How many bipartite settlements have happened so far?

There have been 12 Bipartite Settlements in Indian banking, starting from 1966. The latest — 12th Bipartite Settlement — was signed in March 2024 and is effective from 1 November 2022.

What is the effective date of the 12th Bipartite Settlement?

The 12th Bipartite Settlement is effective from 1 November 2022. It was formally signed in March 2024 after prolonged negotiations between IBA and unions including AIBEA, NCBE, BEFI, INBEF, and NOBW.

What is the wage revision percentage in the 12th Bipartite Settlement?

The 12th Bipartite Settlement provides for a wage revision of approximately 17% on the total wage bill, translating to a notional pay load increase for all workmen employees (clerks and sub-staff).

How is DA (Dearness Allowance) calculated for bank employees?

Dearness Allowance for bank employees is linked to the All India Consumer Price Index (AICPI) on base year 1960=100. DA is revised four times a year — February, May, August, and November — based on CPI movement over the previous quarters. A specific number of CPI index points corresponds to a DA slab rate, which is applied to the basic pay to calculate the DA amount.

IBA · Bank Employees12th Settlement — 2022–2024Updated 2026

Bipartite Settlement — Complete Guide

Q: What is the difference between Bipartite Settlement and Joint Note?

Bipartite Settlement covers workmen employees — clerks and sub-staff — and is negotiated between IBA and clerical/sub-staff unions. Joint Note covers officer-cadre employees (Scale I to Scale VII) and is negotiated between IBA and officer unions such as AIBOC, AIBOA, INBOF, and NOBW. Both happen simultaneously and the salary revision percentages are generally aligned.

Q: Is the 12th Bipartite Settlement applicable to private bank employees?

The 12th Bipartite Settlement is directly applicable to public sector banks (PSBs) whose managements are members of IBA and have signed the settlement. Most private sector banks are not IBA members and therefore have their own internal wage structures. However, some older private banks that are IBA members may be covered.

All 12 Settlements · 12th Bipartite Salary Details · DA, HRA, CCA & Pay Scales Explained

The definitive reference for bank employees on Bipartite Settlement — what it is, who it covers, the full history of all 12 settlements (1966–2024), the key changes under the 12th Bipartite Settlement (effective 1 November 2022), and a plain-English explanation of every salary component.

Total Settlements

First Settlement

1966

12th Effective From

1 Nov 2022

12th Wage Load

~17%

What is Bipartite Settlement?

Bipartite Settlement is a wage revision agreement between two parties(hence "bi-partite") in Indian banking:

Party 1 — Management Side

Indian Banks' Association (IBA)

Represents the managements of public sector banks and IBA-member private banks. IBA negotiates on behalf of all member banks collectively — a bank cannot negotiate individually.

Party 2 — Employee Side

Recognised Bank Employees' Unions

Unions representing workmen (clerks and sub-staff): AIBEA, NCBE, BEFI, INBEF, NOBW, and others. A union must be "recognised" by IBA to participate in negotiations.

The settlement determines pay scales, dearness allowance, HRA, CCA, special allowance, leave rules, medical benefits, and all other service conditions for workmen employees for the settlement period (typically 5 years). It is legally binding on all signatory banks and covered employees.

⚠️ Bipartite vs Joint Note — Key Distinction

Bipartite Settlement

Covers: Clerks + Sub-staff (Workmen cadre)

Unions: AIBEA, NCBE, BEFI, INBEF, NOBW

Governing law: Industrial Disputes Act

Joint Note (Officers)

Covers: Scale I to Scale VII Officers

Unions: AIBOC, AIBOA, INBOF, NOBW

Negotiated simultaneously with Bipartite

History of All 12 Bipartite Settlements (1966–2024)

Settlement	Effective Year	Key Highlights
1st	1966	First-ever industry-wide wage agreement; established standardised pay structure across nationalised banks
2nd	1970	Revised basic pay scales; enhanced DA linkage to cost of living index
3rd	1974	Significant pay revision post-oil crisis; improved HRA and CCA structure
4th	1979	Post-nationalisation consolidation; uniform service conditions across public sector banks
5th	1983	Revised pay scales; strengthened leave and medical benefit provisions
6th	1987	Enhanced DA slabs; revision of HRA classification by city population
7th	1992	Major revision post-liberalisation; improved superannuation benefits and LTC
8th	1997	Computerisation allowances introduced; revised pay with technology-era benefits
9th	2002	Merged many allowances into pay; revised NPS provisions for new entrants
10th	2007	Substantial wage increase; special allowance introduced; enhanced gratuity ceiling
11th	2012	Effective Nov 2007; ~17.5% wage load; special allowance made part of pay for PF; stagnation increments improved
12th Latest	2022–24	Effective 1 Nov 2022; signed March 2024; ~17% wage load; five-day banking provisions; enhanced leaves and improved DA mechanism

12th Bipartite Settlement — Complete Details

Effective Date

1 November 2022

Date of Signing

March 2024

Wage Load Increase

~17% on total wage bill

Unions Signatory (Workmen)

AIBEA, NCBE, BEFI, INBEF, NOBW

IBA Mandate Banks

All IBA-member public sector banks

Period Covered

Nov 2022 to Oct 2027

Arrears

From Nov 2022 — paid in instalments by banks

Five-Day Banking

Provisions for 5-day banking week included

Key Changes & Provisions Under 12th Bipartite Settlement

1.Pay scales revised upward across all grades — clerical, sub-staff, and officers (via parallel Joint Note).

