Why Bank Officers’ Dearness Allowance Was Reduced Despite Inflation: A Look at the BPS Formula
The Dearness Allowance for bank officers and employees, calculated under the Bipartite Settlement system, has once again seen a reduction for the May-July 2025 quarter — sparking widespread criticism about the outdated formula used.
Author: Kalyani Mali
Published: 19 hours ago
The Dearness Allowance (DA) payable to bank employees for the May–July 2025 quarter has been revised based on the Consumer Price Index (CPI) data released for the preceding months. This periodic adjustment, as per the Bipartite Settlement system, is intended to align employee compensation with inflation trends.
DA Announcement Reflects a Decline
The DA payable to bank officers has been revised to 19.97% for the months of May to July 2025, marking a decline from 21.20% in the previous quarter. This reduction of 1.23% is based on the average CPI figure of 143.00 recorded during the January to March 2025 quarter.
Image: : Official circular showing revised DA rate of 19.97% for May–July 2025
What About Pensioners?
While serving employees are facing a DA cut, pensioners too are seeing no increase in their DA rates. The rates remain unchanged across all slabs and retirement periods. This has raised concerns among retirees struggling with rising medical and living expenses.
Image: A chart showing stagnant rates for pensioners across different retirement categories.
Impact on Support Staff and Special Pay Roles
According to a circular issued by the All India Bank Employees' Association (AIBEA), the DA cut also impacts those receiving special pay such as clerks, drivers, security guards, and others. In some cases, the effective DA loss goes as high as ₹59.35 for drivers and ₹56.58 for senior customer service associates.
Image: AIBEA chart revealing DA deduction across different roles and special allowances.
Protest Circular Reflects Employee Concerns
Several bank employee unions have announced a nationwide general strike on May 20, 2025. The circular issued by AIBEA outlines DA losses for both sub-staff and clerical employees, with some reductions reaching as high as ₹1,472.43. The document includes calls for fair treatment and expresses dissatisfaction with current policies, which unions have described as unfavorable to workers.
Image: AIBEA protest circular outlines wage losses and calls for a May 20 general strike against DA cuts and outdated policies.
The reduction in (DA to 19.97% for the May–July 2025 quarter has highlighted structural issues. These issues stem from the DA calculation mechanism under the CPI-based formula of the Bipartite Settlement system. This adjustment has led to varying impacts across employee categories. Meanwhile, pension rates remain unchanged.
Comments
- SURENDER KUMAR HISSARIA
DA is calculated based on averagae quarterly CPI for bank employees since many years. if Index reduces automatically DA will reduce, In the month of May many times DA reduced on previous occasions also. why the question of reduction raised? if increases on the same CPI DAta no one have objection? why NO Change in DA for EX staff mentioned? everybody knows that DA for Ex staff is effected half yearly and next will be in August 2025 then why one say no change in DA for ex staff? Just misleading. The quesion you may raise about the pattern of calculation of CPI on real facts and not the DA reduced. REgards S K Hissaria EX staff BOB skhissaria@gmail.com
Posted on 7 hours ago