According to reports, the Government of India has instructed banks to release Performance Linked Incentives (PLI) to their employees. This is not a written order, but just a verbal order. This has again raised the issue of PLI, and the employees are criticizing the government for this action because the case is still pending with the Chief Labour Commissioner (CLC). Bankers say that if the case is still pending at CLC, then how can banks release PLI.
The All India Bank Officers’ Confederation (AIBOC) has raised strong objections to the government’s move to change the existing Performance-Linked Incentive (PLI) scheme in Public Sector Banks (PSBs). The union says the issue is currently under conciliation, and any change at this stage is not acceptable.
But Why are Bank Employees against this PLI?
To understand this, first we need to have a look at the background of the PLI. The PLI scheme was finalized in 2020 under the 11th Bipartite Settlement (BPS) and 8th Joint Note. It applies to all employees, from part-time staff to General Managers in Scale VII. Under this settlement-based model, PLI is paid at a uniform rate in each bank, depending on the overall performance of that bank. This means that all employees are paid at a uniform rate if the bank performs well.
Last year, the Department of Financial Services (DFS) under the Ministry of Finance advised PSBs to shift from the existing settlement-based PLI system to a new model.
Under the proposed model: Officers in Scale IV and above would receive PLI based on individual performance. They would be placed in different “risk” categories. PLI for these officers could go up to 360 days of Basic Pay. More than 90% of employees, including workmen staff and officers up to Scale III, would remain limited to a maximum of 15 days’ Basic Pay plus Dearness Allowance (DA).
Under this new PLI model, Scale IV and above officers will get almost double salary. Let’s understand with the help of an example. Suppose the salary of a scale 1 officer is Rs.10 lakh annually, Salary of scale 2 officer is Rs.12 lakh annually, Salary of scale 3 officer is Rs.15 lakh annually, Salary of scale 4 office officer is Rs.20 lakh annually, Salary of scale 5 officer is Rs.25 lakh annually, Salary of scale 6 officer is Rs.30 lakh annually, Salary of scale 7 officer is Rs.35 lakh annually, Salary of scale 8 officer is Rs.40 lakh annually, Salary of ED is Rs.50 lakh annually and Salary of MD is Rs.55 lakh annually. Salary of officers is taken as an approximate value just for explaining the PLI. Actual salary may vary.
Now officers from Scale 1 to Scale 3 will get PLI of only 15 days. This means that they will get salary of just 15 days. Scale 1 will get Rs.41,000 as PLI. Scale 2 will get Rs.50,000 as PLI. Scale 3 will get Rs.62,000 but Scale 4 will get double salary i.e. Rs.20 lakh as PLI. Scale 5 will get Rs.25 lakh as PLI. Scale 6 will get Rs.30 lakh as PLI. Scale 7 will get Rs.35 lakh as PLI. Scale 8 will get Rs.40 lakh as PLI. ED will get Rs.50 lakh as PLI. MD will get Rs.55 lakh as PLI.
Bankers have termed this model of PLI as discriminatory. Bankers say that maximum work in branches is done by scale 1 to scale 3 officers whereas scale 4 is mostly posted in controlling offices and scale 5 onwards are posted in circle office/ regional office/ zonal office/ head office.
Bank employees say that officers from scale 1 to scale 3 are earning revenue for bank but they are being paid less.
The union has called this model discriminatory and divisive. According to AIBOC, it creates inequality between senior officers and other employees. It also divides senior officers by linking incentives to individual performance instead of bank performance.
Strike Notice and Conciliation
The PLI issue was included as a major demand in the strike notice served by unions in March 2025.
During conciliation proceedings before the Chief Labour Commissioner (Central) [CLC(C)], banks were advised to maintain status quo. They were also asked to find an amicable solution through bipartite discussions between the Indian Banks’ Association (IBA) and the United Forum of Bank Unions (UFBU).
Representatives of all PSBs, along with DFS and IBA, were signatories to the conciliation minutes. The union says any departure from this understanding is unacceptable and against settled industrial relations.
During discussions with IBA, unions suggested certain improvements in the PLI scheme to make it more equitable. These suggestions were forwarded to DFS for consideration.
During conciliation meetings held on 22nd and 23rd January 2026 regarding the proposed strike for 5 Days Banking, the DFS representative reportedly told unions that if they went ahead with the strike on 27th January 2026, the Government might not take a favorable view on other pending demands, including changes in the PLI scheme.
The union has now alleged that PSBs have been advised to credit PLI for the year ended 31 March 2025, even though the issue is still pending before the CLC.
It has been reported that Bank of India has already credited the PLI.
AIBOC has described the move as an attempt to pressure UFBU and divide the workforce in banks. The union has said it will raise the issue in the next conciliation meeting.
In the meantime, the union has urged all members and affiliates to remain united and vigilant against such actions.
