Dearness Allowance Hiked: Bank Employees’ DA Raised to 25%, Pensioners Get Fresh Dearness Relief
Dearness Allowance has been revised for bank employees, bringing positive news for both serving staff and retired pensioners. The Indian Banks’ Association (IBA) has announced a fresh increase in DA for the February-April 2026 quarter. Alongside this, new Dearness Relief (DR) rates have also been released for pensioners, effective from February 2026.
Here’s a detailed look at what has changed, who benefits, and how the revised rates have been calculated.
Bank Employees’ Dearness Allowance Increased to 25%
As per the latest circular issued by the Indian Banks’ Association (IBA), the Dearness Allowance for bank employees has been fixed at 25% for the months of February, March, and April 2026.
Key Highlights:
The CPI average for this period stood at 148.03, which is 25 points above the base index of 123.03. In the previous quarter, the CPI average was 146.96. The 1.07-point rise in CPI has directly resulted in the DA increase.
How Dearness Allowance Is Calculated
The revised Dearness Allowance is calculated as 25% of the pay, which includes basic salary minus certain allowances.
Calculation Rules:
Under the XI Bipartite Settlement / 8th Joint Convention dated November 11, 2020, the fixed DA rate has been worked out at 59.08%.
This structured formula ensures transparency and regular adjustments in line with inflation trends.
Dearness Relief (DR) Announced for Bank Pensioners
In addition to the DA revision for working employees, the IBA has also issued updated Dearness Relief (DR) rates for retired bank employees. These rates will be applicable from February 2026 to July 2026.
The DR percentage varies depending on the retirement period.
DR Rates Based on Retirement Date:
Pensioners belonging to other categories have been advised to check detailed guidelines available through official IBA sources.
What This Means for Bank Employees and Pensioners
The revision in Dearness Allowance offers financial relief to serving bank staff by aligning salaries with inflation trends. At the same time, the updated Dearness Relief ensures that retired employees continue to receive compensation adjustments based on rising living costs.
With inflation-driven revisions becoming a regular quarterly exercise, both employees and pensioners can expect systematic updates tied to CPI movements.
The latest Dearness Allowance revision brings welcome financial support for bank employees, while pensioners benefit from updated Dearness Relief rates . With DA fixed at 25% for the February–April 2026 quarter and DR revised across multiple retirement categories, the move reflects continued efforts to cushion banking professionals against inflationary pressures.
Here’s a detailed look at what has changed, who benefits, and how the revised rates have been calculated.
Bank Employees’ Dearness Allowance Increased to 25%
As per the latest circular issued by the Indian Banks’ Association (IBA), the Dearness Allowance for bank employees has been fixed at 25% for the months of February, March, and April 2026.
Key Highlights:
- Applicable under the XII Bipartite Settlement / 9th Joint Note dated March 8, 2024
- DA increased by nearly 4% compared to the previous quarter
- Based on the average Consumer Price Index (CPI) for October, November and December 2025
The CPI average for this period stood at 148.03, which is 25 points above the base index of 123.03. In the previous quarter, the CPI average was 146.96. The 1.07-point rise in CPI has directly resulted in the DA increase.
How Dearness Allowance Is Calculated
The revised Dearness Allowance is calculated as 25% of the pay, which includes basic salary minus certain allowances.
Calculation Rules:
- Based on CPI 2016 series
- DA is revised by 0.01% for every second decimal change
- Digits after the third decimal are ignored
Under the XI Bipartite Settlement / 8th Joint Convention dated November 11, 2020, the fixed DA rate has been worked out at 59.08%.
This structured formula ensures transparency and regular adjustments in line with inflation trends.
Dearness Relief (DR) Announced for Bank Pensioners
In addition to the DA revision for working employees, the IBA has also issued updated Dearness Relief (DR) rates for retired bank employees. These rates will be applicable from February 2026 to July 2026.
The DR percentage varies depending on the retirement period.
DR Rates Based on Retirement Date:
- Retired after January 1, 1986 but before November 1, 1992 / July 1, 1993 – 1528.94%
- Retired after November 1, 1992 / July 1, 1993 – 750.75%
- Retired after April 1, 1998 – 482%
- Retired after November 1, 2002 – 334.80%
- Retired after November 1, 2007 – 258.45%
- Retired after November 1, 2012 – 132.20%
- Retired after November 1, 2017 – 59.08%
- Retired after November 1, 2022 – 25%
Pensioners belonging to other categories have been advised to check detailed guidelines available through official IBA sources.
What This Means for Bank Employees and Pensioners
The revision in Dearness Allowance offers financial relief to serving bank staff by aligning salaries with inflation trends. At the same time, the updated Dearness Relief ensures that retired employees continue to receive compensation adjustments based on rising living costs.
With inflation-driven revisions becoming a regular quarterly exercise, both employees and pensioners can expect systematic updates tied to CPI movements.
The latest Dearness Allowance revision brings welcome financial support for bank employees, while pensioners benefit from updated Dearness Relief rates . With DA fixed at 25% for the February–April 2026 quarter and DR revised across multiple retirement categories, the move reflects continued efforts to cushion banking professionals against inflationary pressures.
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