PLI Dispute for Scale IV+ Bank Officers — DFS Scheme, AIBOC’s Court Case & Latest Update (2026)
Last updated: June 30, 2026
Most public sector bank employees got their Performance Linked Incentive (PLI) for FY 2024-25 without controversy — a payout of 5 to 15 days’ Basic Pay + DA, decided under the formula negotiated in the 12th Bipartite Settlement. But for officers in Scale IV and above, the picture is very different. A separate, government-issued formula tied to a percentage of annual basic pay — reported as high as 70-100% for senior scales — has triggered union opposition, a Delhi High Court case, and a conditional strike threat that is still live.
This is one of the more confusing banking-sector disputes running in parallel with the 13th Bipartite Settlement and 5-day banking demand. Here is what the PLI dispute for Scale IV and above officers actually involves, where the court case stands, and what it means if you are a serving officer waiting to know whether you will get paid — and how much.
Dispute: DFS-prescribed PLI formula for Scale IV and above officers pays a graded percentage of annual basic pay (reported ~70% at Scale IV up to 100% for EDs/MDs/DMDs) — far above the 5-15 days’ Basic+DA formula negotiated for everyone else under the 12th BPS/9th Joint Note · Challenged by: AIBOC, in the Delhi High Court · Court status: No stay granted (hearings 30 Mar & 1 Apr 2026); next hearing 6 October 2026 · Union stance: Conditional strike threat if the scheme is pushed through unilaterally; agitation currently on hold · Status as of June 2026: Not broadly implemented — under conciliation before the Chief Labour Commissioner
- June 29, 2026 — UFBU Circular No. UFBU/2026/15 confirms there is “no indication” the revised PLI scheme will be implemented in a hurry. UFBU has put its agitation programmes on hold but kept the conditional strike threat in place, and is separately pushing IBA/DFS to pay Scale IV+ officers PLI under the existing BPS formula for both FY 2024-25 and FY 2025-26 so they are not left without any payout while the case is pending.
- April 1, 2026 — Delhi High Court hears the case again; declines to grant a stay on the scheme.
- March 30, 2026 — AIBOC’s writ petition first listed for hearing in the Delhi High Court.
- March 20, 2026 — UFBU Circular No. UFBU/2026/11 warns of an “instant strike within 24 hours” if the revised scheme is implemented for Scale IV and above in violation of the BPS/Joint Note.
- March 18, 2026 — DFS issues a formal letter directing banks to credit PLI: the standard 5-15 day formula for staff up to Scale III, and the separate percentage-of-basic-pay formula for Scale IV and above. At least one bank (Punjab National Bank) credits the payout to its top executives shortly after.
- March 9, 2026 — PLI for Scale IV-VII officers for FY 2024-25 taken up in conciliation proceedings before the Chief Labour Commissioner (Central).
Last updated: June 30, 2026
What Is PLI (Performance Linked Incentive) in Banks?
Performance Linked Incentive is a variable, once-a-year payout to public sector bank employees, tied to how well their bank performed against a set of agreed business and profitability parameters in that financial year. It was introduced for the first time with the 11th Bipartite Settlement, effective from 1 November 2017, as a first-of-its-kind incentive for state-owned banks — before that, PSU bank pay packets carried no profit-linked variable component at all.
PLI is separate from the annual increment and Dearness Allowance revisions that come from the bipartite settlement’s basic pay structure. It is paid as a number of days of Basic Pay + DA, with the exact number of days decided each year based on the bank’s performance — it is not a fixed, guaranteed amount.
The Negotiated PLI Formula — 12th BPS / 9th Joint Note
Under the 12th Bipartite Settlement and 9th Joint Note (signed 8 March 2024), IBA and unions agreed on a revised PLI matrix. Each bank picks 5 of 8 possible parameters every year based on its own priorities, scores its performance against them, and the combined marks decide the payout — ranging from 5 to 15 days’ Basic Pay + DA.
| Parameter (banks choose any 5 of 8) | What it Measures |
|---|---|
| CASA deposit growth | Increase in low-cost current/savings deposits |
| Non-interest income | Fee-based and other non-lending income |
| Total business growth | Combined deposits + advances growth |
| Profitability | Operating / net profit growth |
| ROA / ROE | Return on assets / return on equity |
| Government scheme performance | PMJDY, PMSBY, PMJJBY, and similar scheme targets |
| SMA account control | Special Mention Account (early-stress loan) levels |
| NPA reduction | Recovery and reduction of non-performing assets |
This formula was meant to apply uniformly — from workmen staff right through to the officer cadre. That uniformity is exactly what the new DFS scheme breaks.
