Government never agreed to 5-day work week for banks, facts being twisted: Official sources

A finance ministry official stated prior to the United Forum of Bank Unions' (UFBU) three-day strike scheduled for September 28–30 that the government never agreed to a five-day workweek for banks because this crucial demand has not been fulfilled.

"During the most recent pay discussions, the five-day workweek was never agreed upon. It was never used as a bargaining chip. The official, who wished to remain anonymous, stated, "They (bank unions) are distorting the facts."

In a letter dated September 22, the All India Bank Officers’ Confederation said there had been no response to this demand “which was agreed and signed in March, 2024 under the last wage revision settlement”. The letter added that officials from the Indian Banks’ Association (IBA) had informed union representatives that the issue of five-days banking is “under consideration by the Government”.

Currently, bank branches are open on the first, third, and fifth Saturdays of every month.

IBA has accordingly recommended to the Government. The due changes in the working hours, will be effective after approval by the Government of India and necessary clearances from Government / Reserve Bank of India,” the Settlement said.

However, the finance ministry official asserted the government had not agreed to a five-day work week, although a lot of other concessions were made.

“The IBA didn’t want to go beyond an 11% hike in the wage negotiations, but the government intervened and a hike of 17% was announced. Even on the issue of family pension, the IBA was not keen but the government said that post-retirement, they will be on the other side, and they should not fight it,” the source said, adding that the performance-linked incentive (PLI) scheme had been kept on hold for the current financial year following opposition.

Announced in November 2024, the PLI scheme for public sector banks’ employees faced intense pushback and was called “discriminatory” because it was only for Scale 4 officers and above. According to bank unions, the scheme is divisive, demotivating, and distortionary.

With the three-day strike that begins on Monday in mind, the government on Wednesday said public sector banks and regional rural banks will function as normal on September 27, Sunday. The decision, the Ministry of Finance said, was being taken to ensure “genuine banking needs” of the public are not hindered for an extended period.

With September 26 being a non-working Saturday for banks, the three-day strike would have led to banks being shut for five days in a row.

The RBI has given its approval for all bank branches, offices, ATM-linked branches, and currency chests to remain “fully operational” on Sunday, the finance ministry further said on Wednesday.

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Government Puts PLI Payment to PSB Executives on Hold for FY 2025-26

The Government of India has decided to keep the payment of Performance Linked Incentive (PLI) to executives of Public Sector Banks (PSBs) in abeyance for the financial year 2025-26, until further orders.

The decision has been communicated by the Department of Financial Services (DFS), Ministry of Finance, through a letter dated September 7, 2026, addressed to the Chairman of State Bank of India and the Managing Directors & CEOs of all Nationalised Banks.

According to the DFS communication, the decision relates to the Performance Linked Incentive (PLI) Scheme for Whole Time Directors and Senior Executives of Public Sector Banks, which was issued by the Department vide its letter dated November 19, 2024.

The Government stated that representations had been received from bank employees regarding the PLI scheme. After considering the matter, it has been decided that:

“The payment of PLI to the Executive of PSBs (Scale IV to VIII) for FY 2025-26 shall remain in abeyance until further orders.”

Importantly, the Government has also stated that the issue will be taken up during the ongoing discussions for the 13th Bipartite Settlement / 10th Joint Note.

This indicates that the matter concerning PLI for executives in Scale IV to VIII could become part of the broader discussions between the banking industry and employee organisations.

A copy of the DFS letter has also been sent to the Chief Executive, Indian Banks’ Association (IBA), Mumbai, indicating that the banking industry body has been formally informed about the decision.

The development is significant as bank employees and their organisations have raised concerns regarding the existing PLI structure and its distribution among different categories of bank employees.

With the payment for FY 2025-26 now kept in abeyance, the issue is expected to receive further attention during the ongoing 13th Bipartite Settlement/10th Joint Note discussions.

