FinMin asks PSBs to complete wage revision process in next 12 months

Public sector banks (PSBs) and financial institutions, including insurance companies revise wages of their employees every five years.

The government has urged public sector banks to start negotiations for the 13th bipartite settlement promptly and conclude them within the next twelve months.

The upcoming wage revision for staff and officers of public sector banks is scheduled to take effect from 1 November 2027.

Public sector banks and related financial entities, such as insurers, normally adjust employee wages every five years. Under this settlement, the Indian Banks’ Association is expected to hold talks with employee unions and reach a mutually acceptable wage agreement.

Because concluding these settlements on schedule is vital for industrial peace, the Department of Financial Services instructed the heads of public sector banks, via a notice, to take the required steps to begin talks on the upcoming wage revision.

The notice, dated 20 April, advises that PSBs should finish the negotiation process within a maximum of twelve months.

Prior to the previous settlement, the finance ministry urged the IBA to make sure that all future wage talks are completed before the next period starts, allowing the new wages to be applied from the effective date.

It has been noted that, in past rounds, changes to the permanent regulations linked to the settlement were often made only after a significant delay.

“Since negotiations for the forthcoming settlement are now getting underway on schedule, it is stressed that any related regulatory amendments should also be finished before the date set for the next wage revision,” the notice added.

It is widely recognised that the banking sector forms the backbone of India’s economy, and providing fair and adequate pay helps keep employee morale high.

Public sector banks posted record profits in FY25 and are anticipated to maintain that growth into FY26. Combined PSB earnings exceeded ₹1 lakh crore, reaching ₹1.05 lakh crore in FY23, then climbing to ₹1.41 lakh crore in FY24, and further to ₹1.78 lakh crore in FY25.

This improvement stems from better asset quality, steady credit growth, ample capital buffers, and an increasing return on assets.

PSB balance sheets keep improving. Gross non‑performing assets fell to a record low of 2.30 % at the end of September 2025, while net NPAs were about 3 %. The provision coverage ratio rose to 94.63 %, and the capital adequacy ratio stayed strong at 15.96 % at the close of the first half of FY26.

Wage‑settlement discussions usually advantage employees of public sector banks, older private‑sector banks, and certain foreign banks.

Published on 26 April 2026