13th Bipartite Settlement — Date, Expected Salary Hike & Latest News

Last updated: June 30, 2026

The 13th Bipartite Settlement is the upcoming wage revision agreement for approximately 8 lakh public sector bank employees, effective from 1 November 2027. The Department of Financial Services issued a directive on 20 April 2026 (ref: eF. No. 4/2/1/2026-IR) instructing banks and the IBA to conclude negotiations within a maximum of 12 months.

What Is the 13th Bipartite Settlement?

A bipartite settlement is a wage revision and service conditions agreement signed between two parties: the Indian Banks’ Association (IBA), representing the management of public sector banks, and the recognised employee unions. Nine unions participate in these negotiations — AIBEA, NCBE, BEFI, and INBEF represent clerical and sub-staff, while AIBOC, AIBSNBOF, INBOC, and NOBO represent officers. A joint settlement for officers is separately referred to as a Joint Note.

The 13th Bipartite Settlement — officially the 13th Bi-partite Settlement / 10th Joint Note — is the upcoming wage revision agreement for approximately 8 lakh employees of public sector banks across India. Each settlement governs the pay structure, allowances, service conditions, and welfare measures for a five-year cycle. The 13th BPS will cover the period from 1 November 2027 to 31 October 2032.

When Is the 13th BPS Effective?

The 13th BPS is due to take effect from 1 November 2027, immediately following the expiry of the 12th BPS period (1 November 2022 to 31 October 2027). The Department of Financial Services has directed that negotiations be concluded within 12 months — targeting completion by approximately April 2027 — with all consequential regulatory amendments in place well before the November 2027 effective date.

With the DFS advisory issued in April 2026, negotiations should close around April 2027. This leaves approximately seven months for banks to complete the consequential amendments to relevant regulations — a process that typically takes three to four months — before the settlement takes effect on 1 November 2027.

Finance Ministry Letter — 20 April 2026

In the first significant development towards the 13th BPS, the Department of Financial Services (DFS), Ministry of Finance issued a formal advisory letter — eF. No. 4/2/1/2026-IR, dated 20 April 2026 — to the Chairman of the State Bank of India and to the Managing Directors and CEOs of all Nationalised Banks. The Indian Banks’ Association (IBA) was copied on the letter with a specific request to keep DFS informed of progress at regular intervals, preferably monthly.

The key directives in the letter are:

• Banks must initiate and conclude negotiations within a maximum period of twelve months.
• Consequential amendments to the relevant Regulations must be completed before 01.11.2027 — the scheduled commencement date of the 13th BPS.
• The amendment process typically takes three to four months; banks are advised to begin the amendment process immediately upon conclusion of negotiations.
• IBA is required to keep DFS apprised of developments at regular intervals, preferably monthly.

The letter explicitly acknowledges that the 12th BPS was concluded in approximately 14 months — a significantly shorter period than the historical average of around two and a half years. DFS has signalled that this faster conclusion should now be treated as the expected standard, not an exception.

Historical Precedent — DFS Advisory Letters

This is not the first time DFS has written to IBA and bank managements ahead of a bipartite settlement. Similar pre-negotiation advisory letters were issued before both the 11th and 12th BPS, urging timely commencement and conclusion of negotiations. The pattern underscores the government’s desire to ensure that wage revision arrears — which accrue from the effective date and are paid out only after the settlement is signed — do not pile up over years, creating financial uncertainty for employees.

The 11th BPS, which was effective from 1 November 2017, took approximately three years to conclude — a delay that meant employees received arrears only in 2020–21. By contrast, the 12th BPS was concluded in around 14 months, setting a precedent for faster settlements. The DFS advisory of April 2026 indicates that the government wants the 13th BPS to follow the same efficient model.

What Can Bank Employees Expect?

Expected Salary Revision

Salary hikes in bipartite settlements are expressed as a percentage load on the total wage bill — not as a flat percentage increase for individual employees. This means the actual increase varies by pay scale and grade. The 12th BPS carried a wage load of approximately 17 per cent. The 11th BPS carried a load of approximately 15 per cent.

For the 13th BPS, employee unions are expected to demand a significantly higher wage load — estimates in banking circles range between 25 and 30 per cent — driven by inflation since 2022, the growing salary gap between public sector and private sector banks, and unresolved demands from the 12th BPS round. The actual hike will be determined through negotiations between IBA and the unions; no official figure has been announced as of June 2026.

