Smt. Nirmala Sitharamanji,
Hon’ble Union Finance Minister,
Government of India, New Delhi.

Respected Madam

Subject -- Updation of Pension and other issues of Retirees.

I profusely thank you for sympathetically considering improvement in family pension, 100 Percent DA Neutralization to pre-November 2002 Retirees and granting Pension Option to Resignees who had put in eligible pensionable service. The beneficiaries will cherish these with a sense of gratitude.

At the same time I am compelled to encroach upon your valuable time by humbly submitting a few words on the aforesaid subject with the high hope that you would kindly appreciate the deep agony of the Senior and Super Senior Citizens of the industry and take effective steps to resolve the issues immediately as the pensioners have been waiting for more than Three Decades and several thousands have already left this world anxiously waiting for getting their legitimate updation of pension.

  1. Pension Updation:

    This is well within your knowledge that the modalities of allowing Pension Updation have been clearly spelt out in Bank Employees Pension Regulation No. 35(1) – Appendix 1 and it has been made universally applicable to all eligible Retirees by an amendment passed in the year 2003 when Shri Atal Behari Vajpayee Ji was the illustrious Prime Minister of the country. The said amendment has also been duly notified in the gazette by Government of India. Since the Pension Scheme in Banks are modelled on Central Government and RBI Employees Pension Scheme, I request you to ensure that the Updation is done exactly in the same way as done for RBI pensioners. Our Pension Scheme is a Defined Benefit Scheme where updation is well defined in amended Regulation 35(1). Updation is our legal right arising out of subordinate legislations. There is no scope for further negotiation or interpretation by IBA as the Regulation is a Statutory Provision with force of law. The Banks /IBA / Government are now to arrive at periodical Updation Formula as done in case of RBI (Basic Pension + Dearness Relief+10% thereof) and notify Updation as per RBI Formulae as part of Appendix 1. Although there is laid down provision in Bank Employees Pension Regulations (1995), the Legitimate and Legal Entitlement is being denied since 1992 and thousands of Pensioners have left the world without getting their due benefits.

  2. Health Insurance at affordable cost for the Retirees of the Bank:

    At the instance of MOF, GOI, The IBA evolved a Health insurance Scheme for the Bank Retirees in the year 2015. Although in GOI guidelines, there was no mention about shouldering of the burden of premium by the Retiree, still the senior citizens were subjected to bear the burden. In the initial year, it was a modest sum of Rs.7500/- only which within a period of 7 years jumped more than 10 times of what it was. At such an unbearable stage, when the Retirees had been waiting for betterment as promised by IBA and the serving organizations, a new product in the name of health insurance at so called affordable cost has been floated where there has been qualitative and quantitative degradation by imposition of ceilings/caps on various ailments. The Base Policy is reduced to Rs 2 Lakhs from Rs 4 Lakhs with several ceilings on reimbursement and facility of top up policy has been offered at astronomical rates where the premium of Top UP policy has been unusually made many times more than the premium of the Base Policy. The whole scheme has turned to be a mockery as the premium is as high as Rs.107,000/- paradoxically ridiculing the meaning of affordability. If an insurance cover consumes 3 to 4 months pension, it cannot be called affordable scheme by any stretch of imagination. Most of the Retirees had surrendered their individual health insurance policies when the IBA policy came into existence. Now when they require real help from the government/Banks, they have been thrown open before a cut-throat market competition and situation demands immediate intervention of government with a compassionate approach otherwise the scheme envisaged by GOI for the welfare of Retirees will not be in existence within a very short period and Bank Pensioners and Retirees will be left out high and dry from any health coverage at a time when they need it the most. Pensioners in retrospect, feel trapped, cheated, and helpless, having been allured in the name of an affordable Health Insurance Scheme.

