DA increased for bankers & bank pensioners from August-2022
The Dearness Allowance of Bank employees announced quarterly based on All India Consumer Price Index Numbers (AICPIN) and effective from February, May, August and November months of every year.
Bank employee Dearness Allowance in salary is a calculation of allowance paid to employees based on their work scale to compensate for the inflation, and this is calculated from a percentage of basic salary to mitigate the inflation on people.
As per current updates, the new total Dearness Allowance for Bank employees is 36.8% which calculated on the basis of Bank employee basic salary, wherein this quarter, the DA for public sector bank employees do hold an expecting increase by 3.76% Dearness Allowance in their salary from Aug 22 to October 2022 which increase their total salary.
Let’s check the Dearness Allowance for workmen and officer employees in public sector banks and some private banks are considered as per the below DA rate.
The allowance added in the salary is apart from basic salary and it is calculated on a defined percentage, where every bank has their pay grade defined for employees based on their location and type of work they are assigned.
Thus this increases the basic salary and the Dearness Allowance is a percentage from basic salary, and anyone who has got a higher basic salary will surely have a higher slab of Dearness Allowance, which does give them a good total NET salary.
This part of the salary is always increased and in Banks, it is estimated to have an increase in DA for every one year based on their performance, and we can update the new DA rates of bank employees for the next quarter from November 2022 after announcing price index numbers from July to Sep 2022.
Revised Family pension With 30% Hike in PSBs - Updates
Union Finance Minister Nirmala Sitaraman had announced revisions in the pension scheme for public-sector bank pensioners. This new scheme will benefit thousands of families of public-sector bank employees.
With the enhanced family pension scheme, the families of deceased public-sector bank employees will be eligible for a pension equivalent to 30 per cent of the last salary drawn by the deceased employee.
The additional burden of the scheme will be borne by the banks. The scheme is in continuation to the 11th bipartite settlement signed by the banks and unions, addressing wage revision.
Further, employees who have been working with the banks before 2004 will be eligible for a defined pension scheme, wherein the monthly pension will be calculated on the basis of a pre-set formula based on their last-drawn salaries.
Those who have joined after 2004 will be a part of the NPS wherein the employees and the banks contribute towards a retirement corpus.
Earlier, the family pension scheme had slabs of 15-20 and 30 per cent of the pay that the pensioner drew at that point of time and it was capped at a maximum of Rs 9,284.
“That was a very paltry sum and the FM was very concerned… she wanted it to be revised so that they get a decent amount to survive and sustain,” Panda said, adding that with this, the pension can go to as high as Rs 30-35,000 per family.
The immediate financial implication of this on banks is approx Rs 10 to 12 Crore for a bank like Punjab National Bank. It will bemuch higher in case of State Bank of India.
C H Venkatachalam, general secretary of All India Bank Employee Association, said the schemes were agreed upon already and the bank employees were awaiting the announcement.
A defined contributory pension fund governs employees who joined banks after April 2010. This scheme will benefit 60 per cent of public sector employees, Venkatachalam said.
On account of increase in pension contributions by banks under the new pension scheme, Punjab National Bank would incur Rs 10-12 crore per month, a bank official said.
For the increase in family pensions of deceased bank employees, the impact would be marginal for PNB as such pensioners are less, he added.
Family pension increased for Bank Pensioners
The government has announced changes to the pension scheme of public sector banks. For family members of employees, the ceiling on family pension has been lifted and, for current employees, the banks’ contribution to the scheme has been increased by 4 percentage points to 14% from earlier 10%.
“Earlier, the scheme had slabs of 15%, 20% and 30% of the pay that a pensioner drew at that point of time. It was capped subject to a maximum of Rs 9,284. That was a very paltry sum and finance minister Nirmala Sitharaman was concerned and wanted that to be revised so that family members of bank employees get a decent amount to survive and sustain,” said Debashish Panda, secretary in the department of financial services, at a press conference held by Sitharaman.
The second change is that the employer contribution to the New Pension Scheme (NPS) corpus has been enhanced to 14% of the pay from 10% earlier.
