The Minister of Finance must lead by example on this crucial issue
When the special authorization to call (C) n°(s). 5561/2016 was seized by the Supreme Court on January 20, the bank pensioners hoped to obtain favorable orders for the update of their pension, which has dragged on for three decades. But to their disappointment, the case was ordered to be listed after three months, as the lawyer representing the defendant(s), including the Association of Indian Banks, argued that the committee reviewing the representation/claim of applicants and persons placed in a similar manner has not yet been reconstituted.
Until 1993, bank employees benefited from a contributory provident scheme without any pension scheme. On October 29, 1993, an industry-wide settlement was reached between the Association of Indian Banks and the Bank Employees’ Unions which paved the way for the introduction of a pension scheme instead of a contributory provident fund as in RBI. A similar joint note was signed with the federation. also representing the officers. Paragraph 12 of the said regulations provided for the formation of a small committee comprised of representatives of the IBA and trade unions to work out details on lines similar to the RBI pension regulations and applicable central civil service pension rules. to central government employees.
Said small committee said in 1994: “The pension update formula should be the same as that given in the Reserve Bank Pension Scheme. Any changes to it should only be introduced by mutual agreement .”
However, although the Reserve Bank of India has allowed its employees’ pensions to be updated, the bank’s retirees have been receiving their pensions without any revision for the past three decades.
When the matter was presented to Finance Minister Nirmala Sitharaman, she voiced her concern in an interview in October 2020 and again in a conference the following month: “I want bank workers to get their due. Many retirees wait a very long time. Yesterday I met Rajkiran Rai from IBA. I spoke to him too.
Although he was informed that a committee had been formed by the Indian Banks Association, nothing happened on the ground. When the pension of government employees is paid on the tax receipt each year, it is a personal tax. The pension of bank retirees is paid out of the profits generated by the banks. Adequate arrangements have already been made to pay up to the last retiree in accordance with the applicable pension rules. If the pension update is granted, only an additional amount should be deducted from the profits. This provision need not be made all at once as the RBI can allow expenses to be amortized over a period of five years or more.
Without any pension updates, bank retirees in their 70s, 80s and 90s live miserable lives. Retired people pay three months of their pension just to have medical insurance because banks simply organize group insurance but leave the payment of the premium to individuals.
Former retirees draw a pittance as a pension. People who retired as general managers in the past receive a lower pension than a clerk who is now retiring due to their pension not being reviewed.
Above all, the Indian Banks Association has not recognized any of the Retirees’ Association and there is no organization to represent retirees with banks. Employee unions only represent active staff and they have their own issues to discuss and resolve.
Even after a year and a half, the concern of the Minister of Finance has not been taken into account by the banks. Retired senior bankers expect her to lead by example.
(The author is a retired banker. Opinions expressed are personal.)