The Finance Ministry has directed public sector banks to initiate negotiations for the 13th Bi-partite settlement in a time-bound manner and finalise it within 12 months. According to reports from The Economic Times, the wage revision for employees and officers of public sector banks would be due from November 1, 2027. The Department of Financial Services issued this communication to heads of PSBs on April 20, emphasizing the need for timely conclusion to maintain industrial harmony. The government has observed that on previous occasions, consequential amendments to permanent regulations have been effected after considerable delay following the settlement, leading to the current directive for timely completion.
Despite 21 months since the Government of India and the Department of Financial Services (DFS) gave orders to implement the 12th Bipartite Settlement (BPS) and 9th Joint Note, Regional Rural Banks (RRBs) continue to defy directives. As reported by Kanal, AIRRBEA has repeatedly argued that the continued non-implementation is not merely an administrative failure but a breach of good faith with the workforce that has delivered strong financial results for the sector year after year. The association has sought direct intervention from the Ministry to ensure compliance with Mitra Committee manpower norms, with RRB managements operating under the influence of sponsor banks violating GOI norms in letter and spirit.
Public sector banks and financial institutions, including insurance companies, revise wages of their employees every five years. As reported by The Economic Times, the Indian Banks' Association (IBA) is expected to engage in dialogues with employees' unions and associations to arrive at a mutually agreeable wage settlement. The negotiations involve dialogues between the Indian Banks' Association and employees' unions, striving for a mutually agreeable settlement. The finance ministry stresses the necessity of completing consequential amendments to regulations ahead of the next scheduled wage settlement, an area that has seen delays in the past.
Public sector banks have demonstrated strong financial performance, with combined profits crossing ₹1 lakh crore in recent years. According to The Economic Times, PSB profits reached ₹1.05 lakh crore in FY23, rose to ₹1.41 lakh crore in FY24, and further increased to ₹1.78 lakh crore in FY25. Public sector banks have shown significant profitability, with record profits in FY25 and expectations of continued growth into FY26. This improvement has been driven by stronger asset quality, sustained credit growth, comfortable capital buffers and rising return on assets.
PSBs' balance sheets continue to show significant improvement in asset quality metrics. As reported by The Economic Times, gross non-performing assets stood at a record low of 2.30 per cent at the end of September 2025, while net NPAs were around 3 per cent. The provisioning coverage ratio improved to 94.63 per cent, and the capital adequacy ratio remained healthy at 15.96 per cent at the end of the first half of FY26. Key financial indicators, such as asset quality and capital adequacy, underscore the sector's robust performance, underscoring the importance of timely wage settlements in sustaining employee morale and the broader economy.
