new year.
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