What Changed — DFS’s Separate Scheme for Scale IV and Above
The Department of Financial Services (DFS), Ministry of Finance, directed public sector banks to move away from the negotiated 5-15 day formula for officers in Scale IV and above — covering Scale IV through Scale VII (and equivalent senior grades, including Executive Directors, Managing Directors, and Deputy Managing Directors), with Scale IV-VIII used at SBI given its different grade structure. Instead of days of Basic+DA, these officers are to be paid PLI as a graded percentage of their annual basic pay, tied to individual performance rather than the bank-wide matrix used for everyone else.
A formal DFS letter dated 18 March 2026 instructed banks to credit this payout for FY 2024-25. Punjab National Bank’s board approved and credited the new-formula PLI to its top executives shortly after — reported figures for its seven senior-most executives ranged from roughly ₹46,000 to over ₹21.5 lakh each, with the bank’s MD & EDs collectively paid more than ₹1 crore in PLI (source: HelloBanker, 26 Mar 2026). The percentage structure reported at PNB illustrates the scale of the gap with the standard formula:
| Cadre | PLI Formula |
|---|---|
| Workmen & Officers, Scale I–III | 5–15 days’ Basic Pay + DA (negotiated 12th BPS formula) |
| Scale IV | Reported up to ~70% of annual basic pay |
| Scale V–VI | Reported up to ~80% of annual basic pay |
| Scale VII | Reported up to ~90% of annual basic pay |
| EDs / MDs / DMDs | Reported up to 100% of annual basic pay |
Percentages and rupee amounts as reported for Punjab National Bank’s implementation (HelloBanker, 26 Mar 2026); the exact ceiling can vary by bank since each PSU bank’s board approves its own payout within the DFS-prescribed structure.
Complete Timeline — From DFS Directive to the Delhi High Court Case
IBA and unions agree on the revised, uniform PLI matrix — 5 to 15 days’ Basic+DA based on 5 of 8 performance parameters, applicable across cadres.
A government directive first floats a distinct, individual-performance-linked incentive structure for senior PSU bank executives, separate from the BPS-negotiated formula.
Payment of PLI to Scale IV-VII officers for FY 2024-25, under the existing BPS formula, is taken up as a live issue in conciliation proceedings.
DFS formally instructs PSU banks to pay PLI for FY 2024-25: the standard 5-15 day formula up to Scale III, and the separate percentage-of-basic-pay formula for Scale IV and above. PNB’s board approves and credits its top executives shortly after.
UFBU Circular No. UFBU/2026/11 calls the scheme “unilateral and divisive” and warns of a strike within 24 hours if it is implemented for Scale IV and above in violation of the BPS/Joint Note.
AIBOC’s writ petition against the scheme is heard. The Delhi High Court declines to grant a stay on the scheme at this stage. IBA subsequently asks banks to confirm the status of PLI payments to Scale IV-VII officers.
UFBU Circular No. UFBU/2026/15 notes there is no sign of the scheme being pushed through broadly. Agitational programmes are put on hold, but the conditional strike threat stays in place. UFBU separately asks IBA/DFS to pay Scale IV+ officers PLI under the existing BPS formula for FY 2024-25 and FY 2025-26.
The case returns to court. No interim relief has been granted to either side as of June 2026; the underlying dispute remains unresolved.
Why Unions Call the Scheme “Discriminatory”
- Bypasses bipartite negotiation: PLI has historically been agreed jointly by IBA and unions as part of the bipartite settlement. The new scheme was introduced by government directive, without negotiation with the unions.
- Breaks internal pay parity: A Scale IV officer earning up to 70% of basic pay as PLI, against a Scale III officer capped at 15 days, creates a steep jump in take-home pay that does not track seniority or workload proportionally — unions argue it is a step change, not a graded scale.
