Scheme for Payment of Pensions to Central Government Civil Pensioners through Authorized Banks

07 Oct Scheme for Payment of Pensions to Central Government Civil Pensioners through Authorized Banks

The Government of India has implemented a comprehensive scheme for the payment of pensions to Central Government civil pensioners through authorized banks. Initially introduced in phases from July 1, 1976, and subsequently extended across the country from February 1, 1977, this scheme aims to streamline the pension disbursement process, ensuring timely and reliable payment directly into the pensioners’ bank accounts. This article provides a summary of the scheme’s key features, including its scope, application, and procedural details.

Authorized Banks for Pension Disbursement

A state-wise list of authorized banks, selected in consultation with the Department of Economic Affairs and the Reserve Bank of India (RBI), manages pension payments under this scheme. These banks, which include HDFC, ICICI, IDBI, and UTI among others, have designated nodal branches responsible for overseeing reimbursement and coordinating pension payment activities through their link branches. Pensioners have the option to receive their pensions through these designated banks across the country, providing them greater convenience and accessibility.

Scope of Application

The scheme applies to all civil pensioners of the Central Government, excluding those from Railways, P&T, and Defence, as well as pensioners from Union Territories without legislatures (e.g., Chandigarh, Andaman & Nicobar Islands, Lakshadweep, etc.). It also includes retired judges of the High Courts and Supreme Court, former Members of Parliament, and former Presidents and Vice-Presidents of India. You can even check this link for all the pension schemes by going through Government Portal MyGov.In.

Mode of Payment

Under the scheme, pension payments, including family pensions, are credited automatically to pensioners’ savings or current bank accounts. There is no requirement for the submission of a pension bill by the pensioner. Payments can only be made into individual accounts, as joint accounts are not permitted. Additionally, accounts cannot be operated by a power of attorney holder, except in the case of former Presidents/Vice-Presidents and their spouses.

Transfer and Maintenance of Pension Payment Orders (PPOs)

The pension payment order (PPO), issued by the Pay and Accounts Officer (PAO), is the primary document authorizing pension disbursement. PPOs can be transferred between different paying branches of the same or different authorized banks. For any such transfer, link branches facilitate the movement of the PPO to ensure continuity in pension payments.

Identification Requirements

When a pensioner approaches the paying branch for the first time, they are required to appear in person and provide identification documents as mentioned in the PPO. Special provisions are made for physically handicapped pensioners, allowing for home visits by bank officers to facilitate identification.

Certificates for Continued Payment

To ensure continued pension payment, pensioners must furnish an annual life certificate in November each year. In cases where a pensioner is ill and unable to visit the bank, a bank officer may visit their residence for verification. Pensioners also need to submit non-employment or employment certificates, particularly if they are re-employed under the Central Government or any other entity.

Procedure for Switching from Treasury Payments to Banks

Pensioners who previously received payments through PAO or treasuries can apply for the switch to authorized bank payments. Applications for such a switch are submitted to the pension disbursing authority and then forwarded to the Central Pension Accounting Office (CPAO) for further processing.

Death and Family Pensions

In the unfortunate event of a pensioner’s death, the pension payment will include the day of death. Payment of arrears will be processed as per the established guidelines. In the case of family pensions, PPOs include specific instructions regarding eligibility, and payments can commence upon verification of documents provided by the claimant, such as a death certificate of the pensioner.

Gratuity Payments

The scheme does not cover the payment of death or retirement gratuity. Instead, gratuity payments are managed separately by the concerned PAO or state accountant general.

Post-Payment Checks and Reimbursements

The Central Pension Accounting Office is responsible for post-payment verification of all pension transactions. The authorized banks prepare and submit payment scrolls, and reimbursement claims are handled through a structured linkage between the paying branches, link branches, and nodal branches.

The Scheme for Payment of Pensions through Authorized Banks aims to provide Central Government civil pensioners with a reliable, secure, and convenient mechanism for receiving their pensions. By leveraging the extensive banking infrastructure, the scheme simplifies the pension disbursement process and offers increased efficiency, accessibility, and convenience for pensioners across the country.

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