2.Dearness Allowance mechanism retained — quarterly revision based on AICPI movement.

3.Special Allowance enhanced and explicitly included in PF/Gratuity computation base.

4.Medical Aid ceiling enhanced for serving employees and retirees.

5.Five-day banking week provisions agreed in principle — implementation subject to government approval.

6.Enhanced ex-gratia for bereaved families of employees who die in harness.

7.Leave encashment provisions improved — higher ceiling on accumulation.

8.Stagnation increment provisions revised — more increments at scale maximum.

9.Arrears payable from 1 November 2022 — banks releasing in phased instalments.

10.Housing loan interest subsidy provisions and staff welfare fund contributions enhanced.

💰 Arrears — What Bank Employees Are Owed

Since the 12th Bipartite Settlement is effective from 1 November 2022 but was signed only in March 2024, employees are entitled to arrears for the entire period (Nov 2022 to the date of actual salary revision). Most PSBs have been releasing these arrears in 2–3 phased instalments as per IBA communication. If you have not received your full arrears, approach your HR department with the IBA circular reference.

Calculate Your 12th Bipartite Salary

Select your cadre, grade, and city — get a grade-wise breakdown of basic, DA, HRA, special allowance, and estimated take-home.

Salary Calculator →

Key Salary Components Under Bipartite Settlement

Every bank employee's salary slip has these components — here is what each means and how it is calculated.

₹

Basic Pay

The core pay component fixed by the settlement. All other allowances and benefits (DA, HRA, PF, gratuity) are calculated as a percentage of or linked to basic pay. Increases with annual increments.

📈

Dearness Allowance (DA)

Revised quarterly (Feb, May, Aug, Nov) based on All India Consumer Price Index (AICPI). Fully neutralises cost-of-living increase. A significant component — often equals or exceeds basic pay in senior scales.

🏠

House Rent Allowance (HRA)

Paid as percentage of basic pay based on city classification. Major cities (Mumbai, Delhi, Chennai, Kolkata): 8.5–9%. Other cities (above 5 lakh population): 7.5%. Smaller centres: 6.5%. Employees in bank quarters get lease rent deducted instead.

⭐

Special Allowance

Introduced in the 10th bipartite settlement. A fixed component (percentage of basic pay) that is part of the pay slip. Counted for PF/gratuity computation under revised provisions.

🏙️

City Compensatory Allowance (CCA)

Additional allowance for employees posted in major cities and specified urban centres. Rate varies by city classification. Employees posted outside specified cities do not receive CCA.

🚌

Transport Allowance

Fixed monthly allowance to cover commuting costs. Rate differs by city category and cadre. Not counted for DA/HRA/PF purposes — it is a standalone reimbursement allowance.

How DA (Dearness Allowance) Works for Bank Employees

Dearness Allowance is the most dynamic component of a bank employee's salary — it changes every quarter. Understanding it helps you predict your salary movement and plan your finances.

CPI Index Basis

DA is linked to the All India Consumer Price Index (AICPI) with base year 1960=100. This is NOT the same CPI used in news (which is base year 2012). The 1960-base CPI captures inflation specifically as relevant to the wage agreements signed historically.

Quarterly Revision Months

DA is revised four times a year — effective February 1, May 1, August 1, and November 1. The revision for a quarter is based on the average CPI of the preceding three months (e.g., November revision is based on average CPI of June–August).

Slab Rate Mechanism

A fixed number of CPI index points = one DA slab. Each slab translates to a fixed percentage of basic pay added as DA. As CPI rises quarter on quarter, new slabs get added. DA can never be reduced — it only increases or stays flat.

Impact on Salary

DA is calculated on basic pay (and special allowance, where applicable under bipartite terms). For senior clerks and officers, DA often exceeds basic pay — making it the largest single component of gross salary.

PF and Gratuity Impact

Under the 12th Bipartite Settlement, PF is contributed on Basic Pay + Special Allowance. DA itself is NOT included for PF computation. However, gratuity is calculated on Basic + DA (last drawn) — so higher DA directly increases gratuity payout on retirement.

Key Benefits & Service Conditions

Provident Fund

10% of (Basic + DA + Special Allowance) contributed by employee; equal contribution by bank. Accumulated with interest until retirement.

