My dear friends,

MADAM F.M !! PLEASE EXPEDITE THE ANNOUNCEMENT OF PENSION UPDATION 

Annexed here is the letter dated         17 10 2023 addressed to the Hon'ble Minister of Finance to expedite announcement of Pension Updation in PSBs.

Contents are as follows:

దేవులపల్లి శ్రీనివాస మూర్తి 

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C N VENUGOPALAN

Former (Indep.) Director (GOI Nominee), State Bank of Travancore (2011-14) & Ex- Manager, Union Bank of India

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“Nandanam”, Kesari Jn. N Paravur, Kerala – 683 513 ceeyenvee@gmail.com Mob: 9447747994

No.231017 October 17, 2023

Smt. Nirmala Sitharaman ji,

Hon’ble Minister for Finance,

Ministry of Finance, North Block,

New Delhi – 100 001

Most respected Madam,    

Namasthe!

Kindly recall your exhortation to the Indian Banks’ Association (IBA) on 10th November, 2020 at its 73rd Annual General Meeting as the third anniversary of it is fast approaching. All bank pensioners became cheerful to read the following in the media three years back:-

A one-rank, one pension (OROP) kind of scheme is in the works for retired PSU bank employees. OROP was a longstanding demand of armed forces’ veterans, where the pension would be reworked so that everyone who retired in the same rank will get the same pension, irrespective of the date of retirement.

Finance Minister Nirmala Sitharaman has sounded off banks to do more for employees who retired earlier so they are not discriminated against in terms of pension.

Ironically, the IBA and the Department of Financial Services, Ministry of Finance (DFS) have kept dithering on the issue for far too long, caring twopence to your exhortation. As a result, the exuberance of the bank pensioners generated by your honeyed exhortation has vanished, giving way to disappointment and disillusionment to them.    

Leave alone OROP, the revision of pension mandated by the statutory Pension Regulations is denied to the bank pensioners notwithstanding that their pension and revised pension are payable out of the Pension Funds built up with the CPF of employees and the CPF refunded by retired employees and families of deceased employees and there is no burden to the revenue account of banks or to the budgetary allocations of the government as the Pension Funds have a corpus of above Rs.3,50,000 Crores at present and the annual pay-out of pension/family pension is less than 25 percent of the annual growth of the Fund.

The bank pensioners are, in fact, expropriated by short changing their statutorily vested pension, out of their own money and property, and are driven to the corridors of courts in old age in quest of justice as if the work they had done in strenuous atmosphere all along while in service of banks for translating all financial policies of the government into reality was a crime that attracts the punishment of deprivation.

As per the industry-wise settlement dated 29.10.1993 between IBA and All India Bank Employees Association entered pursuant to the Industrial Disputes Act, 1947, the Pension Scheme of 58 banks, including of nationalised banks, was to be on the pattern of the Pension Scheme in the Reserve Bank of India (RBI) as regards payment of Dearness Allowance, amount of pension, updating, general conditions etc. But when the DFS accorded sanction to revise the pension in RBI on 5th May, 2019, similar updating was not granted in the nationalised banks under its control, making all of them breach the settlement dated 29.10.1993.  

    Regulation 35 (1) of the Bank (Employees) Pension Regulations, 1995 (BEPR) as amended in 2003 lays down that Basic Pension and additional pension, wherever applicable, shall be updated as per the formulae given in Appendix –I. It initially stood as In respect of employees who retired between the 1st day of January, 1986 but before the 31st day of October, 1987, basic pension and additional pension will be updated as per the formulae given in Appendix-I. The amendment made it clear that pension of all employees, irrespective of their date of retirement shall be updated, giving stress to the updating by replacing the words will be updated with the words shall be updated and also by adding the phrase wherever applicable, shall be updated in the amended proviso, making it categorical that pension shall be updated simultaneously with the revision in pay scales arising out of each bipartite settlement.

The Appendix-I contained five formulae including formula -1 for updating pension of employees retired between 01st day of January, 1986 but before 31st day of October, 1987. The formula 2 to formula 5 were not applicable to the employees retired between 01st day of January, 1986 but before 31st day of October, 1987. In postulating in plural that pension of employees who retired between 01st day of January, 1986 but before 31st day of October, 1987 will be updated as per the formulae given in Appendix-I, the construction of the proviso in regulation 35 (1) was apparently wrong. The possible objective of the proviso was to ensure that the benefit of updating pension was given to employees who retired prior to the date of commissioning the Pension Scheme and not to forbid the benefit to employees who retire after commissioning of the scheme. No formula for updating of pension of future retirees could be put in the Appendix-I as it was to be based on the future level of emoluments payable from time to time.  