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Dividend Paid by PSU Banks to Government for FY 2025-26

Bank	Dividend (Rs. Crore)
State Bank of India (SBI)	8,813
Punjab National Bank (PNB)	2,416
Bank of Baroda(BOB)	2,811
Canara Bank	2,397
Union Bank of India
Bank of India(BOI)	1,553
Central Bank of India
Indian Bank	1,815.05
Indian Overseas Bank
UCO Bank	501
Bank of Maharashtra
Punjab & Sind Bank

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This PSU Bank pays Rs 969.64 Crore Dividend to Government of India for FY26

The Indian government received a dividend of Rs 969.64 crore from the Central Bank of India for FY26. For the fiscal year 2025–2026, the Central Bank of India announced and paid its fourth interim dividend at a rate of 6%. As a result, the bank's total interim dividend for FY 2025–2026 has reached 12%, with the first three quarters of the fiscal year seeing the declaration of a 6% interim dividend. The Government of India would get ₹969.64 crore in total dividend payments for FY 2025–2026.

Shri Kalyan Kumar, Managing Director and CEO of Central Bank of India, along with Executive Directors Shri M. V. Murali Krishna, Shri Mahendra Dohare and Shri E. Ratan Kumar, today presented the fourth interim dividend cheque of ₹484.82 crore payable to the Government of India to Union Finance Minister Nirmala Sitharaman at the Ministry of Finance in New Delhi. The cheque presentation ceremony was also attended by Smt. Shalini Pandit, Joint Secretary, Department of Financial Services, Ministry of Finance, Government of India, and Shri Shishram Tundwal, General Manager, Central Bank of India.

Banks pay dividends to distribute a part of their profits to shareholders. When a bank earns a profit, it does not keep the entire amount for itself. A portion of the profit may be paid to shareholders as a dividend, while the remaining amount is retained for business growth, capital requirements, and future operations. In the case of public sector banks, the Government of India is usually the largest shareholder. Therefore, when a bank declares a dividend, a significant portion of the dividend is paid to the government. Dividend payments also reflect the bank’s strong financial performance and provide income to shareholders for their investment in the bank.

The Government shareholding in Banks is as follows:

Bank Name	Govt Stake (Dec 25)	Govt Stake (June 24)
State Bank of India	55.50%	57.54%
Canara Bank	62.93%	62.93%
Bank of Baroda	63.97%	63.97%
Punjab National Bank	70.08%	70.08%
Bank of India	73.38%	73.38
Indian Bank	73.84%	73.84%
Union Bank of India	74.76%	74.76%
Bank of Maharashtra	73.60%	86.46%
UCO Bank	90.95%	95.39%
Central Bank of India	89.27%	93.08%
Indian Overseas Bank	92.44%	96.38%
Punjab & Sind Bank	93.85%	98.25

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The government orders PSU Banks finish the 13th BPS Wage Revision on schedule

The Indian government's Ministry of Finance has issued a formal letter instructing public sector banks to finish the 13th BPS on schedule. The 10th Joint Note and 13th Bi-partite Settlement for Public Sector Bank employees' wage revision is set to go into effect on November 1st, 2027.

The wage revision settlements were previously signed every two to three years. However, the 12th Bi-partite Settlement (also known as the 9th Joint Note) was completed in just 14 months. The government hopes to finish the settlement on schedule this year.

This year, public sector banks have been advised to finish the negotiations within a maximum of 12 months.

According to the government, it has been noted that in the past, significant changes to the relevant regulations have been made after a significant amount of time had passed since the settlements.

It is emphasized that the consequential changes to the pertinent regulations should also be finished before the next wage settlement's due date, since talks for the settlement are now being started in a timely manner.

It usually takes three to four months to implement consequential changes to the regulations. As a result, it is recommended that the banks start the process of amending the pertinent regulations as soon as the negotiations are concluded. This will ensure that the amendment procedures are finished well in advance of the next wage settlement's scheduled start date, which is November 1, 2027.

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Government asks PSU banks to take steps to reduce employee stress and improve working conditions

Public sector banks have been urged by the government to take action to lessen employee stress and enhance working conditions. Numerous bank employees have complained about excessive work pressure, long hours, irrational business targets, and staff shortages, which has led to this decision. According to officials, the boards of all public sector banks (PSBs) have been instructed by the finance ministry to determine the primary reasons for employee stress and create detailed plans of action to address them. According to a government official, the banks have promised to implement the government's EASE 8.0 reforms program at the level of individual banks as well as the level of the entire policy.

