RBI Directives On Pension Payments to Help Pensioners | Kuber Mindz

By | 23/08/2018
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     If you are, or if you know a pensioner who wants to know if he can get his pension in a joint account or if he has to open a separate account to get family pension, you have come to the right place. You should know that banks are supposed to record the Pension Payment Order (PPO) number on the bank account passbook and you can ask them to issue pension slips.

Senior citizens need not run from pillar to post to get their pension-related issues sorted, so the Reserve Bank of India has issued several directives to pension disbursing banks via a master circular on this subject which was released on July 2, 2018. Moneymindz, India’s First Free Online Financial Advisory

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1. Pension credit 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 which has to be with the spouse in whose favor an authorization for family pension exists in the PPO; which means that the pensioner cannot receive pension in any other jointly held bank account apart from the one held with his spouse whom he has nominated to receive family pension following his demise. With the death of the pensioner, the bank cannot insist that the surviving spouse open a new account, etc.

2. Recording Pension Payment Oder in the bank’s Passbook

Reserve Bank of India has asked pension paying banks to record the PPO number in the bank accounts of pensioners and family pensioners in which pension is credited so that pensioners need not face any problems generally faced in the event of the loss of PPO. PPO is an important document because it is to be mentioned while submitting life certificate every year. Non-submission of life certificate to the pension paying branches can result in an assumption that the pensioner is probably dead, thus resulting in the pension being stopped.

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3. Updating PPO and issuance of pension slips

If there is a change in the basic pension and/or dearness allowance to be credited to the pensioner/ family pensioner, the same must be intimated to them. RBI has asked all banks to call back and record changes in the PPO. Apart from that, pension slips are also being issued so as to keep pensioners updated.

4. Nomination to receive pension arrears

A government pensioner ought to nominate his/her heir(s) who shall receive the arrears of pension from the government, if any, in the event of their demise. RBI has also directed the banks to mention your heirs in the front page of the passbook of your bank account. Moneymindz, India’s First Free On call Financial Advisory

5. Cut down the time delay for paying higher dearness relief

In its master circular, RBI has instructed banks to reduce the time lag between the issue of order and payment of it. This comes as a relief to pensioners who had to wait long periods so as to receive a higher pension. Timely and proper disbursement has to be made.

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