Regulation 56 of the BEPR (Residuary Provisions- In case of doubt in the matter of application of these regulations, regard may be had to the corresponding provisions of Central Civil Services Rules, 1972 or Central Civil Service(Commutation of Pension) Rules,1981 applicable to for the Central Government employees with such exceptions and modifications as the bank ,with the previous sanction of the Central Government may, from time to time, determine) makes it crystal clear that the Pension Scheme in banks is exactly the same as the Central Civil Pension Scheme. No bank has so far determined any exceptions and modifications from the Central Civil Pension Scheme and notified in the gazette of India with the previous sanction of the government. This makes it imperative that just in the same way Central Civil Pension gets updated with the implementation of each Pay Commission, pension in banks is to be updated/revised in tune with the revised emoluments arising out of the Bipartite Settlements.

In other words, updating /revision of pension needs no fresh sanction as it is a benefit already conferred on the bank pensioners by the BEPR, 1995, and the non-updating /non-revision by the DFS is in gross breach of the statutory Pension Regulations put in place by the DFS itself.

The Hon’ble Supreme Court has held on 01.07.2015 in State of Rajasthan & Anr. vs. Mahendranath Sharma & Ors. (Civil Appeal No.1123 of 2015) that Pension shall not be lower than 50 percent of the revised scales of pay corresponding to the pre-revised scales, State cannot take a plea of financial burden to deny the legitimate dues of the respondents and It is the duty of the State Government to avoid unwarranted litigations and not to encourage any litigation for the sake of litigation. In another recent judgment in State of Rajasthan Vs. O P-Gupta (2022) also, the Apex Court said that the settled position of law is that when Pension Rules are capable of more interpretations than one, the Courts should lean towards that interpretation which goes in favour of the employee. The DFS is obviously flouting the laws laid down by the Hon’ble Supreme Court in not updating the pension in the nationalised banks under its control in accordance with the revised pay scales arising out of the Bipartite Settlements.  

It is also pertinent that the Parliamentary Committee has recommended additional pension of 5 percent at 65 years, 10 percent at 70 years and 15 percent at 75 years along with the existing 20 percent increase at 80 years, 30 percent at 85 years, 40 percent at 85 years, 50 percent at 95 years and 100 percent at 100 years to Central Civil Pensioners, in addition to the normal revision in pension through each Pay Commission, to enable them live on their own without becoming a burden on others. The Central Government has accepted this recommendation recently. The benefit is given out of budgetary allocations met by the tax-payers’ money out of the mammoth profits transferred by public sector enterprises and public sector banks to the Central Government. While giving the benefit even to the teachers and other staff of the private run schools and colleges out of the tax money or budgetary allocations of the government, the bank pensioners who worked in state run banks in tense and stressful atmosphere all along for implementing all the financial policies of the government are denied the normal updating of pension, out of their own money and property, for the past three decades. As a sequel to it, the General Manager of a bank retired 25 years ago gets a pension lesser than his Clerk retiring now, depriving him a life with dignity in old age. Such a phenomenon cannot be seen elsewhere in the universe.    

The recommendations of the Parliamentary Committee referred to above and its acceptance by the Central Government is in recognition of the fact that pensioners need more help as they advance in age and the government has an obligation -social and moral- to help them. But look at the paradoxical plight of the pensioners retired from government owned banks. Their pension reduces with age in the sense that later retirees get higher pension than earlier retirees not because of a flawed pension system, but because of a stubborn reluctance on the part of the government to address the issue as per the existing provisions / despite enabling provisions.

The non-revision of pension in banks and regular revision of pension for government employees has engendered a situation in which pension in banks is inversely proportional to age of the pensioner and pension of government employees is directly proportional to age. The double standard is difficult to understand.

Senior most bank men are nursing a feeling that the flattering praise of bank personnel - past and present – by the Finance Minister and her promise of happy days for bank pensioners is nothing but a play to the gallery. If the Finance Minister is honestly concerned about this popular perception about her and she meant what she said, she should walk her talk by revising pension in banks forthwith at least from April, 2019 as done in the case of the Reserve Bank of India, if not from the very inception of the pension as mandated by the Pension Regulations. It will show that the Minister has been true to her oath of office and to the Constitution of India, to treat all manner of people without discrimination and without fear or favour and has respect to the statutes and to the laws laid down by the Supreme Court.

I request you to kindly announce the updating of pension in banks forthwith in the same way you updated the family pension in banks so that the bank pensioners who are senior citizens in advanced age do get their legitimate entitlements before they join the great majority. It does not need any fresh sanction as it involves only the proper implementation of the Pension Regulations/Settlements /Rulings of the Courts. This can make the various petitions in different courts across the nation redundant.  

Thanking You,

Yours respectfully,        

C N VENUGOPALAN

Copies to:-

Shri Narendra Modiji, Hon’ble Prime Minister of India, PMO, Delhi -110 011

Shri. D Y Chandrachud, Hon’ble Chief Justice, Supreme Court of India, New Delhi-110 001

Secretary, Dept. of Financial Services, Jeevan Deep Building, Parliament Street, New Delhi – 100 001

For kind information.

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