C N VENUGOPALAN

Ex-Manager Union Bank of India & Former Director (Go I Nominee) State Bank of Travancore
------------------------------------------------------------------------------------------------------------------------------------------------
“Nandanam”, Kesari Junction, N Paravur, Kerala – 683513 e-mail:ceeyenvee@gmail.com Mob:944774799

No.210728 dated 28th July, 2021

Dr. Bhagwat Kishanrao Karad,

MOS for Finance, Ministry of Finance,
Government of India, North Block, New Delhi – 110 001
bhagwat.karad@sansad.nic.in

Respected Minister,

Sub: Unstarred question No.216 of Dr. L Hanumanthaiah answered in Rajya

Sabha on 20.07.2021 by your good office on “revision of pension of retired bank
employees”

I write to share some inputs with your good office on the above question-answer that is
now viral among bank pensioners in various whatsApp groups across the nation since the
replies given to the question in Rajya Sabha to the questions are erroneous and unfounded.
The areas of conflicts from facts are:

Answer at (a) to (c) :

{“Pension of retired employees of commercial establishments has to be financed

by such establishments out of their commercially generated revenues”}

Pension Funds of banks {from which pension is payable} were created with the CPF
of serving employees on rolls of bank at the time of commissioning the Pension
Scheme in 1995 and also the CPF {settled at the time of retirement} refunded by
employees who retired after 31.12.1985 who were admitted to the Scheme. It was
the deferred wages of employees and not the money of the banks. This being the
truth, the statement in the reply that reply that “Pension…… has to be financed by
such establishments turn out to be fallacious and ludicrous. Pension Funds are thus
the deferred wages of employees and retired employees.

{“The Boards of respective nationalised bank accordingly made Employees’

Pension Regulations in exercise of their powers under section 19 of the Banking
Companies (Acquisition & Transfer of Undertakings Act. 1970. Pension in
nationalised banks is thus payable as per agreement arrived between
unions/associations and the banks concerned have accordingly made regulations
governing the same.”}

The statement is paradoxical on the ground that when Employees’ Pension

Regulations were put in place under section 19 of the Act of 1970 and approved by
the Parliament, they became statutory and the agreement between
unions/associations with banks recede into the background and has nothing to do
with payment of pension. Pension is thus payable strictly as per the {statutory}
Pension Regulations and not as per the agreement between unions/associations with
banks.
 2

{“While such regulations do not provide for revision of basic pension, they
provide for six monthly revision in dearness relief on the basis of rise in the All
India Consumer Price Indies for Industrial Workers”}

The reply is far from truth and fallacious since regulation 35 (1) {Basic Pension and
Additional Pension, wherever applicable, shall be updated as per the formula in
Appendix-I } specifically provide for updating of pension simultaneous with revision
in pay scales with each Bipartite Settlement. Non-revision of pension on the part of
banks is hence lawlessness.

The above apart, regulation 56 { In case of doubt, in the matter of application of

these Regulations, regard may be had to the corresponding provisions of Central
Civil Service Rules, 1972 or Central Civil Services (Commutation of Pension) Rules,
1981 applicable for 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 is explicit that the Pension Scheme in
banks is exactly on the premise of Central Civil Pension which gets updated with the
implementation of each Pay Commission automatically requiring similar updating
of pension in banks in accordance with the revised pay scales arising out of each
Bipartite Settlement.

Thirdly, Pension Scheme was put in place in terms of a memorandum of Settlement

dated 29.10.1993 signed pursuant to Industrial Disputes Act between Indian Banks’
Association (IBA )and All India Bank Employees’ Association (AIBEA), clause 12 of
which { Provisions will be made by a scheme, to be negotiated and settled between the
parties to this Settlement by 31st December, 1993 for applicability, qualifying service,
amounts of pension, payment of pension, commutation of pension, family pension,
updating and other general conditions, etc. on the lines as are in force in Reserve Bank
of India} makes it essential that pension scheme in banks has to be exactly on the
basis of the Pension Scheme in RBI. Ministry of Finance has accorded sanction for
revision of pension in RBI effective from March 2019 by a factor of 3.63 for pensioners
who retired prior to 1.11.2002 (including those who had retired prior to 1.11.1997 and
whose pension has been upgraded in terms of Court’s Orders) by a factor of 2.44 for
pensioners who retired during the period from 1.11.2002 to 31.10.2007 and by a factor
of 1.76 for pensioners who retired during the period from 1.1.2007 to 31.10.2012 vide
letter F No.11/5/2001-IR dated 05 March, 2021. Hence, non-updating of pension in
banks on the same lines is in gross breach of the terms of the industry-wise settlement
dated 29.10.1993 entered into under the Industrial Disputes Act.

Last but not the least, our Hon’ble Minister for Finance Smt. Nirmala Sitharaman
had, some nine months back exhorted the Chairman IBA and Chairman State Bank
of India at the 73rd Annual General Meeting of IBA that bank pensioners may be
granted OROP ( One Rank, One Pension ) in view of the significant contributions
made by them. The information was spread widely by print media like Times of
India on 11.11.2020. The people manning the Ministry of Finance, in dilly-dallying
the updating of pension in banks, are tarnishing the image of the Hon’ble Minister of
Finance.
 3

{“In view of pension being a funded scheme introduced on the basis of consensus
arrived at between employee unions / associations and IBA, requests for revision
and improvement in pension are considered by the Government after taking into
account the views or any proposal or recommendations of IBA in this regard”}.

So far as payment of pension is governed by the (statutory) Pension Regulations,

improvement of pension is to be done forthwith as mandated by regulation 35 (1)
and 56 and also on the lines obtaining in RBI in terms of the settlement dated
29.10.1993. Any view or proposal of Indian Banks’ Association in the matter can only
flout the provisions of the Pension Regulations and the terms of the Settlement dated
29.10.1993.

I am sending a copy of this letter to the Secretary (Banking) Ministry of Finance with
a request to do the apposite expeditiously with a view to desisting from lawlessness
and to inform me, at the earliest, in case any of my observations aforesaid is wrong.

I make a fervent appeal to you to restore righteousness by updating the pension in

banks expeditiously as provided in the Pension Regulations, Settlement dated
29.10.1993 and also for safeguarding the integrity of the Hon’ble Minister for Finance.

Thanking You,

Yours respectfully,

C N VENUGOPALAN

Copies to:

1. The Secretary (Banking), Ministry of Finance, Department of Financial Services

- with a request to inform if any of my submissions are incorrect.

2. Dr. L. Hanumanthaiah, No. 7, Pandit Ravi Shankar Shukla Lane, New Delhi 110001
l.hanumanthaiah@sansad.nic.in

3. Dr. Bagawat KIshanrao Karad, 302, Swarna Jayanti Sadan Deluxe Dr B D Marg, New
Delhi-110001