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.

Settlement	Effective Date	Time to Conclude	Concluded
10th BPS / 7th Joint Note	01 November 2012	~2.5 years	2015
11th BPS / 8th Joint Note	01 November 2017	~3 years	2020
12th BPS / 9th Joint Note	01 November 2022	~14 months	2023–24
13th BPS / 10th Joint Note	01 November 2027	Target: 12 months	Pending

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 April 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.

Latest Updates

• 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.