Archive · 8 Sep 2026
Government Holds Public Bank Incentive Scheme Ahead of Strike
The government has temporarily stopped a bonus plan for public-sector bank workers.
The bonus was linked to how well people or their banks performed.
Senior officers could have received much more money than junior workers under the plan.
Bank unions said this was unfair and asked for the plan to be changed.
The government met some bank employees and agreed to discuss the issue again.
The talks will happen during larger negotiations about pay and working conditions.
The unions are also asking for a five-day banking week and changes to pension and other service issues.
They have called strikes in September and may hold a longer strike in October if the disagreements continue.
The government has put the 2025-26 performance-linked incentive scheme for public-sector bank employees and executives on hold.
The decision followed Finance Minister Nirmala Sitharaman’s meeting with bank employees led by the Bharatiya Mazdoor Sangh.
The scheme will be reconsidered during ongoing bipartite settlement and joint-note discussions on wages and service conditions.
Unions oppose higher individual-performance incentives for Scale IV and above, compared with the lower maximum for employees and officers up to Scale III.
The United Forum of Bank Unions has called strikes on September 11 and September 28-30, and threatened an indefinite strike from October 26.
- Who
- The Department of Financial Services, public-sector bank employees and executives, the United Forum of Bank Unions, and Finance Minister Nirmala Sitharaman are involved.
- What
- Implementation of the performance-linked incentive scheme for 2025-26 has been kept in abeyance pending further discussions.
- When
- The decision was communicated in a September 7 letter and reported ahead of the September 11 nationwide strike.
- Where
- The decision applies to public-sector banks in India; the letter was sent to State Bank of India and nationalised banks.
- Why
- Bank employees sought changes to the incentive structure and other employment-related issues, including a five-day banking week and pension-related demands.
Government Position
Union Position
Status of the incentive scheme
Government Position
The government has paused implementation and plans to consider the matter during broader bipartite settlement and joint-note discussions.
Union Position
Bank unions want the framework withdrawn or revised, arguing that it unfairly favours senior officers.
How incentives should be calculated
Government Position
The government framework allows larger incentives for Scale IV and above based on individual performance, with a maximum of 365 days of basic pay.
Union Position
Unions say incentives should be linked to the overall performance of each bank and follow a common structure for employees and officers through Scale VII.
Five-day banking week
Government Position
The proposed five-day banking week has not received government approval.
Union Position
Unions say the Indian Banks’ Association agreed to the arrangement in the March 2024 settlement and are demanding its implementation.
- Scheme status
- The performance-linked incentive scheme for 2025-26 is on hold until further orders.
- Relevant scheme
- The scheme was issued by the government on November 19, 2024.
- Senior-officer maximum
- Officers in Scale IV and above could receive up to 365 days of basic pay based on individual performance.
- Lower-level maximum
- Workmen and officers up to Scale III could receive up to 15 days of basic pay plus dearness allowance.
- Negotiation forum
- The issue will be considered during ongoing 13th Bipartite Settlement and 10th Joint Note discussions.
- Strike schedule
- The United Forum of Bank Unions has called action for September 11 and September 28-30, and threatened an indefinite strike from October 26.
- Five-day week proposal
- Unions say the Indian Banks’ Association agreed to a five-day banking week in March 2024, but government approval remains pending.
