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11th Bipartite Settlement- 15% Salary Hike for Bank Employees & PLI Introduced; New Salary Structure for IBPS, SBI

Rupali Pruthi

Bank Salary Hike: Indian Banks’ Association (IBA) and United Forum of Bank Unions (UBFU) have agreed to provide 15% salary hike to bank employees and staff under the new settlement under 11th bipartite agreement. The agreement paves the way for the resolution of 3-year long issue of salary revision. With this, around 8.5 lakh bank employees will get benefitted and will get arrears with effect from 1st November 2017. Along with increase in salary, Performance-Linked Incentive (PLI) is also being introduced in public sector banks for first time ever. In this article, we have shared below the how salary hike will impact the wages of the employees along with the new salary structure of bank employees recruited through IBPS, SBI, RBI and other banks. Also, know what does performance-linked incentive mean for banking sector. Have a look at the important questions given below in terms of salary hike in banking sector and know their answers. These questions are provided to clear your doubts in terms of salary of bank employees.

Who will be benefitted through this salary hike in banking sector?

This salary hike will benefit the employees of public sector banks, old private banks and foreign banks who have signed the salary hike agreement. A total of 37 banks have signed this settlement agreement. Of these, 11 are public sector banks, 12 are private banks and 7 are foreign banks.

What is Performance-Linked Incentive?

For the first time, the Performance-Linked Incentive (PLI) is being introduced in 11 public sector banks under the 11th bipartite agreement to encourage bank employees perform better in this competitive scenario. The Incentive will be based on the operating profit or net profit of individual bank.

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The PLI is paid to employees on the basis of annual performance of bank and percentage increase in year-on-year profits of a firm or bank. It is payable to all employees in addition to the salary as an annual increment. For private banks and foreign banks, it will be optional to provide this incentive to employees.

How to calculate Performance-Linked Incentive (PLI)?

Have a look at the situations under which the PLI will be calculated:


Status of PLI

Year-on-Year Growth of company is less than 5%


Year-on-Year Growth of company is between 5%-10%

5 Days salary given as PLI

Year-on-Year Growth of company is between 10%-15%

10 Days salary given as PLI

Year-on-Year Growth of company is above 15%

15 Days salary given as PLI

What is PLI Calculation Formula?

Have a look at how PLI will be calculated:

For example, the Establishment expenses of XYZ bank  on March 31, 2019 is Rs 100 with 50 employees:

Establishment Expense: Rs 100

Establishment Expense for 10 Days : 100/365 * 10 = 2.73

Increment for 50 employees: 2.73 / 50 =  0.0546

Gross Salary with PLI (Annual Increment): Rs 100 + (Rs 100 X 0.0546) - Rs 105.46 - (If Gross salary is Rs 100)

Other Allowances & Perks under 11th Bipartite Agreement

The 11th Bipartite Agreement has introduced some other allowances and perks for the bank employees. These are:

NPS & DA: Banking sector will increase its contribution to the National Pension Scheme (NPS) to 14% of the salary and Dearness Allowance (DA) from 10%. However, this is subject to the government approval.

Leave encashment: Under the 11th Bipartite Agreement, bank employees will be allowed to encash maximum 5 paid leaves in a year during a festival of their own choice. However, employees who are above 55 years can encash up to 7 paid leaves. Earlier, employees were able to encash leaves only at the time of retirement.

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