What changed
RBI issued a revised Master Circular (RBI/2024-25/06) replacing the April 2023 version, consolidating all instructions on government pension disbursement by agency banks up to March 31, 2024. The circular reiterates that banks must implement government orders on dearness relief directly from government websites without waiting for RBI instructions. It also clarifies procedures for refund of excess pension payments and handling of errors by banks versus government.
What it means for you
Agency banks must now rely on government websites for DR orders and act promptly, reducing delays for pensioners. Banks are directly accountable for immediate refund of excess payments caused by their own errors, independent of recovery from pensioners. For government errors, banks must pursue resolution with the concerned department in a time-bound manner, without involving RBI.
What you must do
- Ensure pension-paying branches access government websites for DR orders and credit pensions immediately without waiting for RBI circulars.
- Refund any excess pension payment due to bank error to the government account in lump sum immediately, and separately recover from pensioner as per Pension Sanctioning Authority guidance.
- For government-caused excess payments, take up cases with the respective government department promptly and keep acknowledgements on record.
- Update internal processes to align with the revised Master Circular and train staff on the updated procedures.
Who it affects
All agency banks handling government pension disbursement, Pension-paying branches of agency banks, Government pensioners (Central and State)
Can we still wait for RBI circulars before implementing government DR orders?
No. The circular explicitly states that banks must act on government orders obtained via post, fax, email, or government websites immediately, without waiting for further RBI instructions.
What should we do if we detect an excess pension payment due to our bank's error?
You must credit the entire excess amount to the government account in lump sum immediately, independent of any recovery from the pensioner. For recovery from the pensioner, seek guidance from the Pension Sanctioning Authority.
Who handles excess payments caused by government errors?
The bank should take up the matter with the concerned government department with full particulars, ensuring a time-bound resolution. Keep the department's acknowledgement on record. Do not refer such cases to RBI.