A Bipartite Settlement is the wage agreement between bank managements, represented by the Indian Banks' Association, and the bank employees' unions. It fixes pay scales, dearness allowance, allowances and service conditions for clerical and subordinate staff, usually for five years at a time. Officers' pay is revised in a parallel document called a Joint Note. The 12th Bipartite Settlement, signed on 8 March 2024, is in force until 31 October 2027, and the 13th is due from 1 November 2027.
By Vishvas Yadav · Updated 5 October 2026 · Dates checked against the settlement documents and union circulars
What is a Bipartite Settlement?
"Bipartite" means two parties: the employer and the employees. Before 1966, bank wages were fixed by industrial tribunals, notably the Sastry Award of the early 1950s and the Desai Award of 1962. From the 1st Bipartite Settlement of 19 October 1966, managements and unions have negotiated wages directly instead of having them imposed by a tribunal.
Legally, each settlement is a memorandum of settlement under Section 2(p) and Section 18(1) of the Industrial Disputes Act, 1947, which makes it binding on the banks and the workmen covered. Every new settlement modifies the earlier ones rather than replacing them, which is why the 12th Bipartite Settlement opens by reciting the Sastry Award and every settlement since 1966.
A settlement covers more than pay scales. It also sets dearness allowance, special allowance, house rent allowance, leave, retirement benefits and working conditions.
Bipartite Settlement vs Joint Note
| Point | Bipartite Settlement | Joint Note |
|---|---|---|
| Who it covers | Workmen: clerical and subordinate staff | Officers, Scale I to Scale VII |
| Legal status | Settlement under the Industrial Disputes Act, 1947 | Agreement between IBA and officers' associations; officers are not "workmen" under the Act |
| Current version | 12th Bipartite Settlement, 8 March 2024 | 9th Joint Note, 8 March 2024 |
| Previous version | 11th Bipartite Settlement, 11 November 2020 | 8th Joint Note, 11 November 2020 |
| Pay scales | Clerical starts at ₹24,050; subordinate staff at ₹19,500 | Scale I starts at ₹48,480; Scale VII at ₹1,56,500 |
The two are negotiated together, signed on the same day and take effect from the same date, so people often call both "the bipartite settlement". The difference matters when you check a figure: HRA, special allowance rates and several allowances differ between the cadres. For the officer side of the last round, see the 8th Joint Note officer pay scales.
Who negotiates
- Indian Banks' Association (IBA): negotiates for the managements of the banks that give it a mandate to do so.
- United Forum of Bank Unions (UFBU): the joint platform of the employee unions and officers' associations, including AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF and INBOC.
- Signatories: the 12th Bipartite Settlement was signed for the workmen by AIBEA, NCBE, BEFI, NOBW and INBEF. The officers' associations signed the 9th Joint Note.
- Government of India: not a party, but as owner of the public sector banks it approves the cost, and some items such as pension and NPS changes need its separate approval.
How a Bipartite Settlement is negotiated
- Charter of demands. The unions draft their demands and submit them to IBA, usually around the time the current settlement expires.
- Mandate. Each bank authorises IBA to negotiate on its behalf.
- Negotiations. IBA and the unions hold rounds of talks on the wage increase, merger of DA, allowances and service conditions. Strikes or strike notices are common at this stage.
- Memorandum of Understanding. The headline terms are agreed and signed. For the 12th round this happened on 7 December 2023, when the 17% increase was agreed.
- Final settlement. The detailed settlement and Joint Note are signed, with effect from the date the previous settlement expired.
- Implementation. Banks issue circulars, refix pay on the new scales and pay arrears back to the effective date.
Because the settlement is always backdated, a long negotiation does not cost employees the increase. It does mean a large arrears payment, which has its own tax treatment.
How long is a Bipartite Settlement valid?
Since the 5th settlement, every round has run for five years from 1 November. Clause 42 of the 12th Bipartite Settlement, for example, makes it binding for five years from 1 November 2022. Under Section 19(2) of the Industrial Disputes Act, a settlement also stays binding after that period until one side gives notice to end it, so the old terms continue to apply until the next settlement is signed.
