Silenced Security: Retired Bank Employees' Unheard Cry for Pension Revisions

The Public Sector Banks (PSBs) in India are at crossroads with multiple phenomena such as mergers, outsourcing, and a large number of vacancies occurring simultaneously. 

Amid issues mentioned above, a gripping saga of retired bank employees' struggle for pension revisions has come to the fore. The retired bank employees have come forward with facts and data that sheds light on the long-standing issue, financial intricacies, and the unequal treatment within the banking sector.

Economic Battle Ignites 
After decades of financial stagnation and failing fervent pleas, the demand for pension revisions among retired bank employees has surged, igniting an economic battle that seeks to address their pressing concerns. According to K T Babu from the All Kerala Bank Retirees Forum (AKBRF), “The last pension revision of bank employees was in 1993 and pensioners get the same basic pension that they received 30  years back.”

In a data-driven pursuit for justice, the AKBRF has collected statistics from 21 public sector banks (before merger) using RTI provisions.

K T Babu explains, “The very same pension scheme introduced  during November 1990 in the RBI  was introduced in  Banks during November 1993, is funded scheme, fund being the sole property of Employees- a part of provident Fund (in lieu of Central Provident Fund) but unfortunately, it remains ignored.”

Unveiling the Pension Fund
As inflation and living costs escalate, these pensioners find themselves caught in the grip of financial stagnation. Looking at the intricacies of the pension fund come to light, revealing an intriguing financial tale.

M Suresh, AKBRF General Secretary, highlights, “It is a matter of fact that only 40% of the total inflow (Rs. 61,432 crores) was required to pay off the pension (Rs. 24,408 crores) during 2022. The remaining 60% got added to the Corpus Fund. As of now, the total pension corpus fund amounts Rs. 3.57 lakh crores.”

Pic: Protest of AKBRF in Kerala demanding Pension Updation
Pic Credit: K T Babu

Suresh added that AKBRF has gone beyond collecting official data on the corpus fund to relentlessly voice the demand of retired bank employees to meet desired results.

Government's Deafening Silence
Despite public acknowledgments, the Finance Ministry and the Indian Banks' Association (IBA) have remained silent on the critical issue of pension revisions. Statements made in Parliament and collective inaction have left retired bank employees questioning their financial security after years of service.

Reacting to the finance ministry and IBA’s prejudice towards retired bankers, M Suresh told Kanal, “The distress of no pension revision of retired bank employees has been ignored by the finance minister. In 2020, finance minister Nirmala Sitharama acknowledged the unresolved issue of pension revision but nothing happened after the announcement.”

However, the retired pensioners did not get support from the IBA and shockingly, the IBA went ahead to file an affidavit in the Supreme Court that said, “there is no provision for any pension updation. Therefore, it would neither be appropriate in principle nor would be financially viable to accept representation/claim for pension updation at par with Central employees.”

Eventually, the financial viability of pension revision was questioned both by the Union Ministry of Finance and the IBA.

Financial Viability Under Scrutiny
Delving into the heart of the matter, the financial viability of pension revisions comes into focus. Figures gleaned from official sources paint a compelling picture, as the pension corpus witnesses substantial growth. However, concerns of potential depletion have prompted hesitation in implementing pension updates.

As per the data of gathered from RTI filed by AKBRF, the details of pensioners, family pensions and total corpus fund is as follows:

Pension and Pension Fund at Glance

Source: RTI extracted data by All Kerala Bank Retirees Forum
The RTI document also revealed that out of the then existing total employees of 7,74,515 total pension optees to retire is around 2,10,000 as on 31.03.2022. To follow the present trend, by 2045 there will be no pension beneficiary to add to the pensioners’ community whereas a very bulky amount of more than 6 lakhs crores will be accumulated as a treasure to service the pensioners.

Inequity Exposed
The pension scheme was implemented from November 1993 with retrospective effect from 1986 after a prolonged struggle. But the pension revision along with pay revision as done in the case of Central and State Government Employees was not made applicable to bank employees.

A striking inequality surfaces when comparing the treatment of pension revisions within the banking sector. Retired employees of the Reserve Bank of India (RBI) enjoy the privilege of pension revisions, while their counterparts in other banks remain neglected, revealing a deep-rooted disparity.

In fact an internal letter of the RBI said, “nearly 30,000 Reserve Bank of India (RBI) retired employees have received a 13.56% increase in pension after a gap of four years.”

Moreover, since the inception of the pension scheme, the retired RBI employees have received revised pension on four occasions and with cooperation of the IBA.

As the financial sector marches ahead, the plight of retired bank employees remains a litmus test for the industry's commitment to its workforce. With data as their armour and determination as their weapon, these retirees seek reaffirmation of their invaluable contributions to the banking sector through financial justice.