A complaint forwarded to the RBI by a retired government officer regarding SBI’s extensive delays in pension payments gets the central bank to take notice and undertake review of the lender’s systems
Moneylife had revealed yesterday (see here) that the Reserve Bank of India (RBI) has reprimanded pension-paying banks for delaying payments to pensioners and directed them to make good the dues immediately, along with penal interest.
It turns out that the reason RBI woke up is that 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.
This 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.
The Investigation Report finds that apart from the complainant, there were at least 1,800 non-state resident pensioners who were denied the revised pension payment for months together. 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 has advised these banks, 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 has 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 has 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 has 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.
The forecast for better rains this season comes after India witnessed one of the worst droughts in recent times when the monsoon had failed last year
The country will receive normal rainfall this season, the weather office announced today, much to the relief of millions of farmers who had to face the brunt of a drought last year, reports PTI.
Rainfall during the June-September southwest monsoon season is expected to be 98% of the Long Period Average (LPA), the India Meteorological Department (IMD) said.
The LPA of the southwest monsoon rainfall averaged over the country as a whole is 89cm. It is the mean of rainfall between 1941 and 1990. The forecast has a model error of 5%.
The forecast for better rains this season comes after India witnessed one of the worst droughts in recent times when the monsoon had failed last year.
A normal monsoon is necessary to power the Indian economy as over 235 million people depend on agriculture for livelihood.
Last month, the Geneva-based World Meteorological Organisation (WMO) said El Nino had peaked, but was expected to influence climate patterns up to mid-year before dying out.
El Nino, a key parameter in monsoon prediction, is an occasional seasonal warming of the central and eastern Pacific Ocean that upsets normal weather patterns from the western seaboard of Latin America to east Africa.
The country’s largest lender State Bank of India had exposure to the tune of $50 million, while Bank of Baroda had an exposure of $200 million at the time of the emirate’s debt crisis
The government today said that as many as seven banks in India, including SBI and ICICI Bank, had exposure worth $537 million in Dubai World and other group companies at the time of the emirate’s debt crisis in November 2009.
The exposure of the Indian scheduled commercial banks in India to Dubai World, Nakheel Reality and its group companies as on 30 November 2009, was $454.03 million for fund-based facilities and $82.94 million for non-fund based facilities, minister of state for finance Namo Narain Meena informed the Lok Sabha.
The country’s largest lender State Bank of India had exposure to the tune of $50 million, while Bank of Baroda had an exposure of $200 million.
Besides, private sector lender ICICI Bank had an exposure of over $28 million and HDFC Bank of $4.23 million.
Other foreign banks present in India with an exposure in Dubai are HSBC (about $44 million), Standard Chartered Bank (over $120 million) and Citibank ($86 million), Mr Meena said.
In November last year, the Dubai government-owned Dubai World had asked its creditors for six more months to repay its debts as asset prices were coming down.
Dubai World has total debts of $59 billion. This raised concerns over the financial health of the once financially strong emirate.
“The government is of the view that the recent global financial crisis has proved the soundness and resilience of our banking system, which has regained and sustained economic growth momentum in the country,” the minister added.
He added that Indian public sector banks are adequately capitalised and that they are maintaining higher Capital-to-Risk Weighted Assets Ratio (CRAR) to meet any additional provisioning requirement arising out of any unforeseen higher NPA slippages.