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Modi govt raises family pension for bank employees to 30% of last drawn salary

The govt has also decided to increase the employer’s contribution in New Pension Scheme to 14% of the salary from the current 10%.

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Mumbai: Admitting that family pension for bank employees is at a paltry level, the government on Wednesday announced to raise the same to 30 per cent of the last-drawn salary.

Earlier, kin of a deceased PSB employee used to get a maximum of Rs 9,284 per month as a family pension, said Department of Financial Services Secretary Debasish Panda.

“The cap has been completely removed and a uniform slab of 30 per cent at the last-drawn salary will be entitled as family pension,” Panda told reporters here, admitting that the earlier levels were “paltry”.

This would result in the family pensions rise to as high as Rs 30,000-Rs 35,000 a month, Panda said.

Similarly, the ministry has also decided to increase the employer’s contribution in New Pension Scheme (NPS) to 14 per cent of the salary from the current 10 per cent, he said.

Earlier, Finance Minister Nirmala Sitharaman expressed her satisfaction at public sector banks’ (PSBs) performance in the past few years, and appreciated that many of them have come out of the RBI’s prompt corrective action framework.

Panda said a dozen PSBs have become leaner and started delivering profits which have upped the investor confidence in them and made them self-dependent for capital raising.

He said that since last year, the banks have collectively raised over Rs 69,000 crore, including Rs 10,000 crore in equity, and are in the process of raising another Rs 12,000 crore at present.

On the government’s plans to reduce stakes in insurers, Sitharaman said the government will go down to having minimum holdings in such companies. She also asked the employees not to fear anything saying the government is sensitive about their concerns.

When asked about the reports of government mulling insurance bonds as an alternative to bank guarantees, Sitharaman said it was just a suggestion that had come from the industry.

Meanwhile, giving the progress on the National Asset Reconstruction Company, Panda said the entity has been registered and the Indian Banks’ Association has already approached the Reserve Bank of India (RBI) for licence.

“We expect that licence to come in soon. Assets to be transferred have already been identified, process of getting the inter-creditor agreement is also in the works, CEO has been appointed and staff has been put in place,” he said.

Panda added that the government guarantee is not a concern but remains under consideration.

Also read: What is the best asset monetisation plan? Modi govt can learn important lessons from Australia


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