12th Bipartite Settlement Update 2026 — Salary Hike, Arrears & Full Details
Every five years, salaries of public sector bank employees are revised through a Bipartite Settlement — a formal wage agreement between the Indian Banks’ Association (IBA) and bank unions. The 12th Bipartite Settlement is among the most searched topics for bank employees today, with questions around the salary hike percentage, arrears, and implementation status. After more than 16 months of negotiations, the settlement was formally signed on March 8, 2024, delivering a 17% wage revision effective from November 1, 2022. This article gives you the complete verified update — signing timeline, salary components revised, component-wise changes, arrears status, and what is still pending as of 2026.
- Settlement Number: 12th Bipartite Settlement
- Parties: IBA + UFBU (9 member unions)
- 9th Joint Note: Signed same day for officers (Scale I–VII)
- Status: Implemented — salary revised from March 2024
- Wage Hike: 17% on payslip cost (as of March 31, 2022)
- Effective Date: November 1, 2022
- Valid Till: October 31, 2027
- Arrears Period: November 2022 — February 2024 (16 months)
- Arrears Status: Paid at most banks; phased at some
- Applies to: Clerks, sub-staff, and officers in PSU Banks
What Is Bipartite Settlement?
A Bipartite Settlement is a wage agreement negotiated between the Indian Banks’ Association (IBA) — representing bank managements — and UFBU (United Forum of Bank Unions), representing employees. It covers salary revision, DA merger, HRA, special allowance, leave encashment, and other service conditions. A new settlement is due every five years. The settlement for workmen employees is called the Bipartite Settlement; the parallel document for officers is called the Joint Note, and both are typically signed simultaneously.
The 12th Bipartite Settlement covers the period November 1, 2022 to October 31, 2027. The previous 11th Bipartite Settlement covered November 1, 2017 to October 31, 2022 and was itself signed with a 3-year delay in November 2020. The 12th BPS was negotiated faster and signed within 16 months of the due date.
12th Bipartite Settlement — Negotiation Timeline
Understanding how negotiations progressed helps employees track when salary revisions took effect and why the revised pay and arrears were reflected only from March 2024 — not from November 2022.
UFBU submitted its charter of demands to IBA in October 2022, as the 11th BPS period was ending on October 31, 2022.
Department of Financial Services advised PSBs to begin negotiations. IBA sought individual bank mandates to represent management.
IBA signed a mandate framework MoU, formally authorising it to represent member banks in wage negotiations with UFBU.
17% wage hike agreed in principle. IBA and UFBU signed a Memorandum of Understanding on the quantum of wage revision.
12th Bipartite Settlement and 9th Joint Note formally signed in Mumbai. Revised salaries implemented from the March 2024 paycheck.
Banks began disbursing 16-month arrears (November 2022 to February 2024) in phases, following Board-level approvals at each bank.
Salary Hike — What Was Agreed
The 12th Bipartite Settlement provides a 17% increase on the payslip component of establishment expenses, measured on the total wage bill of each bank as of March 31, 2022. This is not 17% on basic pay alone — it is 17% on the entire salary cost including basic, DA, HRA, and special allowance. The total additional annual outflow for all public sector banks combined is approximately ₹12,449 crore.
The base for calculation is the total payslip cost of each IBA-member bank as of March 31, 2022. All salary components — basic pay, DA, HRA, special allowance, and other allowances — are added to arrive at total payslip cost. The agreed 17% is applied on this total. The result is then distributed across revised basic pay, HRA, and special allowance slabs. Because DA was merged into basic before the loading was applied, the new basic pay appears significantly higher than old basic pay — this does not mean a more-than-17% increase; it reflects the structural change from a low-basic+high-DA model to a higher-basic+lower-DA model.
Component-Wise Salary Changes
The following table shows the key changes across salary components between the 11th and 12th Bipartite Settlements. These are based on the formal settlement document dated March 8, 2024.
| Component | 11th BPS | 12th BPS | Change |
|---|---|---|---|
| Basic Pay (Scale I start) | ₹23,700 | ₹48,480 (approx) | DA merged + 3.22% loading |
| DA Loading | 2.5% on merged pay | 3.22% on merged pay | Increased by 0.72% |
| DA Formula Base Year | 1960 = 100 | 2016 = 100 (new) | Base year shifted |
| DA Rate per Index Point | Complex slab system | 1% per index point | Simplified formula |
| HRA — Area I (metros) | ~8.5% of pay | 10% of pay | +1.5% |
| HRA — Area II (urban) | ~7.5% of pay | 9% of pay | +1.5% |
| HRA — Area III (semi-urban) | ~6.5% of pay | 8% of pay | +1.5% |
| Special Allowance (Scale I–III) | ~16.65% of pay | ~30.75% of pay | Substantially revised |
| Special Allowance (Scale IV–V) | ~16.65% of pay | ~33% of pay | Higher for senior scales |
| Wage Hike % | 15% | 17% | +2 percentage points |
| Total Additional Annual Cost | ₹7,898 Cr/yr (PSBs) | ₹12,449 Cr/yr (PSBs) | +57% higher outflow |
Real Salary Impact — What It Means for You
Scenario: A Scale I officer with 5 years of service. Approximate figures based on 17% overall payslip cost increase. Actual individual impact depends on DA rate applicable, bank-specific scales, and date of increment. All figures are illustrative.
