Bank employees’ family pension: Slab rate to be hiked to 30 percent? Modi govt considering proposal

Bank employees pension: Sitharaman also said that IBA as given no advice to bank authorities to update pension of bank employees in its 72nd AGM.

Representational image.

The Central government is considering a proposal to increase the slab rates of family pension for bank employees to 30 per cent, according to Finance Minister Nirmala Sitharaman.

“… IBA has recently (on 25.1.2021) recommended that family pension, which is currently payable at the slab rates of 15%, 20% and 30% for different categories of pensioners
with a cap of Rs. 9,284 per month, be improved to 30% for all employees without any cap, and the said recommendation is under consideration of the Government,” Finance Minister Nirmala Sitharaman told Rajya Sabha this week in a written reply to a query.

Sitharaman was asked whether it is a fact that pension of retired bank employees has not been revised for the past three decades and the Indian Bank Association at its 72nd Annual General Meeting (AGM) has advised the Bank authorities to update the pension.

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Replying to the question, the Finance Minister said that the pension of pensioners of nationalised banks is financed by the respective bank out of its commercially generated revenues. “Such pension was introduced as a funded scheme on the basis of consensus arrived at between bank employee unions/associations and the Indian Banks’ Association (IBA), which negotiated on behalf of participating banks.”

The Finance Minister said that the Boards of the respective nationalised bank have made Employees’ Pension Regulations in exercise of their powers under section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970/1980. “While the said regulations do not provide for revision of the pension fixed thereunder consequent upon the retirement of an employee, regulation 37 thereof provides for six-monthly revision in dearness relief on the basis of rise in All India Consumer Price Index for Industrial Workers,” she said.

As far as regulation 35(1)is concerned, the finance minister said that it applies only to employees “who retired between 1.1.1986 and 31.10.1987 and the updating referred to therein (in terms of certain formulae) only have effect on the initial fixation of their pension and does not entail any revision of pension so fixed.”

Sitharaman also said that IBA as given no advice to bank authorities to update pension of bank employees in its 72nd AGM.

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First published on: 05-02-2021 at 10:27 IST