The Union Finance Ministry has decided to temporarily stop the implementation of the new Performance Linked Incentive (PLI) scheme for the financial year 2025–26. A PLI scheme is a system where bank staff get extra money or bonuses based on how well the bank performs. This decision came after Finance Minister Nirmala Sitharaman met with a delegation of bank employees, led by the Bharatiya Mazdoor Sangh, to discuss growing tensions in the sector.

The government has now moved the PLI discussions to the official Bipartite Settlement/Joint Note meetings. This means the rules for bonuses will be renegotiated between bank unions and management through face-to-face talks. The delegation also asked the Minister to look into other big issues like ex-gratia payments (voluntary payments made by the bank), better medical facilities for retired staff, and general concerns about the current PLI structure in Public Sector Banks (PSBs).

This delay happens at a time when bank unions are very angry. The United Forum of Bank Unions (UFBU) had already announced a calendar of strikes to protest against the government's revised PLI formula and the delay in moving to a five-day banking week. A one-day strike was planned for September 11, followed by a three-day strike from September 28 to September 30. The unions even threatened an indefinite strike starting October 26 if their demands were not met.

The history of this dispute goes back several months. A strike planned for March 2025 was put off after the Chief Labour Commissioner asked the Indian Banks’ Association (IBA) and the unions to talk about changing the PLI rules. However, the unions claim the government ignored these talks and ordered banks in March 2026 to start using the new formula anyway. This led to a legal case in the Delhi High Court which is still not finished.

The situation became even more tense on August 21, 2026, when the Department of Financial Services told banks to go ahead with the implementation. Unions argued that this order broke the rules of the Industrial Disputes Act, which says things should not change while a dispute is being handled by the Labour Commissioner. By pausing the scheme now, the government hopes to avoid a total shutdown of banking services across the country.

For bank officers and staff, this means the old system will likely continue while new terms are discussed. The government says it is committed to finding a solution through dialogue that helps both the employees and the customers. Bankers should watch for updates from the Bipartite Settlement meetings, as these will decide how much extra money you might earn from bank profits in the coming years.