The action follows many grievances from officers' groups and bank unions. Numerous workers claimed they are required to put up long hours, deal with increasing insurance and sales goals, and even be given non-banking tasks like election work. Numerous PSU Bank personnel have taken their own lives. The toxic work culture affects not just younger employees but even senior personnel. A senior manager of Bank of Baroda, Shri Iswar Chand Jha, recently took his own life. An AEO at Canara Bank allegedly committed suicide as a result of work-related stress. The passing of a Bank of Baroda chief manager was one piece of news that rocked the nation. The chief manager of Bank of Baroda in Baramati, Pune, committed suicide as a result of work-related stress.A few months ago, Central Bank Manager had committed Suicide. His Wife alleged that Bank Seniors were Mentally Harassing Him.

These are only a handful of incidents that demonstrate the poisonous workplace culture that exists in banks. Many more bank employees have taken their own lives. You can read about banker suicides here if you'd like. These days, if we discuss work pressure and a poisonous workplace, we hear about it every day. A Bank of Baroda branch manager refused to allow employees to take time off to care for his ailing mother. A 29-year-old girl just quit her job at Punjab National Bank because of the toxic work environment. On social media, her video had gained a lot of popularity. She claimed that she eventually quit her job because she was unhappy with it.A lot of banks deny leaves to staff and taking leave during month end or quarter end is considered a sin.

This shows that the working environment in public sector banks is now pathetic. The Government needs to immediately intervene and improve the work culture in banks otherwise banks will surely lose the talented staff.

Part of the EASE Reforms

The EASE (Enhanced Access and Service Excellence) programme is an ongoing reform initiative by the Department of Financial Services (DFS) to improve performance and efficiency in public sector banks. Under the EASE 8.0 and EASERise initiatives, the government is focusing on employee welfare, leadership development, and inclusive growth in PSBs.

At the recent PSB Manthan conclave, a special session was held on “Building an inclusive and future-ready workforce.” The session focused on diversity, equity, and skill development across various roles and genders in the banking system.

Banks Introduce New Well-Being Measures

To address stress and improve morale, several PSBs have started new initiatives such as Mentorship programmes for professional growth, Digital counselling platforms for mental well-being, Employee Health Index (EHI) surveys conducted every quarter. Out of 12 public sector banks, seven banks are now conducting EHI surveys regularly, and three banks are sharing the results with their boards to take quick action when needed, a senior bank executive said.

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One more State implement Old Pension Scheme(OPS) for nearly 2,500 employees

Nearly 2,500 government workers will find great relief as the Punjab government formally announces the Old Pension Scheme's (OPS) implementation. Employees who entered the service after January 1, 2004, but whose job postings or appointment letters were posted prior to that date, would benefit from this long-awaited change. Even though their hiring process started before to 2004, these individuals had up to now been incorrectly classified under the New Pension Scheme (NPS).

The government issued the notification on May 23, 2025, following an order by the Punjab and Haryana High Court. This comes after a prolonged legal battle fought by affected employees seeking justice. Many of these employees have already completed over 20 years of service and belong to various government departments like:

• Punjab State Power Corporation Limited (PSPCL)
• Education Department
• Urban Local Bodies
• Other administrative departments

Who Will Benefit from the Old Pension Scheme?

As per the updated Punjab Civil Services Rules, Volume II, the OPS will now apply to:

• Employees who joined after January 1, 2004 but whose posts were advertised or appointment letters were issued before that date.
• Employees appointed on compassionate grounds after January 1, 2004, if their application was submitted and they met eligibility conditions before 2004.

OPS vs NPS: Employee Choice

Eligible employees will be allowed to choose between:

• Old Pension Scheme (OPS)
• New Defined Contributory Pension Scheme (NPS)

However, they must make a decision within 3 months from the date of the notification. If they don’t opt within this period, they will automatically remain under the NPS.

Reactions from Employee Groups

Jasvir Talwara, convenor of the Purani Pension Bahali Sangharsh Committee, called the move a “victory for justice.” He pointed out that these employees should never have been placed under the NPS, and the notification has corrected a long-standing error.

Talwara also urged the government to act quickly and open General Provident Fund (GPF) accounts for all 2,500 employees by May 28, 2025, as ordered by the High Court, so the implementation of OPS can begin without delays.

