Will 8th Pay Commission Affect Bank Employees’ Salary: The announcement of the 8th Central Pay Commission has generated widespread discussion among government and public sector employees. While Central Government employees look forward to a potential salary revision from January 2026, many public sector bank employees are wondering whether the 8th Pay Commission will impact their pay structure. Here’s a detailed look at what this means for bank employees and how their salaries are actually determined.
Will 8th Pay Commission Affect Bank Employees’ Salary?
The 8th Pay Commission is a panel formed by the Government of India to review and recommend revisions in salaries, allowances, and pensions for Central Government employees. The Union Cabinet recently approved its Terms of Reference, setting the stage for a fresh pay revision.
The Commission is expected to be formally constituted by April 2025 and will have 18 months to submit its report. The recommendations are likely to be implemented from January 1, 2026. Initial projections suggest that government employees may receive a fitment factor of around 2.86, which could lead to an average salary increase of 30–40 percent.
Is the 8th Pay Commission Applicable to Bank Employees?
The 8th Pay Commission will not apply to employees working in public sector banks such as SBI, PNB, Bank of Baroda, and Canara Bank. The Pay Commission covers only Central Government employees working in ministries, departments, and government offices.
Bank employees are governed under a separate system of salary revision known as the Bipartite Settlement. Their pay structure is not decided by the Central Pay Commission but through negotiations between the Indian Banks’ Association (IBA) and representatives of employee unions.
Who Regulates the Salaries of Bank Employees?
Public sector bank salaries are regulated through Bipartite Settlements, which are industry-level wage agreements between:
- The Indian Banks’ Association (IBA), representing bank management.
- The United Forum of Bank Unions (UFBU), representing various employee unions.
Each settlement typically remains in force for five years and covers salary structure, allowances, and other benefits. This system allows wage revisions to align with market conditions, productivity, and the financial performance of banks.
The 12th Bipartite Settlement, Latest Salary Revision
The 12th Bipartite Settlement was signed in March 2024 and is effective from November 1, 2022, to October 31, 2027. It introduced the latest round of pay hikes and benefit improvements for bank employees. Key features of the 12th Bipartite Settlement include:
- An average salary hike of about 17 percent.
- Revision of basic pay, dearness allowance, and special allowances.
- Enhanced pension contributions and leave benefits.
- Improved medical coverage and welfare provisions.
This agreement covers around eight lakh public sector bank employees across India, ensuring a structured pay increase independent of the Central Pay Commission.
Why Bank Employees Are Not Covered Under the Pay Commission?
Public sector banks, though government-owned, operate as independent financial institutions under the Banking Regulation Act. Their employees are not categorized as Central Government employees. The Bipartite Settlement framework gives banks flexibility to manage compensation based on industry performance and profitability, something that the Pay Commission cannot account for in its standardized approach for government employees.
Will Bank Employees Get a Salary Hike in 2025 or 2026?
Bank employees will not receive any additional salary hike from the 8th Pay Commission in 2026. Their pay revision under the 12th Bipartite Settlement is already in effect and will continue until 2027. However, they will continue to receive:
- Annual increments as per the settlement terms.
- Quarterly revisions in dearness allowance (DA) based on the Consumer Price Index (CPI).
- Possible mid-term adjustments or benefits if agreed upon between the IBA and unions.
The next major revision for bank employees will come under the 13th Bipartite Settlement, expected around 2027–2028.
8th Pay Commission vs. Bipartite Settlement
To better understand how the salary revision systems differ for government and bank employees, it’s useful to compare the structure of the 8th Pay Commission with the Bipartite Settlement. While both aim to ensure fair compensation and periodic wage adjustments, they operate under entirely different frameworks, timelines, and regulatory authorities.
| Aspect | 8th Pay Commission | Bipartite Settlement |
| Applicable To | Central Government employees | Public Sector Bank employees |
| Frequency | Every 10 years | Every 5 years |
| Salary Regulator | Government of India | Indian Banks’ Association (IBA) and Bank Unions |
| Next Revision | January 2026 (expected) | Ongoing till 2027 |
| Expected Hike | 30–40% (projected) | Around 17% (under 12th Settlement) |
Frequently Asked Questions (FAQs)
Q1: Will the 8th Pay Commission be applicable to bank employees?
A1: No, the 8th Pay Commission will not apply to bank employees. It covers only Central Government employees, while salaries of public sector bank staff are revised separately through Bipartite Settlements.
Q2: How are salaries of bank employees decided if not by the Pay Commission?
A2: Bank employees’ salaries are determined through Bipartite Settlements between the Indian Banks’ Association (IBA) and bank unions under the United Forum of Bank Unions (UFBU). These settlements typically occur every five years.
Q3: What is the 12th Bipartite Settlement?
A3: The 12th Bipartite Settlement, signed in March 2024, is the latest wage revision agreement for bank employees. It provides an average salary increase of around 17% and remains effective from November 1, 2022, to October 31, 2027.
Q4: Will bank employees get a salary hike in 2026 when the 8th Pay Commission is implemented?
A4: No, bank employees will not receive a separate hike in 2026 due to the 8th Pay Commission. Their current salary revision under the 12th Bipartite Settlement is already in effect and will continue until 2027.
Q5: When can bank employees expect their next salary revision?
A5: The next major pay revision for bank employees is expected under the 13th Bipartite Settlement, likely to be finalized around 2027–2028 after the current 12th Settlement period ends.
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Hi, I’m Tripti, a senior content writer at Oliveboard, where I manage blog content along with community engagement across platforms like Telegram and WhatsApp. With 3+ years of experience in content and SEO optimization related to banking exams, I have led content for popular exams like SSC, banking, railways, and state exams.