12th BPS: ‘Ex-Gratia’ Clause on Pension Updation in MoU Stirs Bank Retirees

The MoU of the 12th BPS for bankers was signed between IBA and UFBU on 7 December, in Mumbai after the fifth round of negotiation talks. One of the key takeaways from the MoU highlighted by the UFBU and the IBA was the cause of pensioners, for which they had to sacrifice on the loading factor for employees.

The concerned clause in the MoU is as follows (the highlighted portion): 

Though the MoU promises improvement in pension benefits, voices of dissent are alive among retirees particularly on the ‘ex-gratia’ aspect mentioned in it. M Suresh, the general secretary of All Kerala Bank Retirees Forum(AKBRF) in his letter to Sanjeev K Bandlish, the convenor of UFBU, conveyed their “strong displeasure and disappointment on accepting an ex-gratia payment subverting the very pension scheme”. The letter describes it as a “retrograde step” and “an absolute surrender to Managements of Banks”. 

The letter argues the UFBU failed to consider the huge fund balance in the pension corpus which would be sufficient for the updation of pension. “Justice can be done only by incorporating provisions on the lines of the pension updation in RBI and NABARD”, he added in the letter. The Kerala based retirees forum has been fighting a legal battle for their pension updation in the supreme court, by collecting relevant data through RTIs. The next hearing of the case is expected in March, 2024.

Speaking to Kanal, KT Babu a retiree of State Bank of Travancore and an RTI activist with the AKBRF commented that "the position of the big unions neglects the needs of pensioners. Unfortunately, sometimes it is favouring the IBA's agenda to defy the right of the retirees for pension updation. Even Though a small unrecognised organisation in Kerala, we are confident of winning our case to achieve our demand". He also stated that the bank retirees depend solely on UFBU to take up their demand to the official forums since no pensioners’ organisations are recognised by the IBA.

When Kanal sought a response from the leadership of AIBEA, the largest union in UFBU, they refused to comment on “rumours and statements from unrecognised organisations”. They also said that the MoU is not the final settlement, it will take three months at least, and it is inappropriate to comment as they await a clearer picture from upcoming negotiations.

However, we came across a statement released by the Karnataka state committee of the All India Bank Retirees Federation(AIBRF) denouncing the ex-gratia clause as “a total negative, retrograde and unacceptable proposition”. The statement, from the largest organisation among bank pensioners, said “none of the retiree organisations have authorised such an action” and “the Pension Regulations do not provide for such a payment, having no legal binding”.

All India Bank Pensioners' and Retirees' Confederation(AIBPARC), the largest retirees forum among former bank officers, has also condemned the promise of an 'ex-gratia' amount. The organisation has urged the retirees to sign an online petition with the demand of RBI formula of pension updation.

Kanal reached out to K Vishwanatha Naik, the General Secretary of the federation for a response. He reiterated the organisation’s position that they don’t want alms, but their right i.e. pension. “Central-state government service pensioners, pensioners of RBI and NABARD, and other pensioners in the Public Sector are getting pension upgradation from time to time along with concerned wage settlements or pay commissions. The current pension scale of bank retirees has been stagnant over 30 years, they also deserve upgradation”, he added.

As other concerns related to the MoU of 12th BPS defining the terms of employment and wage revision echo among the bankers, retirees also come to the fore voicing their demand for the right to pension updation. The retirees also look forward to the upcoming negotiations of the 12th BPS to see if some concrete outcome arises.