Concerns Over Remaining Employees

However, employee unions also raised concerns that around 2 lakh other employees who joined after January 1, 2004, are still not covered under OPS. Despite the AAP government’s promise in 2022 to restore OPS for all employees, a full rollback has not been implemented.

Talwara criticized recent efforts by AAP ministers to promote the Unified Pension Scheme introduced by the Centre, which unions strongly oppose.

Chief Minister Bhagwant Mann recently reiterated support for employees with pre-2004 appointments but has not addressed the demands of the larger group hired post-2004.

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Government Approves New Senior Level Posts in Public Sector Banks

The Government of India has authorized the establishment of new senior-level roles in Public Sector Banks (PSBs), a major move intended to bolster the banking industry.  It is anticipated that this action will improve asset management, increase the effectiveness of nationalized banks, and give bank workers better career options. 

 Shri Pankaj Chaudhary, the Minister of State for Finance, gave information on the newly created roles and the updated process for determining the number of senior positions in nationalized banks during the Rajya Sabha discussion of the decision. In five nationalized banks where the position was previously unattainable, the government has authorized the creation of the Chief General Manager (CGM) position. These financial institutions are:

1. Bank of Maharashtra 2. Central Bank of India 3. Indian Overseas Bank 4. Punjab & Sind Bank 5. UCO Bank

Until now, these banks did not have a Chief General Manager (CGM) post, which serves as an important leadership position just below the Executive Director (ED) level. 

The CGM post has already been available in other Public Sector Banks (PSBs), and its introduction in these five banks will ensure a more uniform administrative structure across the banking sector. The new CGM positions in these banks will be introduced from October 2024 onwards.

Apart from introducing CGM posts, the government has also revised the methodology for calculating the number of senior-level positions in PSBs. This revision affects the following positions:

Chief General Manager (CGM), General Manager (GM), Deputy General Manager (DGM), Assistant General Manager (AGM)

The number of these posts has been determined based on the business size of each bank as of March 31, 2023. The revision aims to ensure that banks have the right leadership structure to manage their operations efficiently.

Let’s have a look at the number of posts – how many CGM, GM, DGM, AGM posts are available in different banks. The maximum number of posts are available in Punjab National Bank and Bank of Baroda. The number of posts vary according to the size of business of Bank.

Bank Name	CGM	GM	DGM	AGM
Punjab & Sind Bank	4	16	48	144
Bank of Maharashtra	8	32	96	288
UCO Bank	8	32	96	288
Indian Overseas Bank	8	32	96	288
Central Bank of India	8	32	96	288
Bank of India	12	48	144	432
Indian Bank	11	44	132	396
Union Bank of India	20	80	240	720
Canara Bank	21	84	252	756
Punjab National Bank	22	88	264	792
Bank of Baroda	22	88	264	792

This new structure will ensure that banks have sufficient leadership at different levels to handle their growing operations effectively.

The Indian banking sector has been growing rapidly, with increasing loan disbursements, rising customer demand, and digital banking advancements. To keep up with this growth, banks need strong leadership and better management structures.

Earlier, the number of senior positions was not aligned with the expanding business size of banks. This led to workload imbalances, slower decision-making, and operational inefficiencies.

By introducing new CGM positions and revising the number of GMs, DGMs, and AGMs, the government is ensuring that banks have the right number of senior officials to handle operations efficiently.

This move is also in line with the government’s efforts to:

1. Strengthen public sector banks and make them more competitive.

2. Improve the financial health of banks by ensuring better monitoring of assets and loans.

3. Support economic growth by making banking services more efficient.

The government’s decision to introduce new senior-level positions in public sector banks is a major step toward strengthening India’s banking system. By ensuring better management, improved supervision, and stronger leadership, this move will help banks become more efficient, financially stable, and customer-friendly.

With the new Chief General Manager (CGM) positions and revised senior-level post structure, nationalized banks are expected to see better operational efficiency, improved risk management, and stronger career growth opportunities for employees.

This change will not only benefit bank employees but also enhance banking services for customers across India, ensuring that the public sector banking system remains strong, efficient, and well-managed in the years to come.

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