- Implemented while sub judice: UFBU’s strongest objection is procedural: the matter was already under conciliation before the Chief Labour Commissioner when DFS directed banks to go ahead and pay, which the union called “wholly inconsistent” with ongoing industrial relations process.
- Sets a precedent for individual-linked pay: Unions are wary that tying senior officers’ incentive to individual performance, rather than collective/bank-wide metrics, could be a template the government extends further down the cadre in future settlements.
The AIBOC Delhi High Court Case
AIBOC (All India Bank Officers’ Confederation), the largest officers’ union within UFBU, filed a writ petition in the Delhi High Court challenging the new PLI scheme as discriminatory and inconsistent with the negotiated settlement framework. The petition was first listed for hearing on 30 March 2026, and heard again on 1 April 2026, when the court declined to grant a stay on the scheme. Following that hearing, IBA reportedly sought confirmation from banks on whether PLI payments to Scale IV-VII officers had actually been credited, given the case was sub judice.
As of June 2026, no stay has been granted and no final ruling has been delivered. The matter is listed for its next hearing on 6 October 2026. UFBU’s June 29 circular notes that its “arguments have been well placed and well-heard by the Court,” but there is no indication of how the court will rule, or whether the revised scheme will be implemented more broadly before then.
UFBU’s Strike Threat — Conditional, Not Declared
It is worth being precise about what UFBU has actually threatened. In its 20 March 2026 circular, UFBU said it would call for an “instant strike within 24 hours” if the government or any bank went ahead and implemented the revised PLI scheme for Scale IV and above — not a strike that has already been called or scheduled. Since banks largely have not pushed the rollout further while the case is in court, UFBU’s 29 June circular confirms it has put its broader agitation programmes on hold for the present. The 24-hour strike trigger remains armed: if there is any fresh attempt to implement the scheme, UFBU says it will resort to immediate strike action without further notice.
Latest Development — UFBU Circular, 29 June 2026
UFBU’s most recent circular (No. UFBU/2026/15) adds an important nuance often missed in coverage of this dispute: the union is not simply demanding that Scale IV and above officers get no PLI. It is pursuing two tracks at once — opposing the inflated, unilateral percentage-of-basic-pay scheme through the court case and conciliation, while separately asking DFS and IBA to ensure these officers are paid PLI under the existing, negotiated BPS formula for both FY 2024-25 and FY 2025-26, so they are not left without any incentive payout purely because the larger dispute is unresolved. UFBU also told IBA it is open to discussing modifications to the PLI scheme going forward.
What This Means for Bank Officers
Whether you receive the higher, percentage-based PLI depends on your bank’s board and how far it has acted on the DFS directive — PNB has credited its top executives; broader, bank-wide rollout to all Scale IV-VII officers does not appear to have followed uniformly as of June 2026, given the ongoing court case. If your bank has not paid you any PLI at all (neither the old formula nor the new one) for FY 2024-25, that is consistent with the current standoff — UFBU’s push to get you paid under the old formula in the meantime has not yet been confirmed as implemented.
You are not directly affected by this dispute. The negotiated 5-15 day Basic+DA formula under the 12th BPS/9th Joint Note continues to apply to you, and per the DFS’s own March 2026 letter, banks were directed to credit this payout for FY 2024-25 separately from the Scale IV+ controversy.
Reality Check — Facts vs Rumours
- ✓ TRUE: A separate, higher PLI formula for Scale IV and above officers was directed by DFS in March 2026, distinct from the 5-15 day formula for everyone else.
- ✓ TRUE: AIBOC has an active writ petition in the Delhi High Court against the scheme; the court has not granted a stay; next hearing is 6 October 2026.
- ✓ TRUE: UFBU has threatened an immediate strike if the scheme is pushed through unilaterally, though no strike has been called as of June 2026.
- ✗ FALSE: The new PLI scheme has been struck down or stayed by the court — no such order exists as of June 2026.
- ✗ FALSE: Scale IV and above officers are guaranteed to lose their PLI entirely — UFBU is actively pushing for them to be paid under the existing formula while the dispute continues.
