RBI withdraws circulars on recovery of excess pension made to pensioners; check details

Recovery from Pensioners: The RBI has issued a notification dated January 21, 2020, for the withdrawal of circulars issued earlier on the recovery of excess pension made to pensioners. As per the notification, it has been brought to the notice of RBI that the recovery of excess or wrong pension payments from the pensioners is being made in a manner that is not in keeping with the extant guidelines or Court orders.

This issue has been examined by RBI and it has been decided that the following circulars issued by Department of Government and Bank Accounts, Reserve Bank of India related to the recovery of excess pension paid by agency banks stands withdrawn with effect from January 21, 2020 –

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Circular no DGBA.GAD.No.2960/45.01.001/2015-16 dated March 17, 2016
Circular no CO.DGBA (NBS) No.44/GA.64 (11-CVL) 90/91 dated April 18, 1991
Circular no CO DGBA (NBS) No.50/GA.64 (11-CVL) 90/91 dated May 6, 1991.

It may be noted that though the above-mentioned circulars issued under the signature of RBI stand withdrawn, agency banks are requested to seek guidance from respective Pension Sanctioning Authorities regarding the process to be followed for recovery of excess pension paid to the pensioners if any.

As regards the issue of the refund to be made to the government of excess/wrong pension payments, banks may be guided by the guidelines laid down in Circulars Nos.:

DGBA.GAD.H10450/45.03.001/2008-09 dated June 1, 2009 and

DGBA.GAD.H.4054/45.03.001/2014-15 dated March 13, 2015.

Agency banks are again advised that, where excess pension payment has arisen on account of mistakes committed by the bank, the amount paid in excess should be refunded to the Government in lump sum immediately after detection of the same and without waiting for recovery of any amount from the pensioners.

As per 2015 circular, if the agency bank is of the view that the excess/wrong payment to the pensioner is due to errors committed by the government, they may take up the matter with full particulars of the cases with respective Government Department for a quick resolution of the matter.

However, this must be a time-bound exercise, and the government authority’s acknowledgement to this effect must be kept on the bank’s record. The banks may take up such cases with government departments without reference to the Reserve Bank of India. In all other cases, where the excess payment has arisen on account of mistakes committed by the bank, the amount paid in excess should be credited back to government account in lump sum immediately.