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Source: CPI & 12th Bipartite Settlement
Bank employees across India are closely watching the dearness allowance (DA) revision set to be applicable from August 1, 2025, as per the terms of the 12th Bipartite Settlement (BPS). The updated CPI data for May 2025 was released june 30 by the Government of India, and DA projections have been calculated based on various CPI assumptions for June 2025.
What is Dearness Allowance (DA)?
Dearness Allowance (DA) is a cost of living adjustment allowance paid to bank employees and pensioners to cushion the impact of inflation. It is revised every quarter (February, May, August, and November) based on the Consumer Price Index (CPI) announced by the Labour Bureau.
For working employees under the 12th BPS, DA is linked to a formula that converts CPI points into slabs. Each slab carries a fixed percentage, and the total number of slabs directly affects the DA percentage added to the basic pay.
Latest CPI Update
The Consumer Price Index (CPI) for the month of May 2025 was announced on June 30, 2025, at 144.00, showing a modest rise of 0.50 points from 143.50 in April 2025.
Expected DA from August 1, 2025 (under 12th BPS)
The final DA increase will depend on the CPI figure for June 2025, which is yet to be released. Based on various assumptions, the tentative DA hike scenarios are as follows:
1. If CPI decreases by 0.50 points (June CPI = 143.50):
➤ Expected DA Increase: 0.67%
➤ Revised DA: 20.64%
2. If CPI remains unchanged (June CPI = 144.00):
➤ Expected DA Increase: 0.83%
➤ Revised DA: 20.80%
3. If CPI increases by 0.50 points (June CPI = 144.50):
➤ Expected DA Increase: 1.00%
➤ Revised DA: 20.97%
Why DA Matters for Bankers
For bank employees and officers, DA is a major component of monthly salary. Even a small percentage increase can translate into a noticeable hike in net income. It also affects pensions and benefits for retirees.
DA is not only a salary component but also a reflection of how inflation impacts the daily cost of living for employees.
Final DA to be Announced Soon
The June 2025 CPI will be released by the end of July 2025, after which the final DA percentage from August 1, 2025, will be officially confirmed.
Stay connected for further updates on DA, wage revisions, and banking news.
