COMPENSATION PAYABLE FOR DELAYED PAYMENT OF ADDITIONAL PENSION
A case study
One pensioner ‘X’ is drawing revised basic pension of Rs.3,500/- w.e.f. 1.1.2006. His date of birth as per pension records is 01.01.1926. The government issues orders to revise the pension as per 6th CPC on 11.11.2008 with additional pension benefits to aged pensioners. The Bank revises the Basic pension and ignores the Additional Pension.
The pensioner later represented to the bank to pay him the Additional pension w.e.f. 1.1.2006. Due to lack of customer care and centralization of all pension payments, this pensioner was paid his Additional Pension and arrears only on 31.12.2010.
RBI in the meantime issued instructions to pay compensation for delayed payment of pension and arrears w.e.f. 1.10.2008. In this case, the Additional pension should have been paid along with the revision of pension by Dec 2008. But due to the negligence of the Bank, it was not paid. Now let us see how much compensation the Bank will have to pay in this case.
According to the date of birth of the pensioner, his pension should have been fixed at Rs.4200 as on 1.1.2006, (Rs.3500+20% Additional Pension i.e. Rs.700 = Rs.4200) and paid arrears by Dec 2008. Since it was not paid, the bank have to pay Compensation from 1.10.2008 as follows:-
Amount of Additional pension arrears should have been paid for the
Period from 1.1.2006 to 30.9.2008 but not paid …. … … . Rs.24,654
Compensation payable @ 10% (Bank rate + 2% penalty) from
1.1.06 to 30.9.08 for 33 months .. .. .. .. .. Rs.2,465
RD rate of interest for the monthly increase of additional pension
(Rs.700) from 1.10.08 to 31.12.10 for 27 months … … .. Rs.2,373
Total compensation payable .. .. .. .. .. Rs.4,838
This case study shows that a pensioner who had attained 80 years of age as on 1.1.2006 is automatically eligible for a minimum pension of Rs.4,200/- (3500+700) w.e.f. 1.1.2006. Suppose if he was not paid by 30.9.2008 then he is eligible for a compensation @ 10% from 1.10.2008 to till the date of payment as per the calculation given above.
The Bank has to calculate and pay of their own, without any application from the pensioner. Unfortunately none of the bank had paid to any pensioner of their own. Whie the banks develop most advanced software for recovering their due from the customer on due dates, why they fail to introduce such a software in case payment of compensation for pensioners.
It is requested that the RBI should insist all banks to automate the payment of compensation through suitable software to enable the benefits to reach all the pensioners. This will also improve the performance of the banks in terms of customer service.