New Delhi, January 19 (). Due to the new labor laws (New Labor Codes) implemented by the Central Government in November 2025, employee expenses on private sector banks and insurance companies have increased. In the quarter from October to December 2025 of the financial year 2025-26, the operating expenses (Operating Expenses or OPEX) of these companies have been higher than before.
HDFC, the country’s largest private bank, recorded operating expenses of Rs 18,770 crore in the third quarter of the current financial year, compared to Rs 17,110 crore in the same quarter last year.
In an exchange filing, HDFC Bank said the new labor laws have resulted in an additional impact of approximately Rs 800 crore in employee costs for the quarter and nine months ending December 31, 2025. This effect is added to the profit and loss account.
The bank also said it is keeping an eye on the rules and clarifications from the central and state governments and will make further accounting changes if necessary.
Similarly, ICICI Bank said that due to the new labor laws, its profit and loss account has been impacted by about Rs 145 crore in this quarter.
Yes Bank has also added additional expenses of Rs 155 crore due to the new rules. Whereas, Federal Bank has made a provision of Rs 20.8 crore and RBL Bank has estimated additional expenditure of about Rs 32 crore.
Private sector insurance companies have also been affected by the new labor laws. HDFC Life Insurance has made an additional provision of Rs 106.02 crore for employee benefits, which has been deducted from the company’s total income.
ICICI Prudential Life Insurance has estimated the impact at Rs 11.04 crore and ICICI Lombard General Insurance has estimated the impact at Rs 53.06 crore.
In contrast, the pay structure of public sector banks was already quite close to the new rules, so they did not need to make any major changes or additional provisions in it.
According to analysts, there will be a change in the salary structure under the new labor laws. In this, the share of basic salary and some important allowances will increase. Due to this, employers will have to deposit more money in the gratuity and pension funds of their employees, which will increase the expenses of the companies.
On November 21, 2025, the Government of India had notified four new labor laws. These include the Wage Code 2019, Industrial Relations Code 2020, Social Security Code 2020 and Occupational Safety, Health and Working Conditions Code 2020. These are collectively called ‘New Labor Codes’, which combine the earlier 29 labor laws.
Last month, the Ministry of Labor and Employment had released draft central rules and frequently asked questions related to these new rules, so that companies can assess the economic impact of these changes. After this, banks and insurance companies have estimated additional expenses in their profit and loss accounts.
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DBP/ABM