Bank employees get 15.97% dearness allowance for May-July

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In a significant development for bank employees, the Indian Bank’s Association (IBA) has announced a hike in the dearness allowance (DA) to 15.97% for the months of May, June, and July 2024. This increase in DA is a part of the broader wage revision agreed upon in March 2024.

Details of the Revised Dearness Allowance

The notification from the Indian Bank’s Association outlines the revised DA rates in accordance with the 12th Bipartite Settlement dated March 8, 2024, and the Joint Note of the same date. The rate of Dearness Allowance payable to Workmen and Officer employees for the months of May, June & July 2024 shall be 15.97% of pay. This calculation is based on a 0.01% change in DA on pay for every second decimal place of the Consumer Price Index (CPI) 2016 over 123.03 points.

Calculation Based on Consumer Price Index

The adjustment in DA is based on the confirmed All India Average Consumer Price Index for Industrial Workers (Base 2016=100) for the quarter ending in March 2024. The index values recorded for the months of January, February, and March 2024 are as follows:

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  1. January 2024: 138.9
  2. February 2024: 139.2
  3. March 2024: 138.9

The average CPI for this period is 139, which marks an increase from the previous quarter’s average CPI of 138.76. Consequently, the number of points over the base index of 123.03 is calculated to be 15.97 (139 – 123.03), resulting in the corresponding DA hike.

Impact of the Wage Revision Agreement

This increase in dearness allowance is a part of the broader wage revision agreed upon in March 2024. As per this agreement, the IBA and bank employee unions settled on an annual wage hike of 17%. The wage agreement, effective from November 2022, is expected to cost public sector banks an additional ₹8,284 crore annually and will benefit approximately 8 lakh bank employees. This hike in DA is one of the components of the overall wage revision. These updates will bring relief and improved financial benefits to bank employees during the specified period.

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