RBI Advises Banks To Pay 8 Per Cent Interest For Delay In Pension Disbursement

Issuing an advisory to all government pension paying banks, the Reserve Bank of India in its master circular has asked to compensate pensioners, at a fixed rate of 8 percent per annum in case of any delay in disbursement of pension, revised pension or pension arrears for the delay from the due date, reports ET. The central bank also directed pension paying banks to put in place a mechanism to immediately obtain the copies of pension orders from the pension paying authorities directly and make payments without waiting for receipt of instructions from the Reserve Bank.

The advisory comes amid increasing complaints of the pensioners regarding delay in crediting pensions and arrears. Regarding the delay in disbursement on pension, the RBI circular states—

• Pension paying banks should compensate the pensioner for delay in crediting pension/ arrears thereof at a fixed interest rate of 8 per cent per annum for the delay after the due date and the compensation shall be credited to the pensioner's account automatically without any claim from the pensioner on the same day when the bank affords credit for revised pension/ pension arrears, in respect of all delayed pension payments made since October 1, 2008.
• The branch should continue to be a point of referral for the pensioner lest he/she feel disenfranchised.
• All branches having pension accounts should guide and assist the pensioners in all their dealings with the bank.
• Suitable arrangements should be made to place the arithmetic and other details about pension calculations on the web, to be made available to the pensioners through the net or at the branches at periodic interval as may be necessary and sufficient advertisement is made about such arrangements.
• All claims for agency commission by banks in respect of pension payments must be accompanied by a certificate from ED/CGM in charge of government business that there are no pension arrears to be credited/ delays in crediting regular pension/arrears thereof.
• All agency banks disbursing pension are advised to provide considerate and sympathetic customer service to the pensioners, specially to those pensioners who are of old age.