  3. Non reckoning of “Special Allowance” to compute pension and gratuity after 01.11.2012:

    It may please be noted that the Retirees after 01.11.2012 got a component of salary in the name of Special Allowance which attracted Dearness Allowance. It is paid to all employees and officers without being assigned to any special function to be performed to earn it. It is payable even during the period of leave. It reckons for Encashment of Privilege/Earned Leave. Actually, such components of salary which attract DA are taken into consideration for the purpose of calculation of pension and gratuity but in the present case, the retirees are being deprived of the said benefit causing gross injustice in the Bipartite Settlement/Joint Note. Our organization (AIBPARC) has time and again represented before the IBA/ Government for redressal of the grievance.

    IBA and the Unions (UFBU) cannot enter into legally untenable agreements and try to legitimize the same in the garb of Bipartite Settlements though it is against the basic tenet of law. Several such attempts by the IBA and Unions in their earlier Settlements were challenged in the Courts of Law and held by no less than by the Highest Court of the country, the Hon'ble Supreme Court as wrong and legally not tenable. The present situation is that all the pending cases in respect of Special Allowances at different state High Courts have been transferred to Delhi High Court by an order of the Supreme Court at the prayer of IBA. This litigation will continue for years together and the deprivation will also be an endless process and meanwhile many Retirees will pass away without getting justice. There are several verdicts of the Supreme Court where in the similar circumstances, the benefit has gone in favour of the employees. IBA is well aware of all such verdicts but still they are forcing the employees to be engaged in the litigation and spend precious time and money. An intervention is urgently required to establish just and fair labour practices in the industrial relations of the Banking industry.

  4. The issue of “Resignees”:

    The above issue has been resolved by way of an MOU signed between IBA and UFBU on 9th November, 2023 but a few aberrations still remain which are of no less importance. I request you to kindly see that the said aberrations are removed and justice is rendered.

    1. This is unfortunate that the facility of commutation of Pension, which is integral to the Pension Scheme, has been denied to the Resignees. After spending their lives for so many years without pension, their financial condition is already dilapidated and it would be very difficult for them to refund to the bank the CPF with interest in order to make themselves eligible to opt for pension. The commutation facility may please be allowed and Pension may kindly be given from 2010 when Second option was considered.
    2. Except the Retirees who had tendered resignations, there had been few other left-outs in the industry who for various reasons could not opt for pension. As such people, being very few in number, have been accommodated for second option in RBI/ NABARD, the same facility may please be extended in the Banking industry. Pension is a Social Security Benefit Scheme given at a cost by surrendering Management Contribution of PF and this Social Security should be extended to them also.
  5. Consultative status for the Retiree Organizations:

    Our organization, AIBPARC, clarified our standpoint on the issue before you and IBA time and again. AIBPARC and other Apex level organizations of Retirees must have the rightful opportunity of being heard. IBA in pursuance of GOI guidelines, subsequently being backed by the decision of the Managing Committee of IBA, advised all member banks to form Grievance Redressal Mechanism at corporate level but strangely enough IBA is denying the Consultative Status at its own level. It has been told to us on several occasions that IBA had the authority from member banks to talk to the serving organizations only on wage revision and not with the organization of Retirees on matters relating to pension. Now a pertinent question comes: wherefrom IBA got the mandate of talking to the serving organisations on pension updation without getting specific authority from member banks or the actual beneficiaries till today? I demand that the issue of pension updation must be discussed with the Retirees' & Pensioners' Organizations who know where the shoe pinches and not others who are representing serving employees/officers.


I know that our Hon’ble Union Finance Minister has a soft and sympathetic concern for the Bank Retirees. It is because of her compassionate intervention, the issues of improvement of family Pension, 100% DA neutralization to Pre-November 2002 Retirees, the issue of Resignees, the upward revision of the financial ex gratia to Pre 1.1.1986 Retirees have seen the light of successful Resolution. It is my firm belief and conviction that true to the assertion of Hon’ble Union FM in the 73rd AGM of IBA (to treat the Retirees of the Bank as members of the same family), the aforesaid issues which caused long time deprivation to Bank Pensioners and Retirees would also be honourably resolved with your kind intervention and initiative.

With kind regards,
Copy to :
1.The Secretary, DFS,MOF,GOI.New Delhi for kind information.
2.The Chairman, IBA, Mumbai for kind information.

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