Pension payouts: SBI wakes up after RBI rap

Pinched by RBI’s scathing criticism of the inordinate delays in pension payouts to its customers, the state-run lender has put up advertisements in leading dailies, saying ‘We care for you’

Four months after Moneylife had reported that the Reserve Bank of India (RBI) had cracked down on the country's largest lender State Bank of India (SBI) and other banks for the inordinate delays in payments faced by government pensioners, SBI has issued an advertisement in leading newspapers that seeks to put customers' worries to rest, asking them to avail of its free helpline services for all pension-related queries.

Earlier, RBI had raised an alarm after 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. Moneylife had written about this development.

(See: 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.

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 had advised these banks (through a circular dated 9 April 2010), 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 had 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 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 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.

RBI sources told Moneylife, "We had asked SBI to look into 1,400 cases where the amount involved was to the tune of Rs30 lakh. These have been satisfactorily dealt with by the bank. SBI makes the largest payouts of pension funds in the country. We are happy that SBI is making efforts to strengthen its customer services."

SBI's advertisement requests customers to call at their helpline number for all pension-related information, including basic and dearness allowance for the past six months, arrears received and commutation. The advertisement also mentions that a pensioner can also register a complaint online by logging on to and filling up the Customer Complaint Form. A Complaint Registration Number will be issued to the complainant.



Ashish kumar gupta

5 years ago

TO, Dated: 08-2-2012
MUMBAI – 400021.

Respected Sir,
Sub: - Request to refund my debit amount 28 rupee for withdrawn from GCC.
Ref: - debited date dated on 07.02.2012
Uttar pradesh.
I want to inform you Iam Ashish kumar gupta a customer of SBI gwaltoli branch, kanpur U.P on 07/02/20012 idebit 5000 rupees from GCC at counter of Dharmshala bazar , gorakpur branch code 7896 Rs. 28 shall be deducted from my account, which should be painful for me it means that GCC counter act as a blady parasite for customer if no then what should be does helpful for customer .
28 rupees deduct weather customer deposited or with draw from his/her account.
so please take action on GCC channel which givemuch pain to your coustomer.
Thanking you.
Yours faithfully,
Ashish kumar Gupta (9889870986)
SBI, Gwaltoli,Kanpur branch.


7 years ago

Defintely banks are required to attend to the needs of the pensioners.banks are getting Rs60/- per pension payment entry from the respective departments.private banks like icici are also now entering into pension payment because of this RS60/- commisiion.if empathy is practised while dealing with pensioners' matters all the problems can be solved and more so bankers will get the whole hearted blessings from our senior citizen pension. they are flag bearers of our country's heritage,culture and tradition.bankers can feel proud if they serve the pensioners' to thier satisfaction.i am a defense pensioner now working in govt bank.i know both the sides of the coin in pension matter.all govt banks should take the RBI directive in a proactive way serve the pensionsers.otherwise because of the govt commssion this pension business itself is going to be in the hands of high tech private banks in near future.

K Narayanan

7 years ago

I am not a votary of govt banks.But look at the strain on SBI and other nationlised banks on account of pension payments.These pensioners excepting a few hardly keep any money in the bank.The min balance can be as less as Rs10.You try enter any nationlised bank having pension accounts on the 1st of any month.The office would be overcrowded with pensioners all coming at the same time to draw pension.Even if I am willing to give a fixed deposit for Rs 1 lac the branch staff do not care for me.
The bank gets a nominal amount for the pension payment.It is more a social obligation.But the govt allows new generation banks to take away cream of the business taking advantage of the societal obligation of these bank.Still SBI gives a run for the money to the gen next banks by offering teaser housing loan and fast disbursal of the loan.Even MrDeepak Parikh stooped to the level of commenting that the bank was misleading the public.Still SBI is able to compete with the pvt banks in all aspects.The share price is zooming.Instead of strengthening the infrastructure of these govt banks,the RBI is planning to give license to pvt sector to take away the creamy business from govt banks and with 74% FDI.Who will benefit.?



In Reply to K Narayanan 7 years ago

I wonder which planet Mr Narayan comes from. I am sure you have heard of the concept of Universal Service Obligation! that is all that the nationalised banks are doing in this case. Dont forget nationalised banks are frequently capitalised at public expense when they run up losses to curry favour with politicians or fund dubious industrial projects or the likes of Ketan Parekh etc (remeber Bank of India?)
If all that money wasted if fine, why grudge the concessions given to pensioners? Dont forget they are your parents and elders too. More importantly, most of them would have paid taxes at the highest and most ridiculous levels and are struggling to cope with galloping inflation. It is sad... in fact tragic that there are people who think like you. I am sure State Bank of India, for whom your heart is bleeding, wastes a lot of money of needless expenses... like say expensive gifts for all the parliamentary committees that visit the bank. Let it spend some money for pensioners too. BUT at all costs let it treat them well. There has to be a price attached to being BANKER TO THE NATION!!

