Bank Dearness Allowance Update: May to July 2026 Secured at 25.70%
Introduction
Bank Dearness Allowance for May, June, and July 2026 has been officially set at 25.70%. This adjustment impacts workmen and officer employees across the banking sector, adhering to the guidelines of the 12th Bipartite Settlement (XII BPS) and the 9th Joint Note. This update reflects the latest consumer price index figures, ensuring that employee compensation keeps pace with inflation.
Full Article
Official Notification Issued
The Indian Banks’ Association (IBA), through its HR & Industrial Relations department, has released a significant circular detailing the Dearness Allowance (DA) rates. This official communication, dated May 2, 2026, provides clarity for banks and their employees regarding compensation for the upcoming months.
Key Dates and Applicability
The revised Dearness Allowance rate of 25.70% is applicable for the months of May, June, and July in the year 2026. This rate is determined under the framework of the 12th Bipartite Settlement (XII BPS) and the 9th Joint Note, which were both established on March 8, 2024.
Understanding the Basis of Calculation
The calculation of Dearness Allowance is directly linked to the All India Average Consumer Price Index (CPI) for Industrial Workers. This index, with a base year of 2016 equaling 100, is crucial for determining inflationary adjustments. The figures for the quarter ending March 2026 have been confirmed and form the basis for this DA revision.
Consumer Price Index Figures for Early 2026
The confirmed CPI data for the first quarter of 2026 is as follows:
* January 2026: 148.6
* February 2026: 148.5
* March 2026: 149.1
Calculating the Dearness Allowance Rate
The average CPI for this quarter stands at 148.73. The DA is calculated based on the number of points exceeding the base index of 123.03. In this instance, the increase is 25.70 points (148.73 – 123.03). This represents a 0.70 point increase compared to the last average quarterly CPI of 148.03, leading to the updated DA percentage.
DA Percentage Under XII BPS and 9th Joint Note
As per the stipulated terms in clause 13 of the 12th Bipartite Settlement and clause 2(i) of the Joint Note, both dated March 8, 2024, the Dearness Allowance for workmen and officer employees is set at 25.70% of their basic pay. This rate is subject to a change of 0.01% in DA for every second decimal place movement in the CPI 2016 over 123.03 points.
Important Information
| Period | Dearness Allowance (DA) Rate | Applicable Settlement/Note | CPI Base Index | Relevant CPI Data (Jan-Mar 2026) |
|---|---|---|---|---|
| May, June, July 2026 | 25.70% | XII BPS / 9th Joint Note (Dated 08.03.2024) | 2016 = 100 | Average CPI: 148.73 |
Conclusion
The official announcement of the 25.70% Dearness Allowance for May to July 2026 brings financial clarity to bank employees. This adjustment, mandated by the XII BPS and 9th Joint Note, ensures that remuneration remains aligned with the cost of living as indicated by the latest CPI figures. Employees can now anticipate this revised DA rate being reflected in their upcoming salary disbursements.
Frequently Asked Questions
What is the new Dearness Allowance rate for bank employees for May-July 2026?
The Dearness Allowance rate for May, June, and July 2026 has been set at 25.70%.
Which agreements govern this Dearness Allowance revision?
This revision is made under the 12th Bipartite Settlement (XII BPS) and the 9th Joint Note, both dated March 8, 2024.
Who is eligible for this Dearness Allowance increase?
All workmen and officer employees in banks are eligible for this revised Dearness Allowance.
What is the base year for the Consumer Price Index used for calculation?
The base year for the All India Average Consumer Price Index for Industrial Workers is 2016, where the index is set at 100.
What were the CPI figures for the quarter ending March 2026?
The CPI figures were 148.6 for January, 148.5 for February, and 149.1 for March 2026.
How is the Dearness Allowance percentage calculated?
It is calculated based on the average Consumer Price Index over a specific quarter, comparing it to a base index. For every second decimal place change in CPI over 123.03, the DA changes by 0.01%.
What was the average CPI for the January-March 2026 quarter?
The average CPI for this quarter was 148.73.
How does this DA rate compare to the previous period?
The previous DA rate was 25.00% for February-April 2026, indicating an increase for the current period.
Who issued the official order for this Dearness Allowance update?
The Indian Banks’ Association (IBA) issued the official order.
When was the official order released?
The order was released on May 2, 2026.
