Pending Pension Revision in Reserve Bank of India

WEEKEND LIGHTER: Pending pension revision in RBI

(November 5/6, 2016, No.46/2016)

Weekend Lighter is posted every Saturday @mgwarrier.blogspot.in

Feel free to mail your views on this edition of WL to mgwarrier@gmail.com

This Special Edition of Weekend Lighter skips all other features this week to

focus on

 “Pension revision in RBI”

RBI’s Neglect of Pension Issue

M G WARRIER*

Through Reserve Bank of India (Pension) Regulations, 1990 drafted on the lines of GOI’s Civil Service Pension Rules, 1972, pension was introduced in RBI effective January 1, 1986. After introduction of pension, wages of serving staff of RBI were revised effective November 1, 1987, 1992, 1997, 2002, 2007 and 2012(on 6 occasions so far). Benefits of three revisions (up to 1997) were extended to pensioners who retired prior to November 1, 1997. Subsequent pension revisions have been stalled, allegedly because of pressure on RBI from GOI. Thus, as on date RBI retirees draw pension with reference to four dates depending on their date of retirement (Prior to November 1, 1997, between November 1, 1997 and October 31, 2002, between November 1, 2002 and October 31, 2007, between November 1, 2007 and October 31, 2012, and after October 31, 2012). The issue is under correspondence between RBI and GOI for more than two decades now. RBI Pension Scheme is funded fully out of Reserve Bank’s income (Actually the corpus of RBI Pension Fund is now able to service the pension scheme on its own).

Two letters addressed by me, one to the present RBI Governor Urjit Patel on November 1, 2016 and an earlier one addressed to Dr Raghuram Rajan on November 7, 2013, which will give a broad idea about how the issue got messed up in Reserve Bank of India, are copied below:

*Retired as General Manager, DGBA, RBI, Central Office, Mumbai on September 30, 2003 under OERS.

Letter dated November 1, 2016 addressed to Dr Urjit Patel, Governor, Reserve Bank of India, Mumbai

November 1, 2016

Respected Governor

Pension revision in Reserve Bank of India

I am aware that you are adequately briefed about the present status of delay in revision of pension benefits of RBI retirees. There may not be any parallel in the history of HRMD to the way in which RBI got trapped in a Chakravyooha as regards pension issue. At the end of this note, copied is a letter addressed to you by Ex-General Manager P R R Nayar contents of which are self-explanatory. Besides legal and policy-related issues, the messing up of pension issue in RBI has a common sense angle.

The build-up of Chakravyooha mentioned above started on the day RBI Governor took CB consent (if he did-this is verifiable from records), to get a central board memorandum vetted by finance ministry. The draft memorandum bounced back to RBI with a covering note signed by Vinod Rai, enclosing a chart prepared at Under Secretary level which gave 8 reasons why RBI Central Board cannot go ahead with the passing of the resolution   approving the revision of pension.

By the time I accessed a copy of the letter in question Vinod Rai  was CAG. I wrote a personal letter to him introducing myself as an Ex-AG's Office person who later retired from RBI and requested him to do something to help Family pensioners and Ex-Gratia recipients in RBI, as the whole pension issue in RBI got stuck because of his letter addressed to Deputy Governor (Leeladhar). He got my letter forwarded to HRD, RBI for action and advised me.
I have not heard anything from RBI.

The demand for pension revision is in the context of a pension scheme that exists in RBI, applicable to those who were in RBI service from January 1, 1986 to the effective date of introduction of NPS in the Bank.(about 25 years out of the 80 odd years RBI has been there). The promise of periodic revision was reinforced through an internal circular dated March 13, 1992 signed by the then HRD-Head. The circular, in fact lured hesitant employees weighing the pros and cons of opting for pension scheme leaving the benefits of CPF Scheme then available. One attraction specifically pointed out by the bank was periodic revisions in pension as and when wages of serving employees are revised.  How can the Bank later refuse to honour the commitment, especially when pension fund is periodically augmented from Bank’s income, factoring in the increased costs on account  of wage revisions?  As the RBI pension scheme is funded out of Bank's income, GOI has no role in deciding details of implementation, so long as no legal provisions are violated.
Your predecessor Dr Raghuram Rajan had understood this and he took shelter under a reference made to GOI earlier, which the Bank continues to hold on. He went on record in Annual Report 2014-15 clearly mentioning that decision on HR issues in RBI will be taken by the Bank’s central board.

By now, I have sent 3 or 4 communications to RBI on the subject, suggesting possible solutions. Here I would just like to go on record to say that, if there is a will, the issue can be resolved on the 18^th Floor of Central Office Building. If left unresolved, which is an option every Governor can exercise, considering the short tenure of the position, the institution will become weak.

Warm regards

Yours sincerely

M G Warrier

Letter dated November 7,  2013 addressed to Dr. Raghuram G Rajan, Governor, Reserve Bank of India, Mumbai

 November 7, 2013

Respected Sir

Relief to RBI Pensioners

Copied below** (as second item) is a letter on the above subject addressed to you by Shri P R R Nayar, which I received via group email. I had forwarded a copy of Shri Nayar’s earlier letter dated October 3, 2013 to you. I am sure that the issue is receiving your attention. The delay in deciding the issue is causing heartburn to many. In this connection, I would like to draw your attention to undue hardship caused to family pensioners due to apathy from Finance Ministry. Kindly read below my letter addressed to Vinod Rai contents of which are self-explanatory. Rai took up the issue with RBI and thanks to the perseverence by Dr Subbarao, some relief was extended to family pensioners last year.

Warm regards

Yours sincerely

M G Warrier

**Not copied here

Letter dated January 6, 2011, addressed to Vinod Rai

M G Warrier

Email: mgwarrier@rediffmail.com

January 6, 2011

To

Shri Vinod Rai

Comptroller and Auditor General of India

New Delhi

Dear Shri Rai

Let me introduce myself as one who worked in Audit during 1964-68 and retired from RBI as General Manager, DGBA in 2003. I am forced to cut into your precious time, to draw your attention to a pathetic situation which the ex-gratia recipients and Family Pensioners in RBI have been dragged into, pursuant to a position taken by Finance Ministry during 2007. Revision/Updation of pension in RBI has been stalled from 1997 (post-1992) based on your letter dated August 20, 2007-when you were Secretary, Finance - addressed to DG (Leeladhar), RBI. Efforts of RBI to get out of the impasse are not bearing fruits. Even the upper ceiling of family pension (originally Rs 1250 and revised to Rs2400) is remaining stagnant at Rs 2400/-.

I am enclosing a short note on the subject*. I am aware that it is discomforting to call your attention to an issue which has to be resolved between RBI and GOI on the basis of facts and administrative prudence. I am taking this liberty as I have been watching your irreverent and honest approach to issues. If you would like to know more about the issues I have raised, kindly send a mail. Any guidance to help out the family pensioners and ex-gratia recipients in RBI-mostly women and old people above 80- will be welcome.

Happy 2011 and regards

Yours Sincerely

M G Warrier

* Not copied here.

Note: This letter was forwarded to CGM, RBI, Mumbai-400001 under cover of CAG’s letter No 49887-C/2011 dated February 9, 2011 ‘for taking appropriate necessary action’. I heard nothing from RBI.

MGW

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