Bank Unions Announce Strikes Over 5-Day Banking, PLI Scheme And Pension Demands

(MENAFN- Live Mint) The United Forum of Bank Unions (UFBU) has announced a fresh round of industrial action-including an all-India strike on 11 September, a three-day strike 28-30 September and an indefinite strike from 26 October-over the delay in implementation of a five-day working week, opposition to the government's revised performance-linked incentive (PLI) scheme for senior bank officers and several unresolved pension and service-related issues, its press statement said on Monday.

This comes over two years after the industry's last wage settlement between the Indian Banks' Association (IBA) and the bank unions. The 12th Bipartite Settlement for workmen and the 9th Joint Note for officers were signed on 8 March 2024 and are effective from November 2022 for five years. The settlement provided for a 17% increase in the salary and allowances bill, with the total annual outgo for public sector banks estimated at about ₹12,449 crore. The agreement covered about eight lakh bank employees and officers.

A key issue pending government approval is the introduction of a five-day working week. The IBA and unions had reached an understanding on 7 December 2023 to recommend that all Saturdays be declared holidays for the banking industry. The 8 March 2024 settlement subsequently recorded that the IBA had recommended the proposal to the government and that the revised working hours would become effective after the government's approval and the necessary clearances.

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Under the proposed arrangement, banks would remain closed on all Saturdays, while working hours on the remaining five days would be increased by about 40 minutes a day. The proposal aims to maintain the overall working hours of bank employees. Currently, only the second and fourth Saturdays are holidays for banks. The government's nod and the required regulatory clearances are still awaited.

The other major flashpoint is the PLI scheme. Under the framework negotiated as part of the 11th Bipartite Settlement/8th Joint Note in 2020, the incentive was linked to the overall performance of the bank and was available uniformly to employees and officers up to Scale VII, with a maximum of 15 days' basic pay plus dearness allowance. UFBU maintains that this arrangement was part of the bilateral wage settlement and service conditions negotiated with the IBA.

The Department of Financial Services (DFS), however, introduced a revised PLI framework in November 2024 covering whole-time directors and senior executives from Scale IV to Scale VIII in public sector banks. According to the government's own description, the revised framework assesses performance through parameters including efficiency, business, asset quality and financial inclusion, and combines the bank's overall performance with individual performance. The maximum PLI ceiling is linked to annual basic pay, with the ceiling for scale IV at 70%, scale V and VI at 80%, and scale VII and VIII at 90%; for managing directors and executive directors, the ceiling can go up to 100% of annual basic pay.

UFBU has opposed the revised PLI framework, saying it was introduced without bilateral negotiations and replaces the earlier uniform, bank-linked incentive for senior officers with individual performance-based payouts. The government says the changes are meant to reward senior executives and boost productivity and competitiveness in public sector banks.

The dispute has since moved into the industrial-relations and legal process.

According to the All India Bank Employees Association (AIBEA), the matter has been under conciliation before the Chief Labour Commissioner, with the unions arguing that banks should maintain status quo while the conciliation proceedings are pending. The unions have also challenged the implementation of the DFS framework in Delhi High Court. In August 2026, the IBA and UFBU held another meeting on the issue, with the union reiterating it was willing to discuss modifications to the existing framework and find an amicable solution.

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The third component of the current agitation relates to residual issues left over from the 12th Bipartite Settlement and 9th Joint Note. When the 2024 settlement was concluded, IBA and the unions agreed that a number of demands that could not be resolved during the main negotiations would be discussed further with a view to reaching a mutually acceptable and amicable settlement within six months. The list included pension updates, improvements in the pension scheme, changes relating to medical insurance, a uniform dearness allowance formula for pensioners and other service-related matters.

One of most important issues here is pension update for past retirees. The unions have sought provisions in the pension regulations for periodic updates of pension alongside future wage settlements. They have also sought improvements in the pension scheme and a uniform DA formula for pensioners linked to the 8088-point index. These issues have remained part of the broader residual-issues discussions following the 2024 settlement.

The unions have also been seeking an option for employees covered by the National Pension System to switch to the Old Pension Scheme. This issue has been raised separately by bank officers' organizations and remains part of the broader demands concerning retirement benefits and service conditions. The unions have also raised issues relating to medical insurance and other employee benefits.

The significance of the current dispute lies in the fact that the unions view the five-day banking and PLI questions not as fresh demands but as issues arising from existing agreements or established bilateral arrangements. The five-day week was recorded in the 2024 settlement subject to government approval, while the unions contend that the earlier PLI framework was part of the negotiated service conditions. The residual pension and welfare demands, meanwhile, were specifically identified for further bilateral discussions after the March 2024 settlement.

The wage settlement itself followed a memorandum of understanding signed between IBA and the unions on 7 December 2023. The parties had sought to conclude the final bipartite settlement within 180 days. The final 12th Bipartite Settlement and 9th Joint Note were ultimately signed on 8 March 2024. The agreement was effective from 1 November 2022 and represented the industry's latest five-year wage settlement.

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The confrontation now marks an escalation of disputes that have persisted beyond the 2024 wage settlement. UFBU is seeking implementation of the five-day banking commitment, withdrawal or modification of the revised PLI framework through bilateral negotiations and resolution of the residual pension and service-related issues. The unions have now linked these demands to a phased agitation culminating in an indefinite strike from 26 October if the issues remain unresolved.

Queries on the issue emailed to the finance ministry and the IBA on Monday morning remained unanswered until press time.

UFBU is an umbrella body representing seven bank unions: All India Bank Employees' Association, All India Bank Officers' Confederation, National Confederation of Bank Employees, All India Bank Officers' Association, Bank Employees Federation of India, Indian National Bank Employees' Federation and the Indian National Bank Officers' Congress.

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