PSB Performance-Linked Incentive Scheme Put on Hold

The Union Government has decided to keep the Performance-Linked Incentive (PLI) Scheme for Public Sector Bank (PSB) employees in abeyance for FY 2025–26, following concerns raised by employee representatives over the existing incentive framework. 

The decision followed a meeting between Finance Minister Nirmala Sitharaman and a delegation representing employees of public sector banks. The delegation, led by the Bharatiya Mazdoor Sangh (BMS), sought a review of the incentive structure and also raised issues concerning ex-gratia benefits and medical facilities for retired employees.

The government’s decision relates to the PLI framework issued by the Department of Financial Services in November 2024. Instead of withdrawing the scheme, its implementation for 2025–26 has been temporarily suspended, with the matter to be considered during ongoing Bipartite Settlement and Joint Note discussions. 

Employee organisations have raised concerns over differences in the potential incentive benefits available across various staff categories. The issue has become an important part of broader discussions on employee welfare, performance-based remuneration and industrial relations in the banking sector. 

From a governance perspective, the government’s move highlights the importance of stakeholder consultation, institutional dialogue and consensus-based policymaking in implementing reforms affecting a large public-sector workforce. The Finance Ministry has reiterated its commitment to resolving the matter through dialogue and mutual understanding, keeping the interests of employees, customers and the banking system in view.