New Delhi, March 19 The United Forum of Bank Unions (UFBU) on Thursday expressed serious concern and objected to the directive issued by the Department of Financial Services (DFS), Ministry of Finance, advising public sector banks to pay Performance Linked Incentive (PLI) to eligible officers from Scale IV and above.
The DFS issued the directive on Wednesday.
UFBU, an umbrella organization of all bank unions, has demanded that implementation be put on hold pending resolution through established consultative mechanisms.
The directive is premature and inappropriate, as the matter of PLI remains under active discussion in conciliation proceedings before the Office of the Chief Labour Commissioner (Central), UFBU said in a statement.
The most recent conciliation meeting was held on March 9, 2026, wherein the unions and the management deliberated on the very issue now sought to be unilaterally implemented, it said, adding that the signed minutes of that meeting clearly record that the question of PLI for FY 2024–25 was under active consideration, with further steps to be pursued through the conciliation and bilateral process.
For the DFS to issue bank-specific implementation directives barely 9 days later renders the conciliation process nugatory.
The directive also disregards the deliberations and minutes of several CLC meetings, to which DFS representatives, IBA, Bank managements and all constituent unions and associations are parties and signatories.
UFBU reiterated that the conciliation proceedings are a statutorily recognized forum for the resolution of industrial disputes and that any action during their pendency to unilaterally implement a contested scheme is prejudicial to industrial peace.
The UFBU cautioned that such a step may aggravate unrest in the banking sector and could compel the workforce to resort to further democratic and lawful agitational actions in defense of their rights and interests.
UFBU urged the Department of Financial Services, the Indian Banks’ Association, and the managements of all public sector banks to refrain from unilaterally implementing the directive dated March 18, 2026, and instead resolve the issue of PLI through established consultative and conciliation mechanisms in a manner that preserves the sanctity of the existing settlements.
It is pertinent to note that the revised PLI scheme was never a demand raised by the employees or trade unions in the banking sector.
The scheme has been imposed from above and seeks to replace a well-established, collectively negotiated dispensation with an individual-performance-based mechanism for officers in Scale IV and above.
Obviously, it said, the attempt is to shift from the present common performance-based incentive to an individual productivity-based incentive.
This will have the effect of placing senior officers into differential risk brackets, creating an artificial and divisive classification within the officer cadre, and undermining the collective character of the workforce, it said.
There are serious financial implications of the revised scheme, it said, adding that PLI for staff and officers up to middle management is limited to a maximum of 15 days’ Basic Pay plus DA under the existing dispensation.
The DFS-directed scheme, by contrast, envisages PLI of up to 365 days’ Basic Pay for officers in Scale IV and above, potentially resulting in an exponential increase in the financial outgo, reportedly to the extent of nearly fifteen times, it said.
At a time when the banking industry is focused on prudential norms, cost efficiency, capital discipline, and sustainable growth, such a disproportionate increase in a single component of remuneration for a select category of officers raises legitimate questions of propriety, prudence, and governance, it added.