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Govt Approves NPS Contribution Hike for RRBs, Meeting Long-Pending Demand
The Government of India has approved a hike in NPS employer contribution for RRBs from 10% to 14%, meeting a long-pending demand. Unions in Sarva Haryana Gramin Bank, Utkal Grameen Bank, Karnataka Vikas Grameena Bank, and Tripura Gramin Bank had recently pushed for this revision.
Author: Saurav Kumar
Published: March 4, 2025
The Government of India, Ministry of Finance, Department of Financial Services (DFS), has approved a revision in the employer’s contribution towards the National Pension Scheme (NPS) for Regional Rural Banks (RRBs), increasing it from 10% to 14% of Pay and Dearness Allowance (DA).
The directive, issued via F.No.8/1/2022-RRB on March 1, 2025, instructs NABARD to ensure implementation across all RRBs and their sponsor banks, with retrospective effect from November 11, 2020.
In an official communication to NABARD, the government official stated: “I am directed to refer to the captioned subject above and to convey the approval of the Central Government for revision in employer’s contribution towards National Pension Scheme (NPS) from 10% to 14% of Pay and Dearness Allowance (DA) to all Regional Rural Banks (RRBs), effective from 11.11.2020.”
A Long-Awaited Demand from RRB Unions
The increase in employer contribution has been a long-pending demand of most RRB employee unions across India, who have been seeking parity with employees in Public Sector Banks (PSBs) and other government institutions. Several RRBs, including Sarva Haryana Gramin Bank (SHGB), Utkal Grameen Bank (UGB), Karnataka Vikas Grameena Bank (KVGB), and Tripura Gramin Bank (TGB), have actively pushed for this revision in recent times. The revised contribution is expected to enhance retirement benefits and financial security for thousands of RRB employees enrolled under the NPS.
With NABARD now tasked with ensuring implementation, RRB employees across the country will be keenly watching how swiftly this long-awaited decision translates into benefits for them.