Dearness Allowance : The All India Bank Employees Association (AIBEA) has recently issued a circular clarifying the status of Dearness Allowance (DA) for bank employees for the months of August, September, and October 2025. According to the circular, the Consumer Price Index (CPI) data used for calculating DA has remained consistent with the previous quarter. Therefore, there will be no change in the DA rate for this quarter.
It’s important to understand that the CPI figures used in this calculation are based on the 1960 base year index, which remains a standard reference for computing DA in several sectors, including banking. The DA is a cost of living adjustment allowance paid to employees to offset the impact of inflation, and it’s revised quarterly based on CPI data released by the Labour Bureau.
Dearness Allowance : CPI Numbers for April–June 2025 Quarter
Let’s take a closer look at the official CPI figures for the quarter:
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April 2025 CPI: 9433.49
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May 2025 CPI: 9466.36
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June 2025 CPI: 9532.10
The average CPI for these three months stands at 9480. This figure is crucial because it directly determines the number of DA “slabs” applicable. In this case, 9480 CPI equals 782 slabs, which is the same as the number of slabs applicable during the previous quarter (January–March 2025).
As a result of this unchanged slab count, the Dearness Allowance will remain steady at 54.74% of Basic Pay for bank employees for the quarter of August to October 2025. This means that employees will continue receiving the same percentage of DA as they were in the previous quarter, with no increase or decrease in their pay under this head.
Dearness Allowance : Impact on Bank Employees
The continued DA rate at 54.74% ensures stability in income for bank employees during this quarter. While some may have expected an increase due to inflationary trends in various sectors, the unchanged average CPI number means that there is no statistical basis for a DA increase at this time.
However, the CPI trend observed—particularly the jump from April to June—indicates a gradual rise in inflation. For instance, the CPI increased from 9433.49 in April to 9532.10 in June, which is a clear upward movement. If this trend continues in the next quarter, it could result in a higher average CPI, which in turn may lead to an increase in DA slabs and a higher DA rate starting from November 2025.
Dearness Allowance : New Guidelines for DA Calculation Issued by AIBEA
In addition to the DA status update, the All India Bank Employees Association has also issued new guidelines concerning the calculation method for DA. These changes are especially relevant for banks that have not yet implemented the 12th Bipartite Settlement (BPS) or the 8th Joint Note, which are agreements that standardize pay structures across public sector banks.
According to the new instructions, while calculating the average CPI, only the digits up to the third decimal point will be considered, and any digits beyond the third place will be ignored, not rounded. This change is intended to bring uniformity and precision to the calculation process, ensuring that there are no discrepancies due to minor decimal variations in CPI computation.
This instruction will be applicable to all banks that have not yet implemented the latest wage settlements. It is part of a broader effort by unions and employee bodies to push for consistent practices across all banking institutions, especially those that lag behind in executing the agreed-upon pay reforms.
Prospects of DA Increase in Coming Quarters
While there is no change in DA for August to October 2025, the possibility of an increase in future quarters is quite high. The month-on-month increase in CPI data indicates that inflationary pressures are rising gradually. If the CPI continues to rise in the next few months, the average for the upcoming quarter (July to September 2025) may exceed the current average of 9480.
A higher CPI average would directly translate into more DA slabs, which would mean an increase in the DA percentage starting from November 2025. This could provide some relief to bank employees, especially in light of increasing living costs due to fuel prices, food inflation, and housing costs in urban centers.
Bank employees are advised to stay informed about the upcoming CPI releases and DA circulars issued by their respective banks and employee unions. While the current quarter does not bring a monetary increase, future quarters hold promise depending on economic trends and CPI fluctuations.
Key Takeaways
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The DA for bank employees will remain unchanged at 54.74% from August to October 2025.
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The average CPI for April–June 2025 was 9480, the same as the previous quarter.
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This equates to 782 DA slabs, with no addition or reduction in slabs.
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No increase in take-home salary from DA this quarter.
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New DA calculation rules have been issued by AIBEA for banks that haven’t adopted the 12th BPS or 8th Joint Note.
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Future increase in DA is likely if the CPI continues its upward trend in the next quarter.
Conclusion
The Dearness Allowance component of bank employees’ salaries plays a vital role in helping them cope with inflation. While there is no change in the DA rate for the August to October 2025 quarter, the gradual increase in CPI suggests that a rise in the upcoming quarter is likely. Employees should watch CPI updates closely and anticipate a potential upward revision in their allowances from November 2025 onward, depending on inflation data.
The implementation of uniform guidelines for DA calculation also signals a move towards greater transparency and standardization, ensuring fairness across all banking institutions. As the economic landscape evolves, these updates will continue to play an essential role in financial planning for bank employees and their families.