Retirement
RBI asks banks to pay 8% interest for delay in crediting pensions

The central bank decided to delink the penal interest levied for delayed credit of pension, revised pension and arrears from the bank rate plus 2% and charge a fixed interest rate of 8% on such delays

The Reserve Bank of India (RBI) has asked all agency banks to compensate all pensioners, including non-state resident pensioners at a fixed rate of 8% for delay in credit of their pension, revised pension or arrears for the delayed period beyond due date.

Replying to a complaint filed by Commodore Lokesh Batra, the central bank issued these instructions to agency banks. Commodore Batra has complained about the delay in receiving revised pension of pre-2005 to defence commissioned officers and family pensioners.

 

Recently, the RBI aligned the bank rate, which was kept at 6% to the marginal standing facility (MSF) rate and at present stands at 9.5% and whenever there is an adjustment in MSF rate, the central bank would align bank rate accordingly, RBI said in a notification.

It said, “It has now been decided to delink the penal interest levied for delayed credit of pension, revised pension and arrears from the bank rate plus 2% and charge a fixed interest rate of 8% on such delays. The rate will be subject to review by RBI as considered appropriate”.

 

The central bank also directed all nationalised banks, IDBI Bank, ICICI Bank, Axis Bank and HDFC Bank to implement instructions issued by the Principal Controller of Defence Accounts (Pensions) in circular no500 on 17 January 2013 about revision of pension of pre-2006 defence commissioned officers and family pensioners.

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COMMENTS

A B Mehta

3 years ago

It is sad that the due has still not been cleared on 29 Apr and old rate pension has been credited. The problem is with the banks, particularly SBI. However to politicise it and ask soldiers and family members not to vote for UPA is ill advised.

abmehta

REPLY

balasubramanian

In Reply to A B Mehta 3 years ago

dont worry. Even till 18th may,the great SBI has not credited dr arrears. They have no control over their clomputer people

Commander P K Jain

3 years ago

The attitude of the concerned branches is that they have to receive orders from their respective controlling authorities and in this present state of governance when even directives from PM have no meaning as the wait is for the orders from the higher authority.....
Everyone seems helpless when it comes to giving out money to ex servicemen since it is considered as dole from the government due to the attitude of the govt.for the PM by the PM and of the PM

Commander P K Jain

Vinod Thakur

3 years ago

My father is a retired Central Railway Employee,he got retired in the period June 2012, at that time he got his due with arrears are still pending which is not yet been disbursed. So as per this article, my dad is eligible for an additional 8% fixed interest on arrears, which is been declared by RBI. Should I consult Bank Of India who takes care of all transaction related with my dad's account.

Ashok Chhibbar

3 years ago

If this non-payment was related to politicians or the bank personnel, a demand for the resignation of the Chairman of the Banks or perhaps the Finance Minister would have been demanded. Defence personnel are the last priority for anyone in this country. And they continue to suffer in silence.

V Mahalingam

3 years ago

Thanks to Cmde LK Batra he managed to get the RBI expedite the payment of dues to military pensioners. The Indian society’s attitude and apathy towards the Defence Services is visible from the response of the Banks in crediting the sanctioned legitimate dues of the soldiers. If that not be so, why would the banks which are meant to serve the people sit on the dues of the military? Those who fought the 62, 65, 71 and the numerous insurgencies in the country and their widows are today’s pensioners. They are old, some not very healthy, most without the support of their children who are away earning their livelihood. Shouldn’t the country not be sympathetic towards them and save them the ignominy and torcher of running around courts, government offices, unsympathetic bureaucracy and least of all the banks? Will the people of this country including the media take up this issue and do something to change the attitude of the people?

M G WARRIER

3 years ago

This move is a comfort for pensioners. The principle should be further extended with appropriate modifications in respect of various other categories of depositors and savers. Some banks have an ‘auto renewal’ facility for Fixed Deposits kept with them. Now that the country is moving aggressively towards financial inclusion and everyone having something to do with money will have a bank account, even before AADHAAR, it should be the aim to link any financial transaction to a bank account. Any payment, as and when it becomes due should get credited to the bank account of the client, if s/he has provided details of bank account. Delay in credit after due date and normal reasonable administrative delay (say, seven working days), should entitle the beneficiary to receive interest at rates comparable with those paid on long term savings.

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