Dearness Allowance: Bank Employees’ DA Hiked, Pensioners Get New Relief

Dearness Allowance: The Indian Banks’ Association (IBA) has announced the new Dearness Allowance (DA) for bank employees for February, March, and April 2026. The IBA has also released the Dearness Relief (DR) rates for bank pensioners from February 2026 to July 2026. Significant changes have been made to the DA rates applicable to both workers and officers in the banking sector, as well as the DR rates for retired pensioners.

According to the latest IBA circular, under the XII BPS/9th Joint Pact (dated March 8, 2024), the dearness allowance for working employees has been fixed at 25 percent for February, March, and April 2026. This new DA rate is approximately four percent higher than the previous quarterly DA. The current DA is calculated based on the average Consumer Price Index (CPI) for October, November, and December 2025. The average CPI for this period was 148.03, which is 25 points above the base figure of 123.03. The previous quarterly CPI average was 146.96, so the DA increase this time is due to a 1.07 point increase in CPI.

The IBA clarified in its circular dated February 2, 2026, that this dearness allowance will be 25 percent of the pay (base salary minus allowances). According to the CPI 2016, DA is revised by 0.01 percent for every second decimal change, while digits after the third decimal are not changed. Under this, the fixed DA rate for bank employees has been fixed at 59.08 percent, which falls under the XI BPS/8th Joint Convention (dated November 11, 2020).

The IBA has also announced different rates of DR for pensioners, i.e., retired bank employees, which vary depending on the time of their retirement. As per the IBA circular dated February 6, 2026, pensioners who retired after January 1, 1986, but before November 1, 1992 / July 1, 1993, will get 1528.94 percent DR. For those who retired after November 1, 1992 / July 1, 1993, the DR has been fixed at 750.75 percent. Pensioners who retired after April 1, 1998, will get 482 percent DR, while pensioners who retired after November 1, 2002, will get 334.80 percent.

In addition, 258.45 percent dearness relief will be provided to pensioners retired after November 1, 2007, 132.20 percent to pensioners retired after November 1, 2012, 59.08 percent to pensioners retired after November 1, 2017, and 25 percent to pensioners retired after November 1, 2022. IBA has also suggested that pensioners of other categories, whose details are not given here, may refer to the official website of IBA for more detailed information.