The Reserve Bank of India has issued immediate-effect directions for agency banks authorized to disburse Central Government and State Government pensions, consolidating the operational and customer service rules for pension payments. The framework requires banks to implement government pension and dearness relief orders without waiting for further RBI instructions, credit pensions based on orders from the relevant Pension Sanctioning Authorities, and follow standardized requirements on excess payments, life certificates, reimbursement claims and support for old, sick, disabled or incapacitated pensioners. Banks must return excess pension caused by their own errors to the government in lump sum immediately, independently of any recovery from the pensioner, while cases arising from government errors must be taken up directly with the relevant department and recorded with its acknowledgement. The directions also require signed or digital acknowledgements for life certificates, implementation and promotion of the Jeevan Pramaan digital life certificate scheme, nodal officers and dedicated toll-free pension lines for complaint handling, continuation of an existing either or survivor joint account for family pension after a pensioner’s death, recording of Pension Payment Order numbers in passbooks, and pension slips at commencement and whenever the pension amount changes. Where delay in crediting pension or arrears is due to the bank, compensation must be credited automatically to the pensioner’s account at a fixed rate of 8 per cent per annum for the period of delay after the due date of payment. The directions apply to public sector banks, scheduled private sector banks, scheduled payments banks and scheduled small finance banks appointed as agency banks, and repeal the earlier pension-related directions, instructions and guidelines listed in Annex 2 while preserving actions already taken under the previous framework.
Reserve Bank of India 2026-04-30
Reserve Bank of India issues consolidated directions for agency banks on government pension disbursement with 8 percent delay compensation
The Reserve Bank of India has issued consolidated directions for agency banks on Central and State Government pension disbursement, standardising operational and customer service requirements. Banks must implement pension and dearness relief orders without awaiting further RBI instructions, ensure protections for vulnerable pensioners, and automatically compensate for bank‑caused delays at 8 per cent per annum. The directions apply to public sector banks, scheduled private sector banks, scheduled payments banks and scheduled small finance banks acting as agency banks, and repeal earlier pension-related instructions.