Summary of this article
Dearness allowance for public sector bank employees has been raised from 25 per cent to 25.70 per cent for the May–July 2026 quarter.
The inflation-linked hike will marginally lift monthly payouts across all scales.
DA is calculated on basic pay plus certain allowances.
Dearness Allowance (DA) for bank employees has been hiked for the May to July 2026 quarter, albeit nominally. The much-awaited inflation-linked allowance has been increased by a mere 0.70 per cent, from the current 25 per cent to 25.70 per cent for the said quarter. Unlike central and state government employees, for whom DA is hiked semi-annually, it is hiked quarterly for bank employees. The Indian Bank’s Association (IBA) reviews the inflation index and determines the DA for every quarter, which applies to the public sector employees.
As the DA is calculated on the basic pay, every slight increase in it directly affects the payout.
As per the IBA-approved 12th Bipartite settlement, effective November 1, 2022, there are seven designation-based salary brackets (Scales) in the public sector bank. These include:
• Scale I (probationary officer)
• Scale II (manager)
• Scale III (senior manager)
• Scale IV (chief manager)
• Scale V (assistant chief manager)
• Scale VI (deputy chief manager)
• Scale VII (general manager)
• Scale VIII (chief general manager)
Depending on one’s scale and the stage (salary progression level), the monthly payout will increase. The scale ranges from Rs 48,480 to Rs 1,73,860, covering all the scales from Scale I to VII.
They also get a special allowance as a percentage of basic pay. This varies based on one’s Scale. For example, a Scale I employee, it is 26.50 per cent effective November 1, 2022. For Scale II and III, 28.30 per cent, for Scale IV and V, it is 30.50 per cent, and for Scale VI and VII, it is 31.59 per cent. In addition to it, a fixed learning allowance of Rs 850, if given, is included for calculating the DA.
For example, for a Scale I employee at stage I, at a basic pay of Rs 48,480, the special allowance comes out to be Rs 12,847.20, and the fixed learning allowance is Rs 850, and based on that, the DA at present (25 per cent) comes out to be Rs 15,544. After the revision, the DA will increase to Rs 15,980 = (Rs 48,480 + 12847.2 + 850) x 25.70 per cent, reflecting an increase of Rs 436.
Similarly, for a Scale II employee, getting approximately Rs 64,820 basic pay, a special allowance at 28.30 per cent, and a learning allowance of Rs 850 (if applied), the DA would be Rs 21,592. This is Rs 588 higher than the existing DA of Rs 21,004 per month.
Similarly, the payout will increase for other scales after the DA revision.
DA is a tool to keep employees’ salaries aligned with the rising cost (inflation), and keep them motivated for their work.