The changes are in continuation of the 11th bipartite settlement signed by banks with unions on wage revision last year. In addition to the wage revision, there was a proposal for enhancement in family pension and also the employer’s contribution under the NPS.
A statement issued by the government said that thousands of families of public sector banks will be benefited by the enhanced family pension scheme, while increase in employer contribution will provide increased financial security to the bank employees under the NPS.
Those employees who have been with banks before 2004 are eligible to a defined benefit pension scheme where the monthly payout is determined by a formula based on their last drawn wage. These employees will benefit from the increase in pension limits.
Employees who have joined after 2004 are part of the NPS where the employees and the banks contribute toward a retirement corpus. After retirement, the corpus must be used to buy an annuity from an insurance company that will provide monthly income. The extent of monthly income depends upon the size of the corpus and cost of annuity.
With the fall in interest rate, the returns through annuity schemes have been shrinking, resulting in a call for higher contribution. The insurance regulator is also working with the industry to develop an inflation-linked annuity scheme.
DA for Bank Pensioners from Aug-21 to Feb-22
For Pensioner's increase From Aug 2021 to Jan 2022 will be 23 slabs., @ 0.07, 0.10, 0.15, 0.18%
As per their date of retirement.
DA for Bank Pensioners from Aug-19 to Feb-20
The percentage of Dearness Relief (DR) payable to the bank pensioners for the half year August 2019 to January 2020 will be as under.
- Retired on or after 1.11.2012: Average index: 7167 (681 slabs)
| No of slabs | Rate per Slab @ | Percentage of DR payable | DR on Basic Pension (Before commutation) |
| 681 | 0.10 | 68.10% | Basic Pension × 68.10% |
- Retired on or after 1.11.2007 up to 31.10.2012: Average index 7167 (1084 slabs)
| No of slabs | Rate per Slab | Percentage of DR payable | DR on Basic Pension (Before commutation) |
| 1084 | 0.15 | 162.60% | Basic Pension× 162.60 % |
- Retired on or after 1.11.2002 and up to 31.10.2007 Average index 7167 (1219 slabs)
| No of slabs | Rate per Slab | Percentage of DR payable | DR on Basic Pension (Before commutation) |
| 1219 | 0.18 | 219.42% | Basic Pension× 219.42 % |
- Retired on or after 01.04.1998 till 31.10.2002 Average index number7167: (1370 slabs)
| Basic pension (before commutation) | DR amount |
| Up to basic pension 3550 | Basic Pension×328.80 % |
| Basic pension from 3551 to 5650 (2100) | 11672.40 + for the basic pension in excess of @274% |
| Basic pension from 5651 to 6010 (360) | 17426.40 +for basic pension in excess of 5650 up to 6010 @ 164.40% |
| Basic pension 6011 and above | 18018.24 + for the basic pension in excess of 6010 @ 82% |
- Retired on or after 1.11.92/1.7.93 up to 31.3.98 Average index 7167 (1504 slabs)
| Basic pension (before commutation) | DR Amount |
| Up to basic pension 2400 | 526.40% × basic pension |
| Basic pension from 2401 to 3850 (1450) | 12633 + from 2401 up to 3850 @ @436.16% |
| Basic pension from 3851 to 4100 (250) | 18957.32 + for pension in excess of 3851 up to 4100 @ 255.68% |
| Basic pension 4101 and above | 19596.32. +for pension in excess of 4100 @ 135.09% |
- Retired on or after 1.1.86 and before 1stNovember 1992/1st July 1993 and before 01.11.2002
Average index number 7167 (1641 slabs)
Retired on or after 1.1.86 and before 1stNovember 1992/1st July 1993 and before 01.11.2002
600 points merger 7167-600= 6567/4=1641 slabs
| Basic pension | DR amount on 1641 slabs |
| Basic pension up to 1250 | Basic Pension ×1099.47% |
| Basic pension from 1251 to 2000 (750) | Rs.13743.37+for the basic pension in excess of Rs.1250 @902.55% |
| Basic pension from 2001 to 2130 (130) | Rs.25025.24+for the basic pension in excess of Rs.2000@541.53% |
| Basic pension from 2131 above | Rs.25729.22 for the basic pension in excess of Rs.2130 @ 27897% |
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