5 RBI directives on pension payment that can help government pensioners 

Knowledge of these instructions may help you in getting your pension-related problems resolved faster. Let us look at five issues commonly faced by pensioners.

Advantages of Government Pensioner opening a joint bank account to receive pension in a joint account or do you have to open a separate account to receive family pension? Did you know that banks have been asked to record the Pension Payment Order (PPO) number on the bank account passbook and that you can ask them to issue pension slips?

To ensure that senior citizen pensioners of the government do not have to run from pillar to post to get their pension-related issues sorted, the Reserve Bank of India (RBI) has issued various directives to pension-disbursing banks via a master circular on this subject. The master circular was released on July 2, 2018.

Knowledge of these instructions may help in getting your pension-related problems resolved faster. Let us look at five issues commonly faced by pensioners:

1. Credit of pension in a joint account

Government employees who are about to retire or those who have already retired can have their pension credited to a joint account. However, this joint account must be operated with the spouse in whose favour an authorisation for family pension exists in the PPO.

This means that you (i.e., the pensioner) cannot receive your pension in any other jointly held bank account except for the one held with your spouse whom you have nominated to receive family pension after your death.

The savings bank account can be operated either on 'Former or Survivor' or 'Either or Survivor' based on the following terms and conditions:

a) After the credit of pension in the pensioner's bank account, the government or bank will not be liable for wrongly withdrawn amount by the spouse.

b) The bank must be informed of the death of the pensioner within a month. If any excess pension has been credited to the joint account post the death of the pensioner, then it shall be recovered from the joint account or any other account held by the pensioner/spouse either i individually or jointly. Even the legal heirs, will be liable to refund any amount wrongly credited.

c) If any arrear of pension is pending, the same will be credited to the joint account with the pensioner's spouse.

In case of death of the pensioner, the bank cannot insist that the spouse open new a bank account for the credit of family pension. The spouse can opt to receive family pension in the existing joint account.

2. Recording PPO in the bank's passbook

RBI has advised pension paying banks to record the PPO number in the bank accounts of pensioners and family pensioners in which pension is credited. This will help pensioners avoid many problems which are generally faced in case of loss of the original PPO.

PPO is an important document because government pensioners, including family pensioners, are required to mention this number while submitting life certificate in November every year. Non-submission of life certificate to the pension paying branches can result in your pension being stopped.

Other common problems include transfer of pension account from one bank/branch to another, commencement of family pension in case of demise of pensioner, and so on. Therefore, in case your PPO number is not recorded in your bank account, you can ask the pension-disbursing bank to do the same.

3. Updation of PPO and issue of pension slips

Whenever there is change in the basic pension and/or dearness allowance (DA) to be credited to the pensioner/ family pensioner, the same must be intimated to them. The central bank has asked banks to call back and record the changes in the PPO held by the pensioner indicating the amount of changes and effective date.

This means that whenever there is increase in DA, you can visit your bank and ask them to record and reflect the same changes in the PPO copy held by you. This will help you to know when and by how much the total amount of pension was increased.

In addition to that, to keep pensioners updated regarding the change in the quantum of pension, the central government including defence and railways and state governments have decided to issue pension slips in this regard. Pensioners can request these slips from their pension paying branches.

These pension slips can help you keep a track record of the pension received by you, as well let you know from when you have received the benefit of higher pension either due to hike in DA or age benefit after the age of 80 years.

4. Nomination to receive pension arrears

Government pensioners are required to nominate their heir(s) who will receive the arrears of pension from the government, if any, in the event of their death. To make the lives of pensioners easier, the central bank has advised bank branches to accept the nomination in Form A or B, as the case maybe.

Form A is used by the pensioner to make a fresh nomination request. On the other hand, any modification in the existing nomination can be made via Form B as per rules governing nomination in this regard on the Ministry of Personnel, Public Grievances & Pensions website.

Further, the RBI has also advised the pension paying banks that nomination made in this regard must also be printed on the front page the passbook of your bank account. These rules are also applicable to those receiving family pensioners.

5. Reducing the time lag to pay higher dearness relief

To provide the benefit of higher dearness relief (DR) to the pensioners at the earliest, RBI in its master circular has given instructions to banks to reduce the time lag between the issue of order and payment of it.

This will come as a relief to those senior citizen pensioners who would generally have to wait long -usually five to six months or sometimes even more to receive higher pension.

According to the master circular, the central bank has advised all authorised banks dealing with government pensioners, to take necessary actions as mentioned in the various central and state government notifications in this regard without awaiting further instructions from them.

The circular states that the pension paying bank branches should act on the copies of the orders supplied by government to the head offices and/or regional offices of the authorised banks. It has further instructed head offices of the banks to closely monitor and supervise timely correct disbursement of government pension to eligible pensioners.