What is the New Special Allowance in Banks and why ?

Check out this interesting email from one bank union leader in Sriganganagar, Rajasthan about New Special allowance.

What is the New Special Allowance and why ?


A New Special Allowance has been included in the present wage revision @ 7.75 % of Basic . This allowance carries DA. Actually, this allowance is the most important value addition in Tenth BPS. Why ?

Remember, MoU says 2% loading on Basic Pay, after merging DA up to 4440 points of Consumer Price Index. The reason is, IBA had refused to take the resultant additional load on the Pension Fund and other Superannuation benefits on increasing the loading, because 60.15% DA merger itself would result in huge additional cost towards superannuation benefits.

Ultimately, after keen thought, UFBU decided to accept this stipulation of 2% loading.

After the MOU, UFBU & AIBEA continued the discussions with IBA. We continued our endeavor to give the best benefits to our comrades.

In this matter, we had two options.

· One, to formulate a sizeable HRA and Transport Allowance.

· Two, to think dynamically and find out an intelligent solution.

The first option would give good benefit, but it would be static. It will not have any self- improving feature. All along the past 69 years, AIBEA has always kept its eyes on the future. We rarely settled for short-term benefits in the long term wage-agreement. This time also we repeated our own history.


We could negotiate & prevail upon IBA to agree for an additional allowance, attracting Dearness Allowance, which would yield us long term benefit.

Please recall that when we signed the 9 th Bipartite in April 2010, the Consumer Price Index was 3895. Now it is 5790. Increase of 1895 points or 473 slabs. Suppose a minimum of 473 slabs increase for next 5 years, an amount of 1000 would become 1473. This is the advantage of DA linked allowance.

However, transport allowance or HRA or medical aid would simply remain stagnant. Hence our strategy is to get maximum long term benefits.

In effect, from another angle, we have got 9.75% loading in the place of 2% stipulated by MOU.

This is one of the chief highlights of the settlement. I request all youngsters to understand and appreciate the efforts and the foresight of our great Union.

Red salute to AIBEA.

Now, I have some questions for our leaders regarding Special Allowance:

1) Why HRA and Transport Allowance is not payable on this new special allowance, as is the case with central government employees?

2) Why this special allowance is being paid higher percentage to Scale IV, V, VI and VII officers?

See Also: 

Hidden Highlights of the Tenth Bipartite Settlement

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