Banking operations could face repeated disruptions over the coming weeks after the United Forum of Bank Unions (UFBU) announced a series of nationwide strikes, including an indefinite strike from October 26.
The unions are protesting over two key issues the long-pending implementation of a five-day banking week and the revised Performance Linked Incentive (PLI) scheme for senior bank officers introduced by the Government.
The UFBU, which claims to represent more than 90% of employees across public sector, private sector, foreign, regional rural and cooperative banks, has announced an all-India strike on September 11. This will be followed by three consecutive strike days on September 28, 29 and 30. An indefinite strike is scheduled to begin on October 26.
Five-day banking remains pending
The unions have renewed their demand for a five-day working week, pointing to the Settlement/Joint Note signed on March 8, 2024. Under the agreement, the remaining Saturdays were proposed to be declared holidays, with employees working an additional 40 minutes each day from Monday to Friday.
According to UFBU, the proposal was sent to the Finance Ministry for approval but has remained pending for more than two years. The unions said the change would not reduce customer service hours, as the additional 40 minutes of working time from Monday to Friday would compensate for the Saturdays being declared holidays.
Revised PLI scheme becomes major point of contention
The second major issue is the revised PLI formula for senior officers. UFBU said the existing PLI system was introduced through a November 2020 settlement between the Indian Banks’ Association (IBA) and bank unions. It covered workmen employees as well as officers from Scale I to Scale VII.
Under the existing arrangement, employees receive incentives ranging from one day’s wage to a maximum of 15 days’ wage, depending on the performance and profitability of the respective bank. The payment is made uniformly to eligible employees of the bank.
The unions said the Department of Financial Services (DFS), under the Finance Ministry, directed banks in November 2024 to adopt a separate incentive formula for Scale IV to Scale VII officers.
UFBU opposed the move, claiming that it breached the bilateral agreement and shifted the basis of incentives from overall bank performance to individual performance.
Unions seek changes to incentive formula
The unions subsequently held discussions with the IBA and submitted their proposed modifications to the government’s formula. However, UFBU said it has not received any response from the DFS or the Government.
According to the unions, the Government advised banks in March 2026 to implement the revised formula and reiterated the direction on August 21. UFBU has challenged the revised scheme before the Delhi High Court, where the matter is currently pending.
The unions said the revised formula could provide incentives of up to 365 days’ wages based on individual performance. This is significantly higher than the existing bilateral scheme, under which the maximum incentive is 15 days’ wages.
Disparity in incentives alleged
UFBU said officers from Scale IV to Scale VII number around 40,000 out of a total banking workforce of approximately eight lakh, accounting for about 5% of employees.
According to the unions, the maximum incentive available to the remaining 95% of employees is one day’s wage, while officers covered under the revised formula could receive up to 365 days’ wages.
The unions have termed the difference disproportionate and alleged that the revised scheme could lead to significantly higher expenditure for a small section of the workforce
UFBU also argued that the new system requires officers to be classified according to individual performance. creating separate categories of performers and non-performers
Unresolved issues add to tensions
The unions said the dispute over the revised PLI scheme is also pending before the Chief Labour Commissioner and alleged that the Government proceeded with implementation despite the ongoing dispute.
UFBU further maintained that the revised DFS formula goes against the uniform PLI system agreed upon through bilateral negotiations. It said the new system changes the basis of incentives from the performance of the bank as a whole to the performance of individual officers.
The unions also raised several other unresolved matters identified as residual issues under the March 8, 2024 Settlement/Joint Note. They said issues mentioned in strike notices issued in March 2025 and January 2026 are still under conciliation and have not been settled.
“Thus, the agitation has been forced on the Unions due to the actions of the Government and managements,” UFBU said.
Queries sent to the Finance Ministry and the Indian Banks’ Association on Tuesday evening seeking their responses had not been answered at the time of publication…
The statement was issued by C.H. Venkatachalam of AIBEA, Rupam Roy of AIBOC, L. Chandrasekhar of NCBE Sanjay Khan of AIBOA, Debasish Basu Choudhary of BFFI, Prem Makker of INBOC and O.P. Sharma of INBEF