In a major relief for public sector bank employees and retirees, the Indian Banks' Association (IBA) has announced a fresh revision in Dearness Allowance (DA) and Dearness Relief (DR) for the February–April 2026 quarter. The revised rates will benefit employees under the XI and XII Bipartite Settlement (BPS), while pensioners will receive updated DR for a defined period in 2026.

The latest adjustment is based on movements in the Consumer Price Index (CPI), ensuring that salaries and pensions remain aligned with inflation trends.

Revised DA Rates for Bank Employees

According to the IBA circular, employees covered under the XII BPS and 9th Joint Note will now receive 25% Dearness Allowance, reflecting an increase of nearly 4% compared to the previous quarter.

For staff governed under the XI BPS and 8th Joint Note, the updated DA rate has been fixed at 59.08% of basic pay.

The revision is calculated using the average CPI data for October, November, and December 2025. The average CPI stood at 148.03, which is 25 points higher than the base index of 123.03. This resulted in a DA increase of 1.07 slabs for the applicable category.

IBA has clarified that while calculating DA, figures beyond the third decimal point will be ignored.

How Much Will Your Salary Increase?

The salary hike will depend on your basic pay and applicable settlement structure. Here’s an illustrative snapshot of the increase under XII BPS:

Stage Basic Pay (₹) Existing DA (₹) Revised DA (₹) Increase (₹)

1	48,480	14,879.00	15,544.30	665.30
5	56,480	17,300.72	18,074.30	773.58
10	67,160	20,533.71	21,451.85	918.14
15	80,560	24,590.09	25,689.60	1,099.51
77	1,56,500	49,450.75	51,661.88	2,211.13
87	1,86,880	59,010.71	61,649.30	2,638.59

Employees in higher pay scales will naturally see a larger absolute increase in their monthly earnings. The revised DA will be applicable for February, March, and April 2026 salaries.

Dearness Relief for Pensioners

The announcement also brings relief for bank pensioners. Dearness Relief (DR) has been revised for February to July 2026.

The revised DR rates are as follows:

• Pensioners retired before January 1, 1986: 1528.94% DR




• Retired between November 2017 and October 2022: 59.08% DR




• Retired after November 2022: 25% DR

The variation in DR percentages is based on the applicable settlement structure and retirement date. This ensures that pensioners across different timeframes receive compensation aligned with inflation and settlement agreements.

Why This DA Revision Matters

Dearness Allowance is a crucial salary component designed to offset inflation’s impact on employees’ purchasing power. Since it is directly linked to CPI, quarterly revisions ensure that compensation reflects current economic conditions.

With inflationary pressures affecting household budgets, this DA hike is expected to provide meaningful financial relief to lakhs of bank employees and pensioners across India.

The move also reinforces the structured mechanism under bipartite settlements, where salary revisions are formula-driven rather than discretionary.

What Employees Should Do

Bank employees are advised to:

• Check their basic pay stage




• Identify whether they fall under XI or XII BPS




• Calculate the new DA percentage accordingly




• Review February 2026 salary slips for revised figures

Pensioners should similarly verify their DR revision based on their retirement date.

Conclusion

The latest DA and DR revision by the Indian Banks' Association offers timely relief to thousands of bank employees and retirees. With DA linked directly to CPI trends, the updated rates ensure that salaries and pensions remain responsive to inflation.

As the February 2026 payroll cycle approaches, employees can expect a noticeable increase in their take-home pay, especially those in higher pay brackets. Pensioners, too, stand to gain from the structured DR adjustment.