| Component | 11th BPS (Oct 2022) | 12th BPS (Mar 2024) |
| Total Gross Salary (approx) | ₹60,000 | ₹70,200 |
| Monthly Gain | ₹10,200 per month | |
| Annual Gain | ₹1,22,400 per year | |
| Arrears (16 months) | ₹1,63,200 (approx, before deductions) | |
Note: Higher scales (Scale II and above) receive a proportionally higher absolute gain. For clerks, approximate monthly gain is ₹5,000–₹7,000 depending on stage in the scale.
Arrears — Calculation and Payment Status
Since the 12th Bipartite Settlement is effective from November 1, 2022 but was formally signed on March 8, 2024, there is a 16-month gap during which employees continued drawing 11th BPS salaries. The difference in salary for this entire period — from November 1, 2022 to February 28, 2024 — is payable as arrears. Revised salaries began reflecting in March 2024 paychecks.
- Arrears Period: November 1, 2022 to February 28, 2024
- Duration: 16 months
- Arrears for Clerk (approx): ₹80,000 – ₹1,12,000
- Arrears for Scale I Officer (approx): ₹1,20,000 – ₹1,65,000
- Arrears for Scale IV+ Officer (approx): ₹2,00,000+
- Payment status: Substantially completed at most PSBs by end of 2024
- Tax impact: Arrears are taxable as salary income in the year of receipt; employees can apply for relief under Section 89(1) of the Income Tax Act
Each bank requires Board-level approval before implementing the settlement and releasing arrears. Larger banks like SBI, PNB, and Canara Bank completed this quickly after signing. If your bank has not yet credited arrears, check with your branch HR or union representative. For DA rates applicable during the arrears period, refer to the IBA quarterly DA circulars for each quarter from November 2022 onwards.
11th vs 12th Bipartite Settlement — Comparison
| Factor | 11th BPS | 12th BPS |
|---|---|---|
| Signed | November 11, 2020 | March 8, 2024 |
| Effective From | November 1, 2017 | November 1, 2022 |
| Valid Till | October 31, 2022 | October 31, 2027 |
| Delay in Signing | 3 years 11 days | ~16 months |
| Wage Hike % | 15% | 17% |
| DA Loading | 2.5% | 3.22% |
| DA Base Year | 1960 = 100 | 2016 = 100 |
| HRA (Area I) | ~8.5% of pay | 10% of pay |
| Officer Settlement | 8th Joint Note | 9th Joint Note |
| Additional Annual Cost (PSBs) | ₹7,898 crore | ₹12,449 crore |
| Pension / Retirees | Ex-gratia continued | Ex-gratia enhanced; DR revised |
| 5-Day Banking | Not agreed | Agreed in principle; govt notification awaited |
Impact by Employee Category
- Approximate monthly gain: ₹5,000–₹7,000
- Arrears for 16 months: ₹80,000–₹1.1 lakh
- HRA improved by 1.5% across all areas
- Special allowance substantially revised
- Governed by Bipartite Settlement (not Joint Note)
- Approximate monthly gain: ₹8,000–₹20,000+ (varies by scale)
- Arrears: ₹1.3 lakh to ₹3 lakh+ depending on scale
- Governed by 9th Joint Note (signed March 8, 2024)
- Special allowance: 30.75%–33% of pay by scale
- Higher stagnation increments added
- Dearness Relief revised under new CPI formula
- Monthly ex-gratia payable for those retired on or before Oct 31, 2022
- Ex-gratia valid for duration of 12th BPS (Nov 2022–Oct 2027)
- Full pension updation NOT agreed (ex-gratia only)
- Unions continue to demand wage-linked full pension revision
Common Misunderstandings About 12th Bipartite Settlement
- Myth: Salary doubled. Fact — The hike is 17% on total payslip cost. Basic pay appears higher because DA was merged into basic pay, not because of a separate additional increase.
- Myth: Arrears already paid at all banks. Fact — Each bank implements on its own Board-approved schedule. Most major PSBs paid by end of 2024, but some banks may be on a phased schedule. Check with your HR or union.
- Myth: Same hike for all scales. Fact — The 17% applies to total payslip cost. In absolute rupee terms, higher scales receive a larger monthly and annual benefit because their base salary is higher.
