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 the 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”.
SBI is the source of RBI’s wrath on delayed pension payments
Moneylife had revealed in above article that the Reserve Bank of India (RBI) has reprimanded pension-paying banks for delaying payments to pensioners and directed them to make good the dues immediately, along with penal interest.
It turns out that the reason RBI woke up is that a complaint was forwarded by a former highly-placed government officer to the deputy governor of the central bank, outlining the shoddy service given by the country’s largest lender, State Bank of India (SBI), in the form of extensive delays in pension payments.
This former officer had apparently been kept waiting unsuccessfully for ten months to receive his revised pension under the Sixth Pay Commission. This complaint forced the RBI to take a deeper look at the systems put in place by SBI for pension payments. A joint team drawn from both RBI and SBI investigated the matter and found various discrepancies in the way things were being administered.
The Investigation Report finds that apart from the complainant, there were at least 1,800 non-state resident pensioners who were denied the revised pension payment for months together. Taking a serious view of the matter, the RBI has put in a strongly worded letter to the chairman of the bank questioning the lack of customer sensibility despite being a premier bank in the public domain. It has pointed to the absence of an effective system of customer service at the branch level where pensioners normally interface with the front office.
This also forced the RBI to inspect the system at other Agency Banks making pension payments. The findings were more or less the same across all Agency Banks.
In view of the above, the RBI has advised these banks, including SBI, 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, the 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.
As with the other banks, RBI has demanded that SBI make the payment of the revised pension and arrears within 15 days from the date of receipt of its communication to that effect. Additionally, it has also advised the bank to make a penal interest payment of 2% for any delay beyond the due date, which is to be credited to the pensioner’s account automatically without any claim from the pensioner on the same day when the bank affords the credit for revised pension or arrears.
Welcome to Silver Innings Blog, Good Day
Powered by IP2Location.com
The content of this Blog, including text, graphics, images, information are intended for General Informational purposes only. Silver Innings Blog is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date.The links provided on this Blog do not imply any official endorsement of, or responsibility for, the opinions, data, or products available at these locations. It is also the user’s responsibility to take precautionary steps to ensure that information accessed at or downloaded from this or linked sites is free of viruses, worms, or other potentially destructive software programs.All links from this Blog are provided for information and convenience only. We cannot accept responsibility for sites linked to, or the information found there. A link does not imply an endorsement of a site; likewise, not linking to a particular site does not imply lack of endorsement.We do not accept responsibility for any loss, damage or expense resulting from the use of this information.Opinions expressed by contributors through discussion on the various issues are not necessarily those of Silver Innings Blog.