The Department of Financial Services (DFS), Ministry of Finance, has decided to keep the payment of Performance Linked Incentive (PLI) to senior executives of Public Sector Banks (PSBs) on hold for the financial year 2025-26.
Recently, Public Sector Banks have paid the PLI to senior executives for financial year 2024-25. As soon as PLI was credited, a big chaos was observed in the entire banking industry. UFBU announced All India Strike on 11 September 2026 against new PLI scheme and demanding 5-day Banking.
In a letter dated September 7, 2026, the Department of Financial Services informed the Chairman of State Bank of India and the Managing Directors and Chief Executive Officers of all nationalised banks about the decision.
The decision relates to the Performance Linked Incentive (PLI) Scheme for Whole Time Directors and Senior Executives of Public Sector Banks. The scheme was issued by the Department of Financial Services in November 2024.
PLI Payment to Remain in Abeyance
According to the letter, representations were received from bank employees regarding the PLI scheme. After considering the matter, the government has decided that the payment of PLI to PSB executives in Scale IV to VIII for FY 2025-26 will remain in abeyance until further orders.
This means that the incentive payment will not be released for now.
Matter to Be Discussed With Bank Unions
The Department of Financial Services has also said that the issue will be taken up during the ongoing 13th Bipartite Settlement and 10th Joint Note discussions.
The decision could therefore lead to further discussions between the government, bank managements and employee representatives regarding the PLI scheme and its implementation.
The letter was issued by Vijay Shankar Tiwari, Under Secretary to the Government of India. A copy of the communication has also been sent to the Chief Executive of the Indian Banks’ Association (IBA), Mumbai.
