The government has asked public sector banks (PSBs) to start the negotiation process for the 13th bilateral wage settlement in a time bound manner and finalize it in the next 12 months. Wage revision for employees and officers of public sector banks will be due from November 1, 2027. Financial institutions including public sector banks and insurance companies revise the salaries of their employees every five years. Under this process, the Indian Banks Association (IBA) negotiates with employee organizations and unions and makes a consensual wage settlement.

Government banks received letter

The Department of Financial Services, through a letter, directed the heads of banks to take necessary steps to start negotiations for the upcoming wage revision. In this letter dated April 20, it has been said that the negotiation process should be completed within a maximum of 12 months. Before the last agreement, the Finance Ministry had asked the IBA that all future wage negotiations should be completed before the stipulated period, so that the revised wages could be implemented on time.

The work will have to be completed soon

It was also said in the letter that after earlier agreements, there has been a lot of delay in making necessary amendments in the rules. Therefore, this time it should be ensured that the changes in the related rules are completed before the scheduled date of the next salary agreement. The government said that the banking sector is the backbone of the Indian economy and the morale of the employees remains high if they get fair salaries.

Continuous increase in profits of banks

Public sector banks have earned record profits in the financial year 2025 and it is expected that this momentum will continue in the financial year 2026 also. The total profit of all public sector banks increased from Rs 1 lakh crore to Rs 1.05 lakh crore in FY 2023, after which it increased to Rs 1.41 lakh crore in FY 2024 and Rs 1.78 lakh crore in FY 2025. The improvement has been driven by improved asset quality, consistent credit growth, adequate capital buffers and rising returns on assets.

Improvement in balance sheet also

There is continuous improvement in the balance sheets of public sector banks. At the end of September 2025, gross non-performing assets (NPAs) were at a record low of 2.30 per cent, while net NPAs were around 3 per cent. The provisioning coverage ratio increased to 94.63 per cent, and the capital adequacy ratio remained at a healthy level of 15.96 per cent at the end of H1FY26. Wage negotiation generally benefits employees of public sector banks, old generation private banks and some foreign banks.

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