- Myth: 5-day banking is now implemented. Fact — 5-day banking (all Saturdays as holidays) was agreed in principle in the settlement, but requires a government notification under the Negotiable Instruments Act. As of 2026, this notification has not been issued.
- Myth: Private bank employees are also covered. Fact — Only employees of IBA-member banks are covered. Select private banks (Federal Bank, Karnataka Bank, Kotak Mahindra Bank, IDBI Bank) that have voluntarily joined the IBA mandate are also covered. Most private sector banks are not.
What Is Still Pending After the 12th Settlement
While the main salary revision and arrears are substantially done, several union demands were not fully addressed in the 12th Bipartite Settlement and remain open:
Agreed in principle in the settlement. IBA has recommended it to the Finance Ministry and RBI. Requires an amendment or notification under the Negotiable Instruments Act to make all Saturdays bank holidays. As of 2026, government notification is still awaited.
Unions demanded wage-linked pension revision for existing retirees. Only an ex-gratia payment was agreed. Full pension updation — where pension is revised in proportion to each wage revision — remains unresolved and continues as a union demand.
Unions had demanded 25–30% and settled at 17%. The gap between demand and settlement creates the foundation for stronger demands in the 13th Bipartite Settlement, due from November 2027.
Improvements were made but unions feel the coverage for retired employees and their dependants needs to be strengthened further.
Conclusion
The 12th Bipartite Settlement, signed March 8, 2024, is a landmark wage revision that delivers a 17% increase on the total salary cost for over 4 lakh bank employees in public sector banks. With the effective date of November 1, 2022, employees received 16 months of arrears in addition to revised monthly salaries from March 2024. The 9th Joint Note covers officers while the Bipartite Settlement covers workmen employees — both signed on the same day. While the major financial benefits have been implemented, demands like full pension updation and 5-day banking remain work-in-progress for future negotiations.
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Read: DA for Bank Employees 2026 →Related Articles on BankersClub
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Disclaimer: Salary figures and arrears amounts in this article are illustrative estimates based on a 17% overall increase. Actual individual salary and arrears will vary based on scale, stage, bank-specific pay scales, and applicable DA rates for each quarter of the arrears period. For precise figures, refer to your bank’s HR circular or the official settlement document. For the latest updates, visit IBA official website. Updated as of April 2026.
Is the 12th Bipartite Settlement implemented?
Yes. The 12th Bipartite Settlement was formally signed on March 8, 2024 in Mumbai between IBA and UFBU. Revised salaries were implemented from March 2024 paychecks across public sector banks. Simultaneously, the 9th Joint Note covering officer-grade employees was also signed. The settlement is effective from November 1, 2022 to October 31, 2027. Most IBA-member public sector banks have implemented the revised salary structure and paid the 16-month arrears covering November 2022 to February 2024.
What is the salary hike percentage in 12th Bipartite Settlement?
The 12th Bipartite Settlement provides a 17% increase on the payslip component of establishment expenses, calculated on the total payroll cost as of March 31, 2022. This covers basic pay revision with DA merger, revised HRA, and enhanced special allowance. Bank unions had originally demanded 25 to 30%. The settled 17% is an improvement over the 11th BPS which provided 15%. The total additional annual outflow for all public sector banks is approximately Rs.12,449 crore.
When were 12th Bipartite Settlement arrears paid?
Arrears cover November 1, 2022 to February 28, 2024 — a period of 16 months. Revised salaries began reflecting in March 2024 paychecks. Arrear payments started from March 2024, with each bank following its Board-approved implementation schedule. As of 2025, most major public sector banks including SBI, PNB, Canara Bank, Union Bank and Bank of Baroda have completed arrear disbursement. Employees who retired between November 2022 and February 2024 are also entitled to receive arrears on a pro-rata basis.
Who is eligible for the 12th Bipartite Settlement?
The 12th Bipartite Settlement covers workmen employees (clerks and sub-staff) in IBA-member public sector banks. The 9th Joint Note, signed on the same date, covers officer-grade employees from Scale I to Scale VII. Together, both documents cover approximately 4 lakh bank employees across 25 IBA-member banks — all major PSBs and select private and foreign banks that participate in the IBA wage mandate. Employees in cooperative banks and RRBs are governed by separate settlements.
What is the difference between 11th and 12th Bipartite Settlement?
The 11th Bipartite Settlement was signed on November 11, 2020 after more than 3 years delay, effective November 2017, with a 15% wage hike. The 12th BPS improves on several fronts: 17% hike on a higher wage base, DA loading of 3.22% versus 2.5% in the 11th BPS, revised DA formula with new CPI base year 2016=100, improved HRA rates (10/9/8% versus 8.5/7.5/6.5%), and higher special allowance slabs ranging from 26.50% to 33% of pay. The 12th BPS was also concluded faster — signed within 16 months of the due date, compared to over 3 years delay in the 11th BPS.
