Master Circular on Disbursement of Government Pension by Agency Banks
The Reserve Bank of India (RBI) has released a revised and updated Master Circular on the disbursement of government pensions by agency banks, consolidating key instructions up to March 31, 2024. This circular supersedes the previous version dated April 3, 2023, and provides comprehensive guidelines for agency banks tasked with pension disbursements to retired government employees, including basic pension, increased dearness relief (DR), and other benefits as per government schemes.
Key Highlights and General Instructions
To expedite service to senior citizens, the RBI has streamlined the process for forwarding government orders related to DR and other benefits to pension disbursing agency banks. These banks are now expected to act on copies of government orders received through post, fax, email, or by accessing government websites, authorizing their branches to make immediate payments to pensioners.
Agency banks must promptly implement government instructions without awaiting further directives from the RBI. Pension disbursements will be credited to pensioners’ accounts based on instructions from respective Pension Paying Authorities. Any excess or overpayment detected due to bank errors must be credited to the government account in lump sum immediately, independent of recovery from the pensioner.
In cases where the excess payment is due to government errors, banks should seek guidance from the respective government department for a quick resolution, maintaining proper records of government acknowledgments.
Withdrawal of Pension by Sick or Disabled Pensioners
Agency banks are instructed to facilitate the withdrawal of pensions for sick or disabled pensioners. These pensioners are categorized based on their ability to sign cheques or be physically present at the bank. For those unable to sign or be present, thumb or toe impressions identified by two independent witnesses, including a responsible bank official, are required. If even this is not possible, a mark on the cheque or withdrawal form, identified similarly, suffices.
Banks should display these instructions prominently to ensure that sick and disabled pensioners can fully utilize these facilities. They must also adhere to RBI instructions regarding facilities for these pensioners and refer to FAQs on pension disbursement on the RBI website for any doubts.
Customer Service and Reimbursement
Agency banks must issue instructions to their branches to adhere to the recommendations of the Prabhakar Rao Committee on pension payments. Internal auditors should assess the quality of customer service provided to pensioners. To address grievances effectively, banks should appoint nodal officers at each region/zone and establish toll-free dedicated pension lines.
To mitigate delays in pension disbursements, banks are advised to compensate pensioners at a fixed interest rate of 8% per annum for delays beyond the due date. This compensation should be credited automatically to the pensioner’s account on the same day as the revised pension or arrears.
By following these comprehensive guidelines, agency banks can ensure timely and efficient disbursement of pensions, addressing the needs and concerns of pensioners, especially the elderly and disabled.
