Tuesday, January 11, 2011

RBI ON PENSION PAYMENT- Interesting letter from RBI

The bank is paid Rs 60.00 per month to credit your pension every month- thus 60x12 = Rs 720.00 per year is the earning by the bank to pay you pension. I suppose arrears crediting must be over and above this. So no bank is doing you a favour. The circular below says they should pay you 2% interest if there is delay. Claim it !!
RBI clamps down on banks delaying pension payout

April 22, 2010 08:07 PM
Sucheta Dalal with Sanket Dhanorkar

Central bank wakes up to inordinate delays in payments faced by government pensioners; reprimands bankers and directs them to make good the dues immediately, along with penal interest. In what could be a major victory for government pensioners awaiting pension payments, the country’s central bank, the Reserve Bank of India (RBI), has taken bankers to task for ‘inordinate delays’ in disbursing revised pension and arrears.

Taking a serious view of the matter, the RBI has issued a circular (dated 9 April 2010) to various banks with an exasperated tone, directing the concerned banks to ensure that all entitled pensioners are paid their revised pension or arrears within 15 days from receipt of the circular. Additionally, it has also advised the banks to make a penal interest payment of 2% for any delay beyond the due date.

The RBI was forced to take this tough stand after receiving several complaints from pensioners, especially State government pensioners, alleging inordinate delay in disbursing the revised pension and arrears. Under the 6th Pay Commission recommendations, RBI had advised pension-paying banks to put in place a suitable mechanism so that pensioners could get the benefits announced by the government in the succeeding month’s pension payment itself. The controlling offices or head offices of agency banks were also advised to closely monitor and supervise the timely and accurate disbursement of pension to the pensioners.

An RBI review of the pension payment systems in various agency banks revealed the true story behind the picture. The circular highlights RBI’s findings as follows:

“Even though Pension Relief Orders were issued by the respective State Governments, there is inordinate delay ranging from one month to 18 months at the Agency Bank level in disbursing the revised pension as also the pension arrears. The delay was more pronounced in the case of those State Govt pensioners residing outside their States drawing pension from Agency Bank branches. To be specific, non-State resident pensioners have not received adequate attention and timely receipt of the revised pension/arrears for months together.”

The circular goes on to highlight the discrepancies of banks in administering the pension payouts. “Our experience was that customer service on pension payment matters was not effective at the branch level where customers normally interface with the front office,” said the central bank’s communiqué. The RBI also makes note of the lack of coordination between the branches and Central Pension Processing Centres, as also the absence of transparency in the calculation of the revised pension or arrears.

In a tone that is vividly indignant, the RBI questions the concerned banks’ indiscretions. “Pension payment is an agency function entrusted to you for a commission @ Rs60 per transaction and an amount of Rs487 crore has been paid to Agency Banks on account of pension disbursements alone during the year 2008-09. Although this is a significant income generating activity, it appears that it is still not given the due importance that it deserves.”

In view of the above, the RBI has advised banks to undertake review of the system of attending to customer service and have a pension accounts guide at all branches to assist the pensioners in all their dealings with the bank. Additionally, RBI has demanded that suitable arrangements be made, to place on the bank website details about the pension calculations, and made available to the pensioners at periodic intervals with sufficient advertisements to that effect.

With the RBI finally wisening up to the reality and putting its foot down squarely on the Agency banks, they will have to take a deeper look at their archaic systems and make life easier for pensioners. As the RBI rightly puts it, “Pension is the lifeline of the pensioners and any delay in affording their legitimate dues will rob them of the dignity of life to which they are entitled to”.


  1. Sir,
    I, Subodh Kumar Sah, ex-serviceman, was drawing service and disability pension through SBI Cantt Branch Lucknow account No 10890865001 wef 01.04.2006.

    Now my disability pension and service pension has been discontinued wef Sep 2010 and Nov 2010 respectively. I have written so many letters to our bank as well as CPPC Allahabad and CDA(P) Allahabad, but they taken to it deaf hear.

    You are requested to take prompt action for release my pension as my whole family are facing financial hardship please.

    Thanking you, sir,

    Yours faithfully,

    Subodh Kumar Sah,
    Mob No 09406460770
    Dated : 22.01.2011

  2. Dear SK Sah,

    Kindly visit your pension officeand find out the exact problem of discontinuing pensions!

    One of the reasons for such discontinuation of pension in November is NON-SUBMISSION OF LIFE CERTIFICATE. The bank u mentioned is in Cantt area and the staff there are expected to know the procedures better.

    Try to rectify the shortcomings if any, from your side and still nothing happens, please ask/request your PDA/bank Manager to seek clarifications from CPPC and credit pension amounts. Please give a petition in writing. Hope your problems gets sorted out.

    Gavini VN

  3. sir,
    does ex. service men are given senior citizen benifits on fdr even if their age is below 60 years.

  4. vksharma146@gmail.comSeptember 3, 2011 at 4:18 PM

    sir may i have the no of circlar of rbi regarding interest on delay payment by banks

  5. Dear Sanjay,

    To get Senior Citizen status, one should have completed 60 years of age.

    Gavini VN

  6. Dear VK Sharma,

    Please click RBI Master circular on top right hand corner of this blog and go to item No. at Sl.No.40 (1) in the circular

    or alternately, log on to


    Gavini VN

  7. dear sir, 21 yrs service, 1996, suffring fm cervical sponylotis, low backack, 4&5 vrtybra # compression,it was sustaind during the ser case sheet still with me(x RAY), after 16 year i am more critical i e arthrites too, may i gat any disablities benyfit,or can i approch A F T,what is procedure.plz let me know. thanks,, sushil, med/asst

  8. d g r,sponcerd security agency, are totlly currupted, not passings the entitelment,benifits to all his employee jawans. a) many of agency do not deposits p f of jawane, many of them do not able to trf/withdrowe the amounts. B)w/off,w/holyday, payment not paid or no off, C) agency are running placement of service,D)esi benifits not extended.D)hra is not paid.dgr do not bother to monitor them,all agncy enjoy the privilages. sushil.

  9. i do not find such dated letter on the on the rbi site If any have this please post...

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