Banks must consider updation of pension without further delay

Finance Minister Nirmala Sitharaman two years ago said that the bank retirees, who were in their 80s and 90s, were expecting resolution to their long-pending demand of pension updation. She said on November 10, 2020, that “I want bank employees to be given their due. A lot of pensioners are waiting for a very long time. We need bank employees to be attended to, particularly their families and the pension of retired employees.”

But nothing has happened so far. Pension for bank employees was introduced further to the Memorandum of Understanding signed between Indian Banks Association and All India Bank Employees Association on October 29, 1993. The said MoU was signed under Section 2(P) and Section 18(1) of the Industrial Disputes Act of 1947, read with Rule 58 of Industrial Disputes (Central) Rules 1957. The clause 12 of MoU states “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, amount of pension, payment of pension, commutation of pension, family pension, updating and other general conditions, etc., on the lines as are in force in RBI.

But even after three decades, banks have not made any updation of pension though it has been done in the RBI. Consequently in banks the General Managers, who retired some 20 years ago are drawing a pension less than that of a peon who has recently retired. Erosion of value of money due to inflation and huge expenses on account of age related medical complications have compounded the problem for most of the retirees who are in their 80s and 90s.

It will not be out of place to mention that state and Central Government employees’ pensions are revised with every pay revision of employees and pension to government pensioners are paid out of taxpayers' money collected every year. But bank pensioners are paid out of pension funds created by banks out of the profits earned by them.

The Supreme Court has earlier said (1) that the pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer, (2) the pension is not an ex-gratia payment but it is a payment for the past service rendered and (3) it is a social welfare measure rendering social-economic justice to those who in the hey-day of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in lurch. But the government and the Indian Bank Association seem to ignore these findings of the highest court of the country.

Strangely the IBA does not discuss anything with any retirees’ association. IBA enters settlement with employees’ unions and retirees are not part of these unions. The IBA has never recognized any retirees association and the IBA is not covered under RTI Act and one cannot get any meaningful information from IBA on any matters pertaining to retirees.

All along IBA was pleading that banks’ financial positions do not permit for any pension updation. It is reported that the public sector banks have recovered Rs 6.42 trillion of non-performing loans and written-off loans since FY 2014-15 and the gross NPA ratio of the state-owned banks fell to 7.4 per cent by the end of FY 22 as compared to 14.6 per cent in FY 18 and the net NPA also declined to 2 per cent from 8 per cent. Bank retirees expect that at least based on this, the banks must consider updation of pension without further delay.

(The author is a retired banker.)