- ✗ FALSE: This dispute affects Scale I-III officers and workmen staff — their PLI follows the unchanged, negotiated BPS formula.
What to Expect Going Forward
This dispute is now tied to a fixed date: the 6 October 2026 Delhi High Court hearing. Until then, expect a standoff rather than resolution — banks are unlikely to aggressively roll out the new scheme across all Scale IV-VII officers while the case is live, and UFBU is unlikely to escalate to a strike unless that changes. Watch for three things: any further bank-by-bank implementation of the percentage-based PLI (which could trigger UFBU’s 24-hour strike clause), any movement on paying Scale IV+ officers under the old formula for FY 2024-25/25-26 in the interim, and the eventual High Court ruling on whether the DFS directive can stand as issued.
This dispute is also likely to feed into the upcoming 13th Bipartite Settlement negotiations, where unions are expected to push for PLI to be brought back fully within the bipartite, negotiated framework for all cadres — closing off the possibility of future government-directed, off-settlement incentive structures.
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Disclaimer: Information in this article is based on official UFBU circulars (including No. UFBU/2026/11 dated 20 March 2026 and No. UFBU/2026/15 dated 29 June 2026), news reports, and verified sources as of June 2026. Bank-specific figures (e.g. Punjab National Bank) are illustrative of the reported formula and may not apply uniformly across all public sector banks. The Delhi High Court case is ongoing and no final ruling has been delivered. For the latest, visit the IBA official website. Updated: June 2026.
What is the PLI dispute for Scale IV and above bank officers?
In March 2026, the Department of Financial Services (DFS) directed public sector banks to pay officers in Scale IV and above a Performance Linked Incentive based on a graded percentage of their annual basic pay (reported as roughly 70% at Scale IV, rising to 100% for EDs/MDs/DMDs) — separate from the 5-15 day Basic+DA formula negotiated for everyone else under the 12th Bipartite Settlement. Bank unions, led by AIBOC, call this unilateral and discriminatory, and have challenged it in the Delhi High Court.
Has the new PLI scheme for Scale IV+ officers been implemented?
Partially, and not uniformly. Punjab National Bank’s board approved and credited the new-formula PLI to its top executives shortly after a DFS letter dated 18 March 2026. However, broader implementation across all Scale IV-VII officers at all public sector banks does not appear to have followed uniformly, given the ongoing Delhi High Court case and ongoing conciliation proceedings. As of June 2026, UFBU says there is no indication the scheme will be pushed through broadly in the near term.
What is the status of the AIBOC court case against the PLI scheme?
AIBOC filed a writ petition in the Delhi High Court challenging the DFS-directed PLI scheme for Scale IV and above officers. The case was heard on 30 March 2026 and again on 1 April 2026, when the court declined to grant a stay. No final ruling has been delivered as of June 2026. The case is next listed for hearing on 6 October 2026.
Will bank unions go on strike over the PLI issue?
Not immediately. UFBU has threatened an “instant strike within 24 hours” if the government or any bank implements the revised PLI scheme for Scale IV and above officers, but as of its 29 June 2026 circular, UFBU has put its broader agitation programmes on hold because there is no sign of the scheme being pushed through further for now. The strike threat remains conditional and would be triggered only by a fresh implementation attempt.
Will Scale IV and above officers get any PLI while the dispute is unresolved?
That is UFBU’s current ask, not a confirmed outcome. Per its 29 June 2026 circular, UFBU is pushing DFS and IBA to pay Scale IV and above officers PLI under the existing, negotiated BPS formula (5-15 days’ Basic+DA) for both FY 2024-25 and FY 2025-26, so they are not left without any incentive payout while the larger dispute over the higher, percentage-based formula remains in court and conciliation. This has not been confirmed as implemented across banks.
Does the PLI dispute affect Scale I to III officers and workmen staff?
No. Officers up to Scale III and workmen staff continue to be covered by the negotiated 5-15 day Basic+DA PLI formula from the 12th Bipartite Settlement/9th Joint Note, which DFS’s own March 2026 letter explicitly preserved for this group. The dispute is specific to the separate, higher-percentage formula introduced for Scale IV and above.