Bank unions strike: Around 8 lakh employees to agitate over 5-day working week, PLI scheme, pension issues

A fresh confrontation is building in the banking sector, with the United Forum of Bank Unions announcing a phased nationwide agitation over what it says are long-pending issues tied to earlier agreements. In a press statement issued on Monday, the UFBU said it will hold an all-India strike on 11 September, a three-day strike from 28 to 30 September and an indefinite strike from 26 October over the delay in implementing a five-day working week, opposition to the government’s revised performance-linked incentive scheme for senior bank officers, and unresolved pension and service-related issues.

The move comes more than two years after the industry’s last wage settlement between the Indian Banks’ Association and bank unions. The 12th Bipartite Settlement for workmen and the 9th Joint Note for officers were signed on 8 March 2024, with effect from November 2022 for five years. The settlement provided for a 17% increase in the salary and allowances bill, with the annual outgo for public sector banks estimated at ₹12,449 crore, and covered around eight lakh bank employees and officers.

5-day banking proposal still awaits clearance

One of the main issues is the introduction of a five-day working week, which still requires government approval. The IBA and the unions had reached an understanding on 7 December 2023 to recommend that all Saturdays be declared holidays for the banking industry. The settlement signed on 8 March 2024 recorded that the IBA had recommended the proposal to the government and that revised working hours would take effect after government approval and the necessary clearances.

Under the proposed arrangement, banks would remain closed on all Saturdays, while daily working hours from Monday to Friday would be increased by about 40 minutes. The proposal is intended to maintain the overall working hours of bank employees. At present, only the second and fourth Saturdays are bank holidays. The required approval and regulatory clearances are still awaited.

PLI dispute moves into legal and industrial-relations process

The other major point of dispute is the performance-linked incentive scheme. Under the framework negotiated as part of the 11th Bipartite Settlement and 8th Joint Note in 2020, the incentive was linked to the overall performance of the bank and was available uniformly to employees and officers up to Scale VII, with a maximum of 15 days’ basic pay plus dearness allowance. The UFBU has said this arrangement formed part of the bilateral wage settlement and service conditions negotiated with the IBA.

The Department of Financial Services, however, introduced a revised PLI framework in November 2024 for whole-time directors and senior executives from Scale IV to Scale VIII in public sector banks. According to the government’s description of the scheme, performance is assessed on parameters including efficiency, business, asset quality and financial inclusion, and combines the bank’s overall performance with individual performance. The maximum ceiling is linked to annual basic pay, with the ceiling fixed at 70% for Scale IV, 80% for Scale V and VI, and 90% for Scales VII and VIII. For managing directors and executive directors, the ceiling can go up to 100% of annual basic pay.

The UFBU has opposed the revised framework, saying it was introduced without bilateral negotiations and replaces the earlier uniform, bank-linked incentive for senior officers with individual performance-based payouts. The government has said the changes are intended to reward senior executives and improve productivity and competitiveness in public sector banks.

According to the All India Bank Employees Association, the matter is under conciliation before the Chief Labour Commissioner, with the unions arguing that banks should maintain status quo while the proceedings are pending. The unions have also challenged the implementation of the DFS framework in the Delhi High Court. In August 2026, the IBA and the UFBU held another meeting on the issue, with the union reiterating that it was willing to discuss modifications to the existing framework and arrive at an amicable solution.

Pension, service-related issues remain unresolved

The third part of the present agitation concerns residual issues left unresolved after the 12th Bipartite Settlement and the 9th Joint Note. When the 2024 settlement was concluded, the IBA and the unions agreed that several demands that could not be settled during the main negotiations would be discussed further, to reach a mutually acceptable and amicable settlement within six months. These included pension updates, improvements in the pension scheme, medical insurance changes, a uniform dearness allowance formula for pensioners and other service-related matters.

Among the most important of these is pension updation for past retirees. The unions have sought provisions in the pension regulations for periodic updation of pension alongside future wage settlements. They have also sought improvements in the pension scheme and a uniform DA formula for pensioners linked to the 8088-point index. These issues have remained part of the wider residual-issues discussions since the 2024 settlement.

The unions have also sought an option for employees covered by the National Pension System to move to the Old Pension Scheme. This demand has been raised separately by bank officers’ organisations and remains part of the broader set of demands concerning retirement benefits and service conditions. The unions have also raised issues related to medical insurance and other employee benefits.

Unions say demands arise from existing agreements

The UFBU has maintained that the five-day banking and PLI issues are not fresh demands, but matters arising from existing agreements or established bilateral arrangements. The five-day week was recorded in the 2024 settlement subject to government approval, while the unions contend that the earlier PLI framework was part of negotiated service conditions. The pension and welfare demands were also specifically identified for further bilateral discussion after the March 2024 settlement.

The wage settlement itself followed a memorandum of understanding signed between the IBA and the unions on 7 December 2023. The parties had aimed to conclude the final bipartite settlement within 180 days. The 12th Bipartite Settlement and the 9th Joint Note were eventually signed on 8 March 2024. The agreement took effect from 1 November 2022 and became the latest five-year wage settlement for the industry.

Phased agitation announced

The current confrontation marks an escalation of disputes that have continued after the 2024 wage settlement. The UFBU is seeking implementation of the five-day banking commitment, withdrawal or modification of the revised PLI framework through bilateral negotiations, and resolution of the residual pension and service-related issues. The unions have now linked these demands to a phased agitation that will culminate in an indefinite strike from 26 October if the issues remain unresolved.