Dearness allowance for bank employees will be increased to 15.97% for the first quarter of the financial year 2024-25 as inflation increases.

Representational(Reuters)

This hike reflects an increase of 0.01% in the dearness allowance, according to a circular by the Indian Banks’ Association (IBA).

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Dearness allowance is calculated based on the quarterly average of the all India consumer price index (CPI) for industrial workers.

It was 139 for the fourth quarter of the financial year 2023-24 (January, February, and March this year). The previous quarter was 138.76, marking an increase of 0.24 points for the fourth quarter, and therefore, the hike.

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Banks had also hiked salaries by 17% this March for public sector bank employees, reflecting an increase of 8,284 crore for the banks to pay salaries.

The five-day workweek, a long-standing demand is still pending approval from the government, while the IBA and bank unions have already agreed upon it. However, reports suggest this could also lead to an increase in working hours.

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