The Indian Banks’ Association (IBA) has announced that Bank Employees Get DA Hike from August 2025 and pensioners for the quarter August to October 2025. This revision is based on the average Consumer Price Index for Industrial Workers (CPI-IW) for April–June 2025.
Here’s everything you need to know about how much DA has increased, when it will be effective, its comparison to previous quarters, and what it means for your salary or pension.
What is Dearness Allowance (DA) for Bank Employees?
Dearness Allowance is paid to bank officers, workmen, and pensioners to offset the impact of inflation on living costs.
- Reviewed every quarter – January–March, April–June, July–September, October–December.
- Calculated using the CPI-IW index, as per the latest Bipartite Settlement.
- DA varies for different settlements (XII BPS, XI BPS, and earlier).
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When Will the New DA Hike Be Effective?
The revised DA is effective from 1 August 2025 and will remain in force until 31 October 2025. Employees will receive the new rate in their August salary, paid at the end of the month.
How Much is the New DA?
For the quarter August–October 2025:
- Workmen & Officers under XII BPS: 21.13% of pay (up from 19.97%)
- Officers under XI BPS: 54.67% of pay
Comparison of Recent Bank DA Rates
| Quarter | CPI-IW Avg | DA Rate (XII BPS) | Change | XI BPS Rate |
|---|---|---|---|---|
| May–Jul 2025 | 143.29 | 19.97% | — | 53.29% |
| Aug–Oct 2025 | 144.16 | 21.13% | +1.16 pp | 54.67% |
DA Hike Trend (2024–2025)
| 2024 | 16.39% | 17.76% | 18.84% | 19.97% |
| 2025 | 19.97% | 21.13% | — | — |
Latest DA Chart (Official)
Official Link of IBA- DA Hike for bank employee
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Impact on Salary
The DA hike directly increases the gross monthly salary of employees and the Dearness Relief (DR) for pensioners.
Example Calculation (XII BPS Officer, Basic Pay ₹50,000):
- Old DA (19.97%) = ₹9,985
- New DA (21.13%) = ₹10,565
Increase = ₹580/month (excluding HRA/other allowances linked to basic pay)
Why the August 2025 DA Hike Matters for Bank Employees
The August 2025 DA hike is more than just a routine adjustment—it directly impacts the financial well-being of lakhs of bank employees and pensioners. With inflation steadily rising, the revised rate helps offset increased living costs, ensuring that salaries retain their real value. For employees under the XII BPS, the jump to 21.13% means a noticeable improvement in take-home pay, while XI BPS employees also benefit from a higher percentage. Pensioners see similar relief through enhanced Dearness Relief (DR). This quarterly revision is a critical part of the bank wage structure, safeguarding employees’ purchasing power year-round.
DA for Bank Pensioners (Aug 2025 – Jan 2026)
DA for pensioners varies by retirement date:
| Retirement Period | DR Rate |
|---|---|
| On/after Nov 1 2022 | 21.13% |
| On/after Nov 1 2017 | 54.74% |
| On/after Nov 1 2012 | 126.00% |
| On/after Nov 1 2007 | 249.15% |
| On/after Nov 1 2002 | 323.64% |
| On/after Jan 1 1986 | 1,487.40% |
❓ FAQs on Bank DA Hike – Aug 2025
1. What is the new DA rate for bank employees?
For Aug–Oct 2025, DA is 21.13% (XII BPS) and 54.67% (XI BPS).
2. When will the increased DA be paid?
It will be reflected in the August 2025 salary.
3. How often is DA revised for bank employees?
Every three months, based on CPI-IW data.
4. Does the DA hike apply to pensioners?
Yes, as Dearness Relief, calculated according to the retirement date.
5. Why is XI BPS DA higher than XII BPS DA?
Because the base index and calculation formula differ between settlements.
Key Takeaways
- DA increased by 1.16 percentage points for Aug–Oct 2025.
- Employees: 21.13% (XII BPS), 54.67% (XI BPS).
- Pensioners: DR varies, highest for pre-1986 retirees.
- Based on average CPI-IW of 144.16 for Apr–Jun 2025.
- Quarterly revision cycle — next hike due November 2025.