The Reserve Bank of India (the Reserve Bank) oversees disbursement of pension by its agency banks. In the process, it receives queries/complaints from pensioners in regard to fixation, calculation and payment of pension including revision of pension/Dearness Relief, transfer of pension account from one bank branch to another, etc. The Reserve Bank has analysed the queries/complaints, and put them in the form of answers to Frequently Asked Questions here. These will cover most of the queries/ doubts in the minds of pensioners.
1. Is it necessary for the pensioner to open a separate pension account for the purpose of crediting his/ her pension in authorised bank?
The pensioner is not required to open a separate pension account. The pension can be credited to his/her existing savings/ current account maintained with the branch selected by the pensioner.
2. Can a pensioner open a Joint Account with his/ her spouse?
Yes. All pensioners of the Central Government Pensioners and those State Governments which have accepted such arrangement can open Joint Account with their spouses.
3. Whether Joint Account of the pensioner with spouse can be operated either by ”Former or Survivor” or “Either or Survivor”
The Joint Account of the pensioner with spouse can be operated either as ‘‘Former or Survivor” or “Either or Survivor”.
4. Whether a Joint Account can be continued for family pension after death of a pensioner?
Yes, the banks should not insist on opening of a new account in case of Central Government pensioner if the spouse in whose favour an authorisation for family pension exists in the Pension Payment Order (PPO) is the survivor and the family pension should be credited to the existing account without opening a new account by the family pensioner for this purpose.
5. Who sends the Pension Payment Orders (PPOs) to the authorised bank branch?
The concerned pension sanctioning authorities in the Ministries /Departments/ State Governments forward the PPOs to bank branches wherefrom the pensioner desires to draw his/her pension. However, on implementation of CPPCs, pension sanctioning authorities have gradually started sending PPOs to the CPPC of the bank instead of bank branch.
6. When is the pension credited to the pensioner’s account by the paying branch?
The disbursement of pension by the paying branch is spread over the last four working days of the month depending on the convenience of the pension paying branch except for the month of March when the pension is credited on or after the first working day of April.
7. What is the procedure for payment of pension in the case of the transfer of PPO to another branch or bank, as the case may be?
Pension will be paid for three months on the basis of the photocopy of the pensioner’s PPO at the transferee (new) branch from the date of the last payment made at the transferor (old) branch. Both the branches (old and new) are required to ensure that all the required documents are received by the transferee branch within these three months.
8. What is the procedure to be followed by the bank branch if the pensioner is handicapped/ incapacitated and is not in a position to be present at the paying branch?
If the pensioner is physically handicapped/incapacitated and unable to be present at the branch, the requirement of personal appearance is waived. In such cases, the bank official visits the pensioner’s residence/ hospital for the purpose of identification and obtaining specimen signature or thumb/toe impression.
9. Has the pensioner got right to retain half portion of the PPO for record and to get it updated from paying branch whenever there is a change in the quantum of pension due to revision in basic pension, dearness relief, etc.?
Yes. The pensioner has right to retain half portion of the PPO for record and whenever there is a revision in the basic pension/Dearness Relief (DR), etc. the paying branch has to call for the pensioner’s half of the PPO and record thereon the changes according to government orders/notifications and return the same to the pensioner.
10.Can a pensioner be allowed to operate his/ her account by the holder of Power of Attorney?
The account is not allowed to be operated by a holder of Power of Attorney. However, the cheque book facility and acceptance of standing instructions for transfer of funds from the account is permissible.
11. Who is responsible for deduction of Income Tax at source from pension payment?
The pension paying bank is responsible for deduction of Income Tax from pension amount in accordance with the rates prescribed by the Income Tax authorities from time to time. While deducting such tax from the pension amount, the paying bank will also allow deductions on account of relief to the pensioner available under the Income Tax Act. The paying branch, in April each year, will also issue to the pensioner a certificate of tax deduction as per the prescribed form. If the pensioner is not liable to pay Income Tax, he should furnish to the pension paying branch, a declaration to that effect in the prescribed form (15 H).
12.Can a pensioner withdraw pension from his/ her account when he/she is not able to sign or put thumb/toe impression or unable to be present in the bank?
In such cases, a pensioner can put any mark or impression on the cheque/ withdrawal form and may indicate to the bank as to who would withdraw pension amount from the bank on the basis of cheque/withdrawal form. Such a person should be identified by two independent witnesses. The person who is actually drawing the money from the bank should be asked to furnish his/her specimen signature to the bank.
13.When does the family pension commence?
The family pension commences after the death of the pensioner. The family pension is payable to the person indicated in the PPO on receipt of a death certificate and application from the nominee.
14. How the payment of Dearness Relief at revised rate is to be paid to the pensioners?
Whenever any additional relief on pension/family pension is sanctioned by the Government, the same is intimated to the agency banks for issuing suitable instructions to their pension paying branches for payment of relief at the revised rates to the pensioners without any delay. The orders issued by Government Departments are also hosted on their websites and banks have been advised to watch the latest instructions on the website and act accordingly without waiting for any further orders from RBI in this regard.
THE PENSION PAYING BANK IS RESPONSIBLE FOR DEDUCTION OF INCOME TAX FROM PENSION AMOUNT IN ACCORDANCE WITH THE RATES PRESCRIBED BY THE INCOME TAX AUTHORITIES FROM TIME TO TIME. WHILE DEDUCTING SUCH TAX FROM THE PENSION AMOUNT, THE PAYING BANK WILL ALSO ALLOW DEDUCTIONS ON ACCOUNT OF RELIEF TO THE PENSIONER AVAILABLE UNDER THE INCOME TAX ACT.
15. Which authority the pensioner should approach for redressal of his/her grievances? A pensioner can initially approach the concerned Branch Manager and, thereafter, the Head Office of the concerned bank for redressal of his/her complaint. They can also approach the Banking Ombudsman of the concerned State in terms of Banking Ombudsman Scheme 2006 of the Reserve Bank of India (details available at the Bank’s website www.rbi.org.in) This is applicable only in respect of complaints relating to services rendered by banks. For other issues, the complainant will have to approach the respective pension sanctioning authority.
16. Where can a pensioner get information about the changes in the pension/Dearness Relief or any pension related issue?
The pensioner can visit the Official Website of the concerned Government Department as also Reserve Bank of India Website (www.rbi.org.in) to get the information about pension related issues.
17. Whether a pensioner is entitled for any compensation from the agency banks for delayed credit of pension/ arrears of pension?
Yes. A Pensioner is entitled for compensation for delayed credit of pension/arrears thereof at the fixed rate 8% and the same would be credited to the pensioner’s account automatically by the bank on the same day when the bank affords delayed credit of such pension /arrears etc without any claim from the pensioner.
Note: These FAQs are issued by the Reserve Bank of India (The Reserve Bank) for information and general guidance purposes only. The Reserve Bank will not be held responsible for actions taken and/ or decisions made on the basis of the same. For clarifications or interpretations, if any, readers are requested to be guided by the relevant circulars and notifications issued from time to time by the Reserve Bank and the Government.