Gratuity

15 days' pay per year of completed service. Ceiling raised periodically — under the Payment of Gratuity Act (Government ceiling: ₹20 lakh). Tax-exempt up to the statutory ceiling.

Pension / NPS

Employees who joined after April 1, 2010 are under NPS (National Pension System) — 10% employee + 14% employer contribution. Pre-2010 joiners are under the old Pension Scheme with defined benefits.

Medical Aid

Annual medical reimbursement on production of bills. Enhanced ceiling for self and dependants. Retirees also covered under IBA group mediclaim scheme.

Leave Travel Concession (LTC)

Entitled once in 2 years for travel to any place in India. Fare reimbursed for employee + family (2 dependants). Can be encashed in lieu of travel once in a block.

Sick Leave

480 days accumulated sick leave over entire service. Half-pay leave also available. Unavailed sick leave partly encashable at retirement.

Casual Leave

12 days per year; cannot be accumulated. Privilege leave (PL): 30 days per year with carry-forward; maximum accumulation 240 days.

Stagnation Increments

Employees who reach the maximum of their pay scale are eligible for stagnation increments at regular intervals, so earning does not plateau completely.

HRA Classification — City-wise Rates

City Classification	Population Criteria	HRA Rate	Example Cities
Major 'A' Cities	45 lakh & above	8.5% – 9% of Basic Pay	Mumbai, Delhi, Chennai, Kolkata, Hyderabad, Bengaluru
Area 'B' Cities	5 lakh to 45 lakh	7.5% of Basic Pay	Pune, Ahmedabad, Surat, Jaipur, Lucknow, Kanpur
Other Places	Below 5 lakh / Rural	6.5% of Basic Pay	Smaller towns, semi-urban, and rural centres

* Employees residing in bank-provided quarters have lease rent deducted in lieu of HRA. Refer to IBA circulars for exact applicable rates post-12th Bipartite.

Who is Covered by Bipartite Settlement?

✅ Covered — Clerical Cadre

▸Clerks (all grades/scales)
▸Head Clerks
▸Special Assistants
▸Employees in clerical roles in IBA-member PSBs

✅ Covered — Sub-staff Cadre

▸Peons / Attendants
▸Watchmen / Security Guards (bank-employed)
▸Sweepers
▸Daftari and similar support roles

❌ Not Covered

▸Officers (Scale I–VII) — covered under Joint Note
▸Employees of non-IBA member private banks
▸Contract / outsourced staff
▸Business Correspondents (BCs)

Free Tool

12th Bipartite Salary Calculator

Select your cadre, grade, years of service, and city — get a full breakdown of basic pay, DA for the current quarter, HRA, special allowance, CCA, PF deduction, and estimated take-home. Based on 12th Bipartite Settlement rates.

Calculate My Salary →

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Frequently Asked Questions — Bipartite Settlement

What is Bipartite Settlement in banking?▼

Bipartite Settlement is a wage revision agreement between two parties — the Indian Banks' Association (IBA) representing bank managements, and the recognised bank employees' unions representing workmen (clerks and sub-staff). It determines pay scales, dearness allowance, HRA, CCA, and service conditions for approximately 5 years.

What is the difference between Bipartite Settlement and Joint Note?▼

Bipartite Settlement covers workmen (clerks and sub-staff) — negotiated between IBA and clerical unions. Joint Note covers officer-cadre employees (Scale I to Scale VII) — negotiated between IBA and officer unions (AIBOC, AIBOA, INBOF, NOBW). Both happen simultaneously. Officers are not covered under the bipartite settlement directly.

When is the 12th Bipartite Settlement effective from?▼

The 12th Bipartite Settlement is effective from 1 November 2022. It was signed in March 2024. Arrears are payable from November 2022 — most banks have been releasing these in phased instalments.

How is DA calculated for bank employees?▼

DA is linked to the All India Consumer Price Index (AICPI) on base year 1960=100. Revised four times a year — February, May, August, and November. A fixed number of CPI index points = one DA slab, applied as a percentage of basic pay. As CPI rises, DA increases automatically each quarter.

Is Bipartite Settlement applicable to private bank employees?▼

Bipartite Settlement applies to public sector banks whose managements are IBA members and signatories. Most private sector banks are not IBA members and have their own pay structures. A few older private banks that are IBA members may follow the settlement.

How many Bipartite Settlements have happened in Indian banking?▼

There have been 12 Bipartite Settlements in Indian banking — the first in 1966 and the latest (12th) effective from November 2022 and signed in March 2024.

Does Bipartite Settlement cover NPS benefits?▼

Employees who joined after 1 April 2010 are covered under NPS (National Pension System) — 10% employee contribution + 14% bank contribution. Bipartite Settlement provisions for NPS are governed by the settlement terms and government guidelines. Pre-2010 joiners remain under the Old Pension Scheme.

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