Government banks ordered to complete wage negotiations within 12 months
What's the story
The Indian government has directed public sector banks (PSBs) to kick-start negotiations for the 13th Bi-partite settlement. The wage revision for PSB employees and officers is due from November 1, 2027. The Indian Banks' Association (IBA) is expected to hold talks with employee unions/associations as part of this settlement process, aiming at a mutually acceptable wage agreement.
Timeliness stress
Department of Financial Services issues directive to banks
The Department of Financial Services has stressed the importance of timely wage settlements for industrial harmony. It has advised PSBs to take necessary steps to start negotiations for the upcoming wage revision. The communication, dated April 20, also said that the entire negotiation process should be completed within a maximum period of 12 months.
Directive
Finance Ministry's instructions
Ahead of the last settlement process, the Finance Ministry had directed IBA to ensure all future wage negotiations are finalized before the start of the next period. This is so that wage revisions can be implemented from their due date. The ministry also noted that in previous instances, consequential amendments to permanent regulations have been delayed after settlements.
Significance
Record profits reported by PSBs in FY25
The banking sector is a key pillar of the Indian economy. Healthy and adequate compensation is known to keep employee morale high. Public sector banks have reported record profits in FY25 and are expected to continue this trend in FY26. Combined PSB profits crossed ₹1 lakh crore in FY23, rising to ₹1.41 lakh crore in FY24, and further up to ₹1.78 lakh crore in FY25.