For the convenience of senior citizen pensioners who have worked or are working for the government, the Reserve Bank of India (RBI) has issued various instructions to banks disbursing pensions that will help them sort common pension-related issues. The directives were issued in a master circular dated 2 July 2018.
Here are some common problems faced by individuals and the RBI directives to curb the occurrences:
PPO number on passbooks
All agency banks are advised by the RBI to record the PPO (Pension Payment Order) numbers on the passbook of pensioners/family pensioners.
This instruction was given after several complaints were made of situations where the pensioner or their family members faced difficulty due to the loss of PPO during the transfer of pension account from one bank branch to another or commencement of family pension to the spouse or dependent children after the death of the pensioner, etc.
A government employee is permitted to receive their pension in a joint account operated by pensioner with his/her spouse in whose favour an authorisation for family pension exists in the Pension Payment Order (PPO).
Existing pensioners can also avail the facility by submitting an application with the bank branch.
However, note the following:
- The government's/bank's liability ends once the pension has been credited to a pensioner's bank account, even if the spouse wrongly withdraws the amount.
- On the death of the pensioner, the bank should be intimidated within a month of demise, so that it stops crediting the account. The legal heirs, successors, executors, etc., shall be liable to refund any amount of the pension, which has been wrongly credited to the joint account.
- The spouse can opt to receive the family pension in the joint account after the pensioner's demise.
Updation of PPO for changes in amount of pension
Whenever there is a change in the basic rates or dearness relief on basic pension/family pension in both halves of the Pension Payment Order (PPO) concerned, it is the bank's responsibility to update it. RBI master circular states, "Whenever there is change in the basic rates of pension and/or dearness relief on pension, the paying branch shall call back the pensioner's half of the PPO and record thereon the changes, indicating, inter-alia, the date(s) from which the changes are effective. After this is done, those halves will be returned to the pensioners."
The banks are also instructed to give pension slips to the pensioners/family pensioners at the commencement of pension and thereafter, whenever there is a change in the quantum of pension.
It is therefore advisable to be aware of this when there is an increase in the extent of pension you will receive due to an increase in DA or from age benefit for those over 80 years.
Lag in updation of Dearness Relief
Pensioners have faced problems of delay in the increase of pension payment and it has sometimes taken months to update.
In this regard, the RBI has directed the banks to act on the copies of the orders supplied by the Government to the Head Offices and/or Regional Offices of authorised banks as soon as there is a revision in rates to ensure timely and correct disbursement of pension.
Pension payment dates
Payment of pension only on the last day of the month causes much hardship to pensioners as they have to wait in queue for a long time to collect their pension.
The RBI has now advised banks to disburse pension over the last four working days of the month, except for the month of March, which will continue to be credited on or after the first working day of April.
Nomination for arrears
Nomination forms ‘A' or ‘B' as the case may be, should be submitted by the Central Civil/Railway pensioners for the payment of arrears of pension to their heir(s).
Form A is for a fresh nomination request, whereas form B is for modifying an existing nomination. The banks also have to print the nominee's name on the front page of the account's passbook.