Central Government pension payment by banks: RBI clarifies 8 issues for retired employees

The payment of pension to retired government employees is governed by the relevant schemes prepared by the central and state governments. The pension is, however, credited to pensioners through authorised banks, who have to follow the central bank’s instructions provided in its “Master Circular - Disbursement of Government Pension by Agency Banks”.

1. Payment of Dearness Relief at revised rate

As per the RBI, banks have to decide the revised DR payment based on the following:

• Copies of government orders provided by the government to them through post, fax, email, or,
• By accessing the information from the website of the concerned governments

2. Life Certificate submission

Pensioners can submit life certificates without visiting the branch using Jeevan Praman, provided the Pension Sanctioning Authority is also onboarded on the platform.

RBI has also advised banks to provide super senior citizens (pensioners over 70 years of age) and differently abled or infirm persons (having medically certified chronic illness or disability), including those who are visually impaired, the facility to submit the life certificate at their premises/residence.

3. Joint account continuation after the pensioner's death

"The family pension should be credited to the existing account without opening a new account by the family pensioner for this purpose," the RBI said.

The Central bank has also said that banks should not insist on the opening of a new account in case of Central Government pensioners if the spouse, in whose favour an authorisation for family pension exists in the Pension Payment Order (PPO), is the survivor.

4. When is pension credited?

Banks have to credit the pension per the instructions given by the Pension Paying Authorities.

5. Excess pension payment

In case of excess pension payment credited to a pension, the RBI has requested banks to seek guidance from the respective Pension Sanctioning Authorities on the process for recovering the extra pension.

Further, if excess payment has been made due to a mistake by the bank, then the extra amount should pe refunded to the Government immediately, without waiting for any recovery from the pensioners.

6. Acknowledgement of Life Certificates

RBI has instructed banks to issue duly signed acknowledgements on receiving life certificates from pensioners. Banks may also provide digital acknowledgement in respect of digital life certificates.

7. Compensation for delayed pension

RBI said pension paying banks should compensate the pensioner for delay in crediting pension/arrears at 8% per annum after the due date of payment. This compensation should be automatically credited to pensioners' accounts without any claims from them.

8. Pension payment to sick/disabled pensioners

RBI has provided detailed instructions to banks for the payment of pension to sick and disabled pensioners, who cannot visit the bank branch or are unable to sign or put toe/thumb expressions. In these cases, the bank can assign its official, preferably from the same branch, to obtain a mark on the cheque/withdrawal forms, in the presence of two witnesses, one of whom should be a responsible bank official.