Every Bipartite Settlement: 1st to 13th
| Settlement | Signed on | Effective from | Signed how long after effective date | Agreed increase |
|---|---|---|---|---|
| 1st | 19 October 1966 | – | – | – |
| 2nd | 12 October 1970 | – | – | – |
| 3rd | 1 August 1979 | – | – | – |
| 4th | 17 September 1984 | – | – | – |
| 5th | 10 April 1989 | 1 November 1987 | 17 months | – |
| 6th | 14 February 1995 | 1 November 1992 | 27 months | – |
| 7th | 27 March 2000 | 1 November 1997 | 28 months | – |
| 8th | 2 June 2005 | 1 November 2002 | 31 months | – |
| 9th | 27 April 2010 | 1 November 2007 | 29 months | 17.5% |
| 10th | 25 May 2015 | 1 November 2012 | 30 months | 15% (₹4,725 crore a year) |
| 11th | 11 November 2020 | 1 November 2017 | 36 months | 15% (₹7,898 crore a year) |
| 12th | 8 March 2024 | 1 November 2022 | 16 months | 17% of the 2021-22 pay slip cost |
| 13th | Not yet negotiated | Due 1 November 2027 | – | – |
Signing dates are as recited in Clause 1 of the 12th Bipartite Settlement, which lists every earlier settlement. From the 5th round onwards each settlement runs five years from 1 November. The agreed increase is the percentage of the industry wage bill announced for each round; earlier rounds were not expressed as a single headline percentage.
The pattern in the fourth column is the useful part. Before the 12th round, every settlement from the 6th onwards was signed more than two years late, and the 11th took three years. The 12th was signed in 16 months, partly because the MoU was agreed in December 2023. That is why the Ministry of Finance's request to finish the 13th within twelve months would be a break with history.
What the agreed increase means
The agreed increase is a percentage of the industry's wage bill, not of any one person's salary. It is shared out through the DA merger, the loading on the new scales and the allowances, so an individual's rise can be higher or lower than the headline figure.
Current settlement: the 12th Bipartite Settlement
The 12th Bipartite Settlement and the 9th Joint Note were signed on 8 March 2024 and run from 1 November 2022 to 31 October 2027. The main terms:
- Increase: 17% of the annual pay slip cost for 2021-22.
- New scales: DA at 8088 points merged into basic pay at 30.38%, plus a 3.22% loading.
- Clerical scale: ₹24,050 to ₹64,480, with stagnation increments taking it to ₹93,960.
- Officer Scale I: ₹48,480 to ₹85,920.
- New DA formula: 1% of pay for every point by which the quarterly CPI-IW average (2016=100) exceeds 123.03.
- Special allowance: 26.50% of basic pay for clerical staff, subordinate staff and Officer Scale I.
- HRA: a flat 10.25% for workmen at all centres.
To work out your own pay, arrears and tax, use the 12th Bipartite Settlement salary calculator. Every stage of every scale is in the 12th BPS pay scale chart, and a new clerk's pay is worked through in IBPS clerk salary.
Next: the 13th Bipartite Settlement
The 13th Bipartite Settlement is due from 1 November 2027. As at 5 October 2026 it has not been negotiated:
- AIBEA's circular of 29 June 2026 set out the process for preparing the charter of demands. The charter had not been submitted to IBA.
- In April 2026 the Ministry of Finance asked public sector banks, according to press reports, to start the talks early and finish within twelve months.
- On 27 September 2026 the UFBU deferred its strike of 28 to 30 September after a meeting with IBA. The issues were five-day banking, the performance-linked incentive and residual 12th BPS matters, not the 13th wage revision.
For a projection of 13th BPS pay on different assumptions, see the 13th Bipartite Settlement latest news and calculator. For a dated log of what has happened, read the latest bank salary hike news.
