Banks must follow rules on excess recovery from retirees

Here's a an extract from THE HINDU MUMBAI Edition today MUMBAI, March 18, 2016

RBI Stating that it is receiving complaints from pensioners against the lenders’ attitude regarding collection of excess or wrong payments, RBI on Thursday asked banks to strictly adhere to the relevant rules. “We have been receiving complaints from pensioners stating that the recovery of excess/wrong pension payments are being made in a manner that is not in keeping with the extant guidelines,” RBI said in a notification.

The regulator asked the banks to follow the relevant guidelines on this formulated in 1991 while dealing with such excess payments. As soon as the excess payment comes to the notice of the bank, it should adjust the same against the amount standing to the credit of the pensioner’s account to the extent possible, including lump sum arrears payment. Where the entire amount of over payment cannot be adjusted from the account, the pensioner may be asked to pay forthwith the balance of over payment. If the pensioner expresses inability to pay the amount, the same may be adjusted from the future payments to be made to them, it said.

—PTI