Dearness allowance for bank employees will be 15.97% for May, June and July 2024. In a circular dated June 10, 2024, the Indian Bank’s Association (IBA) said, “In terms of clause 13 of the 12th Bipartite Settlement dated 08.03.2024 and clause 2 (i) of the Joint Note dated 08.03.2024, the rate of Dearness Allowance payable to Workmen and Officer employees for the months of May, June & July 2024 shall be 15.97% ‘of ‘pay’ (0.01 % change in DA on ‘pay’ for change in every second decimal place of CPI 2016 over 123.03 points).”
How is DA calculated for bank employees? New DA calculation explained
Explaining the rationale behind the latest dearness allowance hike, IBA said, “The confirmed All India Consumer Price Index for Industrial Workers (Base 2016= 100) for the quarter ended March 2024 are as follows:January 2024 – 138.9
February 2024 – 139.2
March 2024 – 138.9
The average CPI of the above is 139 and accordingly, the number of points over 123.03 is 15.97 (139-123.03) The last average quarterly CPI was 138.76. Hence, there is an increase of 0.24 points for May, June, and July 2024.”
Do keep in mind that dearness relief on a pension of the bank employees calculated based on the above-mentioned formula will be paid half-yearly for a rise or fall over 123.03 points in the quarterly average of the All-India Consumer Price Index for Industrial Workers Base 2016=100, according to the 9th Joint Note on Officers’ Wage Revision dated March 8, 2024.
The joint note also announced the construction of a new pay scale for the employees of the public sector banks after merging DA corresponding to 8088 points and additional load. “With the applicable load of 3.22%, the effective load on the basic pay post-merger of dearness allowance at 30.38% is 4.20%,” according to the joint note.
It also mentioned that the conversion factor after the merger of dearness allowances has been set at 0.0549. “Instead of being rounded off to 0.05, it is raised to 0.06 extending benefit to serving and retired officers,” it added. Further, the “index for dearness allowance is shifted from 1960=100 series to 2016=100 series resulting in shifting the conversion factor from 0.06 to 0.99 as per 2016=100 series benefitting the officers with enhanced dearness allowance. The factor of 0.99 as per the 2016=100 series is converted to 1.00 improving the dearness allowance further.”
According to the new rules, there will be additional benefits in percentage terms in dearness allowance. “The dearness allowance shall be payable as 1.00 % of ‘pay’ per percentage point of index. The DA in the above manner shall be paid for every variation of rise or fall over 123.03 points in the quarterly average of the All India Consumer Price Index for Industrial Workers Base 2016=100. 0.01% change in DA on ‘pay’ for change in every second decimal place of CPI 2016 over 123.03 points.”
Salary hike for bank employees
In March 2024, the employees of the public sector banks (PSU) got a salary hike of 17%. As per the 9th Joint Note on Officers’ Wage Revision, “The total quantum of wage revision increase (pay slip component) is more than Rs 8,284 crores being the 17% of the cost of pay slip component of establishment expenses of public sector banks.”
The joint note added, “Officers who have completed CAIIB (CAIIB Part-II) shall be eligible for two increments w.e.f 01.11.2022.” It further said, “The new scales of pay ranges from Rs. 48480/- to Rs.173860/- covering all the scales from Scale I to VII, with effect from 01.11.2022.”
Latest update on a 5-day work week for bank employees
Five-day workweek has been a long-standing demand of the bank employees. According to the joint note in March 2024, it “recognises all Saturdays as holidays, pending government notification. The revised working hours will be effective after notification by the government.” As of now, the Indian Banks’ Association (IBA) and bank unions have reached an agreement on this proposal, but governmental approval is pending.
To accommodate the shortened workweek, the daily working hours of PSU banks are likely to increase, according to various reports. At present, bank employees work from 9:45 am to 5:30 pm. This adjustment ensures that reducing the number of working days does not adversely impact customer service hours. The Reserve Bank of India (RBI) mandates certain minimum working hours and customer service hours that banks must adhere to. The inputs from the central bank will play a crucial role in deciding whether PSU banks can work five days a week.