Dearness allowance in bank pay
Bank DA is not announced by the Government like central government DA. It is calculated from the All India CPI-IW published by the Labour Bureau, using the formula in the settlement, and revised every quarter: in February, May, August and November.
| Settlement | DA formula | August to October 2026 |
|---|---|---|
| 12th BPS (all public sector banks) | 1% of pay per point above 123.03 (CPI-IW 2016=100) | 27.83% |
| 11th BPS (banks that have not implemented the 12th) | 0.07% of pay per 4-point slab above 6352 (CPI-IW 1960=100) | 62.37% |
The two rates are not comparable, because the 12th settlement merged 30.38% DA into basic pay and restarted the count. The next revision is due from 1 November 2026. Every quarter since November 2022, with a DA calculator, is on the current DA for bank employees page.
Pension and retirement benefits
The settlement decides which components count for retirement. Basic pay, stagnation increments and qualification pay count. Special allowance, HRA and transport allowance do not, even though special allowance carries DA. This is why a pension or gratuity worked out from gross salary always comes out too high.
- Employees who joined after their bank moved to the National Pension System, from April 2010 in most public sector banks, pay 10% of pay plus DA. The bank pays 14%, as approved by the Government in August 2021.
- Earlier joiners who opted for the bank pension scheme draw a pension based on their average pay over the last ten months of service.
- Family pension is 30% of pay, without a ceiling.
- Gratuity is governed by the Code on Social Security, 2020, which replaced the Payment of Gratuity Act on 21 November 2025, together with the bank's own gratuity rules.
If you retired between November 2017 and October 2022, your pension rests on the 11th BPS scales; use the 11th Bipartite Settlement calculator for those figures.
Which banks follow the Bipartite Settlement?
| Type of bank | Follows it? |
|---|---|
| Public sector banks, including SBI | Yes. SBI implements the same terms through its own circulars |
| Old private sector banks | Those that give IBA a mandate to negotiate for them follow it |
| New private sector banks | No. They set their own pay structures |
| Regional Rural Banks | Not a party, but their staff have pay parity with sponsor bank staff under the National Industrial Tribunal award of 30 April 1990, upheld by the Supreme Court. Revisions reach them by government order |
| Co-operative banks | No. They have their own agreements, though some adopt similar scales |
If you work in a bank that is not listed in the settlement, check your own wage agreement before using any figure on this page.
Bank salary tools and guides
Frequently asked questions
What is a bipartite settlement in banking?
It is the wage agreement between bank managements, represented by the Indian Banks' Association, and the employee unions. It fixes pay scales, DA, allowances and service conditions for clerical and subordinate staff, and is a settlement under Section 2(p) and Section 18(1) of the Industrial Disputes Act, 1947.
How long is a bipartite settlement valid?
Five years from 1 November, the pattern since the 5th settlement. The 12th Bipartite Settlement runs from 1 November 2022 to 31 October 2027. Its terms continue to apply after that until the next settlement replaces them.
What is the difference between a bipartite settlement and a joint note?
A bipartite settlement covers workmen, meaning clerical and subordinate staff. A joint note covers officers in Scale I to Scale VII. Both come out of the same negotiation and are signed on the same day, but they have different pay scales and allowance rates. The current pair is the 12th Bipartite Settlement and the 9th Joint Note, both dated 8 March 2024.
Do private banks follow the bipartite settlement?
Old private sector banks that give the Indian Banks' Association a mandate to negotiate for them follow it. New private sector banks set their own pay and do not.
Who signs the bipartite settlement?
The managements of the participating banks, represented by the Indian Banks' Association, and the workmen's unions. The 12th Bipartite Settlement was signed for the workmen by AIBEA, NCBE, BEFI, NOBW and INBEF. Officers' associations sign the joint note.
When is the 13th bipartite settlement due?
From 1 November 2027. As at 5 October 2026 it has not been negotiated and the unions are still preparing their charter of demands.
This page summarises published settlements, circulars and reports for general information. Your own pay and benefits depend on your bank's implementation, so confirm them with your bank's HR or payroll department. Found a figure that looks wrong? Tell us and we will check it against the source.
Written by Vishvas Yadav, Senior HR | Payroll & Compliance Professional, Founder of HR Calcy.