The United Forum of Bank Unions (UFBU) has asked the Indian Banks’ Association (IBA) to delay the implementation of the Performance Linked Incentive (PLI) scheme for senior bank officials. The UFBU believes that the scheme, introduced by the Department of Financial Services (DFS), could negatively impact the career growth and promotion chances of thousands of senior bank officers. UFBU has asked all public sector banks – State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), Canara Bank, Union Bank, Indian Bank, Indian Overseas Bank, Bank of Maharashtra, Punjab & Sind Bank, Bank of India, Central Bank of India, UCO Bank, to delay the implementation of this new PLI scheme. First let’s understand what is this new PLI Scheme.
What is the new PLI Scheme for Senior Officers of Public Sector Banks?
The Performance Linked Incentive (PLI) scheme is a new system that will decide promotions and career progress based on an officer’s performance and achievements instead of the traditional seniority-based approach. The scheme applies to bank officers in Scale IV and above, which includes senior managers, chief managers, and general managers in public sector banks.
Under the new government-imposed rule, PLI for Scale IV officers and above will be calculated differently, leading to huge differences in payments. Scale 1, Scale 2 and Scale 3 Officers will get normal PLI but Scale IV and above officers will get almost double salary.
- Scale IV officers can get 70% of their annual basic pay (approximately ₹11.75 lakh per year).
- Scale V and VI officers can get 80% of their annual basic pay (approximately ₹14.40 lakh per year).
- Scale VII officers can get 90% of their annual basic pay (approximately ₹22.50 lakh per year).
PLI Ceiling for Each Category of Employees in Public Sector Banks
| Grade | PLI Ceiling as % of Annual Basic Pay |
|---|---|
| EDs and MDs of Nationalised Banks, DMDs, MDs, and Chairman of SBI | 100% |
| Scale VII and Scale VIII | 90% |
| Scale V and Scale VI | 80% |
| Scale IV | 70% |
Why is UFBU Against Immediate Implementation of new PLI Scheme for Government PSU Banks?
UFBU is not completely against the PLI scheme but wants it to be properly reviewed before it is implemented. The union is concerned that:
- The scheme might limit promotions: If implemented in its current form, the PLI scheme may reduce the chances of promotions for many experienced officers.
- Unfair impact on senior officials: Many officers who have worked in banks for a long time may find it difficult to meet the new performance criteria, affecting their job security and career growth.
- Banks are rushing to implement it: Despite an agreement to review the scheme, some banks like State Bank of India (SBI), Canara Bank, and Punjab National Bank (PNB) have already issued circulars asking employees to follow the PLI guidelines.
What Happened in the Meetings Between UFBU and IBA?
The issue was discussed in two conciliation meetings held on March 18 and March 21, 2025, at the office of the Chief Labour Commissioner (Central). These meetings were held because UFBU had given a strike notice on March 5, 2025, demanding a review of the PLI scheme.
During these meetings:
- IBA agreed to collect feedback from different banks and submit a report to DFS for reconsideration of the scheme.
- UFBU expected that banks would wait for this review before implementing the scheme, but some banks started implementing it immediately through official circulars.
Since some banks have started implementing the scheme before the review process is complete, UFBU has written to IBA, asking them to advise banks to delay the implementation until proper discussions take place. UFBU has also sent a letter to the Chief Labour Commissioner (Central), Ministry of Labour, requesting the government to intervene and stop the premature implementation of the scheme.
