RBI's big move: 8% interest on delayed pensions for central, State govt staff

The Reserve Bank of India has ordered banks to pay 8% interest if pensions are delayed. Compensation must be automatically provided for delayed transactions from October 2008. Additionally, banks have been advised to publish pension calculations on their websites.

8% interest on Pension delays

The Reserve Bank of India has stated in a circular that if there is a delay in providing pensions to government pensioners, the bank must pay interest at 8% per annum from the date the pension amount was due. The Reserve Bank has advised banks to automatically provide pensions and arrears, and pensioners should not have to claim compensation.

Compensation for pensions

Furthermore, for all pension transactions made late since October 1, 2008, the bank must automatically credit compensation to the pensioner's account without any request from the pensioner.

Pension-paying banks

Banks are requested to promptly obtain copies of orders from pension disbursing authorities to ensure that government employees receive their arrears along with their pension in the following month if pension arrears are paid.

Payment of pension arrears

Banks have also been advised to make necessary arrangements to publish details about pension calculations on their websites. Similar arrangements should be made in bank branches from time to time. Adequate publicity should also be given for this.

Pension calculations

The Reserve Bank stated in its circular that all pension disbursing agency banks should provide customer service to pensioners, especially elderly pensioners, with care and empathy.