What changed
RBI has reinforced that pension accounts under government financial assistance schemes for senior citizens, widows, and handicapped persons must remain singly operated. RRBs are now explicitly prohibited from converting these accounts into joint accounts or issuing ATM cards to beneficiaries, except for minors and mentally challenged individuals. Any such conversion requires prior written approval from the Government of NCT of Delhi.
What it means for you
This circular tightens controls on pension accounts to prevent fraud and misuse. RRBs must ensure strict adherence to these restrictions, which may reduce operational flexibility but enhance security for vulnerable beneficiaries. Banks need to update their account opening and modification procedures to align with these requirements, especially for accounts linked to government financial assistance schemes.
What you must do
- Review all existing pension accounts for senior citizens, widows, and handicapped persons to ensure they are not converted to joint accounts without proper approval.
- Implement a process to obtain prior written approval from the Government of Delhi before any conversion of singly-operated pension accounts.
- Restrict ATM card issuance for these beneficiaries to only minor and mentally challenged cases, and document all exceptions.
- Train branch staff on these specific restrictions to avoid inadvertent violations.
Who it affects
Regional Rural Banks (RRBs), Beneficiaries of government pension schemes (senior citizens, widows, handicapped persons), Government of NCT of Delhi
Can we issue ATM cards to all pension account holders under this scheme?
No, ATM cards can only be issued to minor and mentally challenged beneficiaries. For all others, issuance is prohibited to prevent fraud.
What if a beneficiary wants to convert their singly-operated pension account into a joint account?
Such conversion is not allowed without prior written approval from the Government of NCT of Delhi. You must obtain this approval before making any changes.
Does this circular apply only to accounts in Delhi?
The circular references a letter from the Government of NCT of Delhi, so the restrictions are based on that directive. RRBs should check if similar state-level directives exist elsewhere.