Payment of Pension to Government Pensioners under the various schemes for payment of pensions through Public Sector Banks

Master Circular- Disbursement of Pension by Agency Banks

Introduction


The payment of pension to retired Government employees is governed  by the relevant Schemes prepared by concerned Ministries/Departments with the approval of Controller General of Accounts, Ministry of Finance, Government of India or by State Governments and involves payment of basic pension, increased Dearness Relief and other benefits as and when announced by the Governments. Various circulars issued in this connection are summarized hereunder for information. 
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1.Disbursement of Central Government Pension through Public Sector Banks-Issue of Pension Slips to Defence Pensioners:


(Ref. DGBA.GAD. H-17663/45.05.031/ 2006-07 dated June 12, 2007)


It has been decided in consultation with the Office of Chief Controller of Defence Accounts and the Department of Ex-Servicemen welfare, Ministry of Defence to issue pension slip to Armed Forces Personnel/ Defence Civilian pensioners including family pensioners on par with the existing system as applicable to Central Government Pensioners (Civil). All the agency banks were advised to issue suitable instructions to their pension paying branches.
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 2.Acceptance of nomination in form ‘A’ and ‘B’- Central Civil Pension (Ref: DGBA. GAD. No.H-94/45.05.031/2004-05 dated August 24, 2004)


With a view to redressing inconvenience to the pensioners and their heirs, it has been advised by the Government that all pension paying bank branches should accept nomination in form ”A” or “B” as the case may be, submitted by the pensioners for the payment of arrears of pension to the heirs.
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3.Payment of pension through Authorised Banks-Credit of Pension to Joint Bank Account operated by a pensioner with his/  her spouse.


(Ref.DGBA.GAD.No.H-2134/45.02.001/2006-07 dated August 4, 2006)


Ministry of Defence and the Principal Controller of Defence Accounts have modified the scheme for payment of pension permitting credit of pension also to a joint account operated by pensioner with his/her spouse in whose favour an authorization for family pension exists in the Pension Payment Order (PPO).  The joint account of the pensioner with the spouse could be operated either by 'Former or Survivor' or 'Either or Survivor' basis subject to the following terms and conditions :


(a) Once pension has been credited to a pensioner's bank account, the liability of the government/Bank ceases.  No further liability arises, even if the spouse wrongly draws the amount.


(b) As pension is payable only during the  life of a pensioner, his/her death shall be intimated to the bank at the earliest and in any case within one month of the demise, so that the bank does not continue crediting monthly pension to the joint account with the spouse, after the death of the pensioner.  If, however, any amount has been wrongly credited to the joint account, it shall be recoverable from the joint account and/or any to her account held by the pensioner/spouse either individually or jointly.  The legal heirs, successors, executors etc. shall also be liable to refund any amount, which has been wrongly credited to the joint account.


(c) Payment of Arrears of pension (Nomination) Rules 1983 would continue to be applicable to a Joint Account with the pensioner's spouse.  This implies that if there is an 'accepted nomination' in accordance with rules 5 and 6 of these Rules, arrears mentioned in the rules shall be payable to the nominee.


Existing pensioners desiring to get their pension credited to a joint account as indicated above are required to submit an application to the branch bank, from where they are presently drawing pension in the prescribed form.  This would also be signed by the pensioner's spouse in token of having accepted the terms and conditions laid down in this Office Memorandum. These instructions are also applicable to the Government Servants who will be retiring after the issue of this Office Memorandum.
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4.Disbursement of Central Government Pension through Public Sector Banks-Issue of Pension Slips to Defence Pensioners:


(Ref. DGBA.GAD. H-17663/45.05.031/ 2006-07 dated June 12, 2007)


It has been decided in consultation with the Office of Chief Controller of Defence Accounts and the Department of Ex-Servicemen welfare, Ministry of Defence to issue pension slip to Armed Forces Personnel/ Defence Civilian pensioners including family pensioners on par with the existing system as applicable to Central Government Pensioners (Civil). All the agency banks were advised to issue suitable instructions to their pension paying branches.
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 5.Refund of overpayment of pension to the Government Account.


(Ref.DGBA.GAD.No.H-10450 /45.03.001/2008-09,dated June 1, 2009)


Government of India have advised us that the overpayments of pension made by the banks are not credited back to Government account by the banks in lump sum but are remitted in installments as and when recovered from the pensioner. As this causes  loss to the Government, all agency banks have been advised that whenever any excess / overpayment  is detected the entire amount thereof should be credited to the Government account in lump sum immediately.
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6.Pension Payment to central/ State Govt. Pensioners by agency Banks-Delay


(Ref.Do.No.CSD.CO/ 8793/13.01.001/2009-10 dated April 09, 2010)


Reserve Bank of India is receiving several complaints from the pensioners alleging inordinate delay in disbursing the revised pension and arrears. Position was reviewed by RBI and our Customer Service Department has issued instructions to the agency banks as under :


i) Pension paying banks should compensate the pensioner for the delay if any in crediting the pension/ arrears thereof by paying compensation at Bank Rate plus 2% penal interest for the delay after the due date automatically without waiting for any claim from them. This is applicable to all delayed pension payments made since October 1, 2008.


ii) System of attending to customer service including pension payments may be reviewed.


iii) The branch continues to be a point of referral for the pensioner lest he/she feel disenfranchised.


iv) all branches having pension accounts should guide and assist the pensioners in all their dealing with the bank.


v) suitable arrangements are made to place the arithmetic and otherdetails about the pension calculations on web, to be made available to the pensioners through the net or at the branches at periodic interval as may be necessary and sufficient advertisement  is made about such arrangements
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