12th Bipartite Settlement Explained: Date, Salary Revisions and Latest Updates

The 12th Bipartite Settlement, finalized on 08 March 2024, marks a significant milestone in the history of India’s banking sector. This agreement, which covers the period from 01 November 2022 to 31 October 2027, brings a series of revisions to salaries, benefits, and other working conditions for bank employees. The settlement, negotiated between the Indian Banks’ Association (IBA) and the United Forum of Bank Unions (UFBU), aims to address the growing concerns of bank employees amidst economic challenges and inflationary pressures.

What is a Bipartite Settlement?

A bipartite settlement is a negotiated agreement between the management of banks and the representatives of employees, typically involving trade unions. These negotiations determine the wages, benefits, and working conditions of employees and are usually revisited every five years. The process involves detailed discussions and negotiations between the Indian Banks’ Association (IBA), representing bank management, and the United Forum of Bank Unions (UFBU), representing bank employees.

12th Bipartite Settlement

The 08 March 2024 agreement under the 12th Bipartite Settlement is a package that addresses the evolving needs of bank employees. By offering substantial salary hikes, enhanced benefits, and new incentives, the settlement sets a positive tone for the future of employment in India’s banking sector. As the industry continues to navigate economic challenges, this settlement provides much-needed stability and assurance to the workforce, ensuring that bank employees remain motivated and well-compensated for their contributions.

12th Bipartite Settlement: Key Highlights

The 12th Bipartite Settlement includes several key revisions that directly impact the compensation and working conditions of bank employees. Some of the key highlights of the 12th Bipartite Settlement have been mentioned below.

1. • The settlement has brought about a 17% increase in the basic pay of bank employees. This revision is effective from 01 November 2022 and will be reflected in the paychecks starting from March 2024, with arrears being disbursed for the period between November 2022 and February 2024.
   • The basic pay across various scales has been revised to make the compensation more competitive. The revised pay scales are expected to benefit all levels of employees, from clerks to officers, ensuring that salaries are aligned with inflation and cost-of-living adjustments.
   •  A new Performance-Linked Incentive (PLI) scheme has been introduced as part of the settlement. This scheme is designed to reward employees based on their performance, linking a portion of their compensation to the achievement of individual and organizational targets. The PLI will be paid out annually, with the first payout scheduled for April 2025.
   • One of the most significant outcomes of the settlement is the revision of pension benefits. Employees who retired after 01 November 2022, will receive a higher pension, reflecting the revised pay scales. Additionally, a one-time special pension adjustment will be provided to retirees who have been drawing pensions for over 10 years.
   • The family pension has also been enhanced, with the maximum ceiling raised to 30% of the last drawn salary, benefiting the dependents of deceased employees.
   •  Employees working in metro cities and other high-cost locations will receive enhanced location-based allowances. This adjustment recognizes the higher living costs in these areas.
   •  The settlement has also improved housing loan limits and medical reimbursement policies, offering better support for employees’ housing and healthcare needs
   • Recognizing the growing need for work-life balance, the settlement has introduced several initiatives aimed at reducing stress and improving the overall well-being of employees. These include flexible working hours, more holidays, and better leave policies, including enhanced maternity and paternity leave provisions.

12th Bipartite Settlement: Implementation Timeline and Arrears

The salary revisions and other benefits outlined in the 12th Bipartite Settlement are effective from 01 November 2022. However, due to the timing of the settlement’s finalization, the revised salaries and benefits have been reflected in the March 2024 paychecks. Arrears for the period between November 2022 and February 2024 will be disbursed in a phased manner.

12th Bipartite Settlement: Industry Impact and Reactions

The 12th Bipartite Settlement has been welcomed by bank employees across the country. The UFBU has expressed satisfaction with the outcome, noting that the agreement addresses many of the long-standing demands of the workforce. The IBA, on the other hand, has highlighted the settlement’s balanced approach, which takes into account the financial health of banks while ensuring fair compensation for employees.

Industry experts believe that the introduction of performance-linked incentives and the enhancement of pension benefits will have a positive impact on employee morale and productivity. The settlement is also expected to help banks attract and retain talent in a highly competitive job market.