K Narayanan

In Reply to asim 7 years ago

You are reading me wrong MrAsim.I am not telling that the govt banks shd not disburse pension.You agree that they are rendering noble service to the old people.They have also opened thousands of braches in the rural areas to take care of the farmers and other villagers where service was the idea and not profit.I am only telling that the govt shd strengthen the infrastructure of these banks to offer the service and at the same time take into consideration the other side of the business of these commercial banks.But look at what govt is doing.In the name of efficiency and serving larger customers they have doled out licenses to pvt sector banks where almost 74%of the share holding is by FIIs and FDI.The share price of these banks are zooming and also the profits and the loot is taken away by these foreigners like Britishers taking away the raw material like cottom and iron ore and selling finished products.Again RBI wants to give license to the pvt sector with sizeable foreign investment to loot us -indirectly by way of dividend and zooming stock price.As far as Ketan Parikh is concerned it was GTB headed by Gelli who looted the bank and the govt bailed out the bank by merging with govt bank OBC-at public cost.What Bank of India did was purchasing the pay orders (bankers cheque issued by some cooperative bank) and they are not direcrtly involved.Any way let the pensioners and farmers get service from govt banks and let the cream of other business go to pvt players like HDFC bank,ICICI bank and AXIS bank etc,enabling foreiners to loot us. (excepting a few share holders who are Indians-which is good)

ONGC to start gas production from KG Basin block in 2016-17

New Delhi: State-owned Oil and Natural Gas Corporation (ONGC) will start producing natural gas from a block that sits next to Reliance Industries' (RIL) prolific KG-D6 fields in the Bay of Bengal in 2016-17.

Minister of state for petroleum and natural gas Jitin Prasada today informed the Lok Sabha that in-place gas reserves of 3.42 trillion cubic feet have been established in block KG-DWN-98/2, in the Krishna-Godavari basin.

Of this, 1.904 trillion cubic feet (Tcf) is recoverable.

"ONGC has submitted Declaration of Commerciality (DoC) for the Northern and Southern Discovery Area in the block," he said.

Seven of the finds are in the northern part of the block, where Cairn India holds a minority 10% stake. Gas from these is proposed to be produced by combining them with two other gas discoveries in the adjacent block, he said.

"The DoC is under examination in the Directorate General of Hydrocarbons (DGH)," he said.

While Mr Prasada did not indicate the expected production from the block, company sources said 25-30 million standard cubic metres per day (mmscmd) of gas can be produced by 2016.

Once the DGH approves the commercial viability of the finds, ONGC will make a formal field development plan (FDP) outlining the specifics of producing gas from the find.

ONGC has tentatively pegged the investment required for bringing to production the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in the Northern Discovery Area (NDA) of the block at over $5 billion, sources said.

As the discoveries are not independently viable, the firm plans to tie them with finds in the neighbouring acreage and develop them as a cluster. ONGC envisages 25-30 mmscmd of output from the NDA fields and G-4 and GS-29 finds in the neighbouring acreage by 2016.

ONGC's KG-DWN-98/2 block sits next to the prolific KG-D6 block of Reliance Industries in the Krishna-Godavari basin, off the East Coast.

The state-owned company had a few months back put an investment requirement of $4.05 billion for producing natural gas from the ultra deep sea UD-1 discovery in the southern part of the KG-DWN-98/2 block.

Sources said UD-1 is being planned to be developed separately and together with the NDA fields, ONGC's total spending would be in the region of $10 billion.

Sources said ONGC has so far drilled a total of 13 exploratory wells in the 7,294 sq km block, which is divided into northern and southern appraisal areas.

The Northern Discovery Area (NDA) consists of the Padmawati, Kanakadurga, Annapurna, N-1, D/KT, U, A, W and E gas finds in water depths ranging from 594 metres to 1,283 metres. The Southern Discovery Area consisting of the UD-1 discovery falls in ultra-deepwater with a depth of 2,841 metres.


Finance, labour ministries lock horns on investing EPF money in stocks

New Delhi: Whether or not a part of an estimated Rs5 lakh crore of employees provident fund (EPF) should be invested in the stock markets has become a bone of contention between the ministries of labour and finance, reports PTI.

While the finance ministry wants the labour ministry to work on investing about 15% of the Employees' Provident Fund Organisation (EPFO) money in stock markets for better returns without taking the issue to the PF trustees, the latter has decided to do otherwise.

Whereas the EPFO commands a corpus of Rs3 lakh crore, other provident funds, which follow the fund's investment pattern, have another Rs2 lakh crore.

In a letter to labour secretary P C Chaturvedi, finance secretary Ashok Chawla referred to the changes by EPF schemes earlier without any discussion in the Central Board of Trustees (CBT) and said, "It (labour ministry) can take a similar view on the issue of investment pattern."

However, the labour ministry has forwarded the letter to EPFO to take a view on the matter.

CBT is an apex decision making body for EPFO and is likely to meet on 10th September to take up the issue.

The finance ministry wants the labour ministry to follow investment pattern notified by it, which provides for up to 15% of the corpus in stock markets.

However, CBT's advisory body Finance and Investment Committee (FIC) yesterday stuck to its stand against investment of EPFO money into stock markets — either in shares or indices.

In his letter, Mr Chawla sought to remind the labour ministry that it used to adopt the investment pattern notified by the ministry of finance for many years.

"However, the ministry of labour has not adopted the investment pattern notified by the ministry of finance in January, 2005 and November, 2008 and investment pattern of the labour ministry continues to be the same which was earlier notified in July, 2003," the letter said.

Favouring the stand of no investment in stock markets, EPFO said at the FIC meeting yesterday that while investment in stock markets is subject to market volatility, "there is no risk of capital erosion in the case of EPF investments."

It also countered the finance ministry's claim that the New Pension System (NPS), which has an option to invest in stock markets, is giving better returns than EPF.

The finance secretary said in his letter that while NPS for central government employees could generate a weighted average investment return of 14.82% for the central government employees in 2008-09, EPF is giving only 8.5% returns to its subscribers for many years.

The EPFO has been giving 8.5% returns to its subscribers since 2005-06.

Countering Mr Chawla's views, EPFO said the income earned on EPF investments are actually realised, while the returns declared in NPS are notional and subject to market conditions.

This is so because, said EPFO, the returns generated under NPS are based on net asset value while the returns declared by EPFO are based on actual coupon received on its investments.


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