Gratuity Increase for Bankers – 6 Developments so far

Last updated by Jai on April 2, 2017

The law related to gratuity is governed by Payment of Gratuity Act.  And to increase the Gratuity Limit, Payment of Gratuity Act will be amended by Parliament.

The Gratuity Act amendment is yet to take place. There is no Payment of Gratuity Act 2016 or Payment of Gratuity Act amendment in 2016 because the Act has not been yet placed in Parliament. Latest amendment to Gratuity Act was in 2010.

Update [23rd February 2017]

The central government today agreed to allow millions of organised sector employees to withdraw up to Rs20 lakh from their gratuity corpus, double the amount permitted now.

The agreement came following a meeting between the labour ministry and representatives from states, employees and employers on Thursday.

“All the stakeholders—states, Centre, unions and the industry representatives were on the same page to enhance the gratuity ceiling from Rs10 lakh to Rs20 lakh,” a labour ministry spokesperson said after the meeting.

[source: mint]


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Gratuity Increase for Bankers – 6 Developments so far:

For Central Govt. workers Gratuity ceiling is raised to Rs. 20 lacs under 7th Pay Commission w.e.f. 01.01.2016.

Gratuity ceiling for RBI staff is enhanced from Rs. 9 lacs to Rs. 18 lacs w.e.f 01.01.2016.  Calculation is one month pay plus dearness allowance for every completed year of service.

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However for bankers/ insurance staff/ public sector undertakings staff/ private sector staff the gratuity limit is Rs. 10 lacs till date.

Initiatives made by various bank unions in the matter of enhancement in gratuity ceiling:

1. All India State Bank Officers Federation, vide letter dated 19.07.2016 has taken up the matter with Central Labour Minister for increasing the gratuity limit to Rs.20 lacs.

2. All India Bank Officers Confederation, vide letter dated 17.09.2016, written to Finance Minister for amendment in central Gratuity Act in the forthcoming session of parliament.

3. All India State Bank Officers’ Federation vide letter dated 06.11.2016 took the matter with hon’ble Prime Minister.

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4. AIPNBOA on 19.09.2016 has written to Finance Minister, to  enhance gratuity limit for bank employees from Rs.10 lac to Rs.20 lac.

5. All India State Bank Officers’ Federation vide letter dated 29.12.2016 has made an appeal to Prime Minister & also written to Smt. Arundathi Bhattacharya, Chairman State Bank of India to persuade the Govt. and get the gratuity limit enhanced at par with Central Govt. Employees.

6. UFBU has now called strike on 28th February, 2017 on various issues and enhancement of gratuity ceiling to Rs. 20 lacs.

Also Rad: 5 Days working for Banks

We’ll keep on updated you about latest news on gratuity act in India

Leave your comments below.

Categories: ArticlesHR


roshan lal chopra · February 24, 2017 at 9:46 am

ONE RANK ONE PENSION I.E. OROP should be started in the Bank’s retired employees immediately.

    malayendu sarkar · July 15, 2017 at 3:12 pm

    First of all demand for revision as per bps….then OROP

Swati sonsale · February 26, 2017 at 9:11 am

I am taking vrs in March 27.will bank give me increased gratuity? Any chances?

    Jai · March 1, 2017 at 11:00 am

    Parliament will amend the gratuity act and subsequently Income Tax Act for effecting the increase in gratuity ceiling, but there is no clarity, if it will be retrospective and what will be the effective date.

PULAK BHATTACHARYA · May 25, 2017 at 11:37 pm

I fail to understand why the Government is taking so much time to amend the gratuity act in the parliament whenever they agreed to enhance the limit .Bank unions should pressurise the Government to expedite the move and persuade the parliamentarians to look into the matter seriously.The effective date and calculations should commmensurate with the demands of the unions that have been placed by almost all unions previously.

    Swati sonsale · May 27, 2017 at 12:38 pm

    Ok. Thanx for updating me ! But what will be the effective date? I took vrs on 31 March 2017 .will I get it?

Pulak Bhattacharya · June 2, 2017 at 5:24 pm

The effective date for the increase of gratuity ceiling should be from 01.01.2016 as it was followed in case of RBI. So you can be rest assured that you would be eligible for getting the revised gratuity ceiling.

Hemendra Vora · June 4, 2017 at 11:30 am

Thanks Bankers’ Club for latest informations for Bankers. Till today no mandate for increase in Gratuity. No Bill passed in Central Government. Now it is time all retired Bankers and other sectors to send emails to government for their rights. I request all the retired employees after 1.1.16 to write mail for demanding increase in Gratuity at the earliest at par with RBI and Central Government employees. Please do this at the earliest. The related unions also requested to take up the matter with government.

M S Mukherjee · June 12, 2017 at 10:18 pm

The effective date for gratuity should be 01/01/2016 retrospectively at per with central govt employees.Authorities should take up the matter sothat banks and other employees may not become prey to delay in implementation of gratuity act.

aniruddha dev roy · July 15, 2017 at 8:04 pm

I wonder whether this deliberated delay in passing the amendment of gratuity act through parliament is a ploy to deprive those retired after January 16 .in earlier case also many retirees were deprived in bank. Unions must ensure that this time it does not happen.

R.K.ANAND · July 21, 2017 at 6:51 pm

I am a retired employye as scale III from a nationalized bank. I fail to understand why Bank employees are not being blessed with the benefit of enhanced as well as tax free gratuity at par with rbi employees .Please guide whether it will be from retrospective effect i,e, from 01/01/2016. I WAS RETIRED IN mARCH 2017. cAN i GET THE ENHANCE GRATUITY BENEFIT IF cENTRAL PASSED THER aMENDMENT aCT NOW IN mONSOON sESSION? yOUR REPLY AND GUIDANCE WILL BE HIGHLY APPRECIATED. dO MAIL ME AT FOLLOWING

Pranab C Roy · August 8, 2017 at 5:06 pm

I gather that there is a proposed bank strike on 22 August 2017. Bank unions/associations have submitted a charter of demands to appropriate authorities.Can any body tell me, if they have included this demand also i.e.gratuity hike to Rs.20 lakh should be immediately implemented w.e.f.01.01.2106 ! Last info coming from unions were in Mar 2017. After this there is complete silence except one odd inquiry by anxious retired bank employee. Does it mean, poor retired employees will be deprived of their legitimate demand which has already been proposed by pay commission and implemented by Central Government for its employees !!!
We feel so help less!
Monsoon session is going on and there is no sign of this bill getting passed in the Parliament/Cabinet Committee..God knows what is the procedure ?

    S.K.Raina · August 10, 2017 at 12:38 am

    As per print media report,the bill for Amendment of Gratuity Amendment Act was to be considered and approved in cabinet meeting on 14th March 2017.The labour ministry had confirmed that the bill for Amendment of Gratuity Act shall be Introduced and passed in Moonsoon session.Half of Moonsoon session of Parliament is already over and the bill is yet to be introduced.Is there any latest information.?Should bank employees retired after 01st January 2016 expect Arrears?

Kiran sirawale · January 19, 2018 at 10:41 pm

I’m ritiring from nationalised bank by July 2018. Can I’m eligible to get gratuity Rs.20 lacs?

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