India's Labour Codes Impact BFSI Sector's Earnings: Rs 1,500 Crore Cumulative Impact on Banks, NBFCs, Insurers

India's revamped labour codes have impacted the earnings of banks, NBFCs, and insurers, with a cumulative impact of about Rs 1,500 crore. HDFC Bank has taken the biggest hit, reporting an expense impact of around Rs 800 crore. Other lenders, such as ICICI Bank and Yes Bank, have also been affected, while state-run banks have been relatively less impacted due to existing bipartite wage settlements. The codes mandate a higher proportion of basic pay in total compensation, leading to increased statutory outgo on provident fund, gratuity, and leave encashment.