Key Demands Expected in 13th BPS

While the formal charter of demands has not yet been submitted, the following issues are widely expected to dominate the 13th BPS negotiations:

1. 5-day banking (Monday to Friday): The demand for Saturday and Sunday as weekly offs — matching central government employees — was not resolved in the 12th BPS despite extended negotiations. It remains the single most prominent demand and is expected to be the centrepiece of the 13th BPS agenda.
2. Pension updation for pre-2002 retirees: Employees who retired before November 2002 — before the introduction of the New Pension Scheme — seek their pension revised in line with current pay scales, similar to central government pension updation.
3. Family pension improvement: Currently family pension in banks is 15% of last drawn basic pay, subject to a ceiling. Unions seek an increase to 30%, in line with central government employees.
4. Enhanced HRA and allowances: House rent allowance and other allowances have not kept pace with actual cost of living in many cities, particularly in metro centres.
5. Stagnation increments: Better provisions for employees who have reached the top of their pay scale with no further increments available.
6. AI and automation policy: An emerging demand in the current banking technology environment — unions are expected to push for job security assurances, reskilling opportunities, and a defined policy on how AI tools are deployed in banking operations.

5-Day Banking Week — Current Status (June 2026)

The 5-day banking week (Saturday and Sunday off) is the most talked-about demand among public sector bank employees heading into the 13th BPS. Here is where it stands as of June 2026.

What Has Been Agreed So Far

On March 8, 2026, the Indian Banks’ Association (IBA) and nine recognised bank employee unions signed the 9th Joint Note, which included a recommendation for a five-day working week for bank employees. This brought banks in line with what central government employees have long enjoyed — a two-day weekend. The MoU proposing a five-day workweek was originally initiated in December 2023 as part of the 12th BPS process.

What Is Still Pending

IBA and union agreement alone is not sufficient. Implementation requires:

• Finance Ministry approval — as banks are public sector entities under the purview of the Department of Financial Services.
• RBI notification — as any change in bank working days has regulatory implications for clearing, settlements, and customer transactions.
• Possible amendment to the Negotiable Instruments Act, 1881, which governs cheque presentation and payment timelines linked to banking days.

As of June 2026, neither the Finance Ministry nor RBI has granted final approval. The government has acknowledged the demand and issued periodic assurances, but no gazette notification or circular has been issued.

Proposed New Banking Hours

To compensate for the lost Saturday, banks would extend daily working hours by approximately 40 minutes. The proposed schedule is:

For customers, this means branches will remain open longer on weekdays. ATMs, net banking, and mobile banking will continue to function 24×7 regardless of the working-day change.

Where Things Stand — June 2026

Will the 8th Pay Commission Affect Bank Employees?

No. Public sector bank employees are not covered by the 8th Pay Commission. This is a common point of confusion, so it is worth clarifying directly.

The Pay Commission system applies to central government employees — ministries, departments, and central PSUs that follow the pay commission structure. Public sector bank employees are governed by a separate, parallel mechanism: the bipartite settlement, negotiated directly between the Indian Banks’ Association (IBA) and recognised bank employee unions, independent of the Pay Commission process.

So while the 8th Pay Commission announcement has generated a wave of salary-hike speculation across government circles, it has no direct bearing on what bank employees will eventually receive. Bank employees should track the 13th BPS process — charter of demands, IBA-union negotiations, and the DFS-mandated timeline — rather than Pay Commission news, for the relevant updates on their own salary revision.

Latest Updates

• June 29, 2026 — UFBU Circular No. UFBU/2026/15 confirms DFS has advised banks and IBA to begin early steps for 13th BPS/10th Joint Note negotiations, ahead of the formal charter of demands. The same circular notes a High-power Committee is being set up by the government to take forward banking sector reforms, and that 5-day banking remains under conciliation before the Chief Labour Commissioner — UFBU plans a delegation meeting with the newly-appointed DFS Secretary to press for implementation.
• June 2026 — Formal negotiations between IBA and unions not yet initiated. Charter of demands not yet submitted. DFS 12-month clock began April 20, 2026 — deadline is approximately April 2027.
• March 8, 2026 — 9th Joint Note signed by IBA and bank employee unions recommending a 5-day banking work week (Saturday and Sunday off). Awaiting approval from the Finance Ministry and RBI.
• January 27, 2026 — NCBE issued notice for an all-India bank strike over the delayed 5-day week. Strike deferred after assurances from the Finance Ministry and IBA.
• 20 April 2026 — The Department of Financial Services, Ministry of Finance issues advisory letter (eF. No. 4/2/1/2026-IR) to the Chairman of SBI and MD & CEOs of all Nationalised Banks. IBA is copied for necessary action. Banks are directed to initiate and conclude 13th Bipartite Settlement / 10th Joint Note negotiations within a maximum period of twelve months and to complete all consequential regulatory amendments before 01.11.2027. The letter is signed by Vijay Shankar Tiwari, Under Secretary to the Government of India.

Conclusion

The 13th Bipartite Settlement is in its earliest stages — formal negotiations between IBA and employee unions are yet to begin. However, the DFS advisory of April 2026 has set a clear 12-month deadline and signals strong government intent for a timely conclusion. For the approximately 8 lakh public sector bank employees across India, the next 12 to 18 months will be a critical period. Key issues such as the 5-day banking week, pension updation, and the salary revision quantum will shape the outcome. Bookmark this page — the Latest Updates section above will be refreshed as developments unfold.