Bank Employees’ Family Pension to Hike to 30% of Last Salary, Increase by Rs 30,000-35,000

In a bid to provide relief to families of bank employees, Union government on Wednesday increased the pension slab. Now, the bank employee’s family will get a pension at uniform slab of 30 per cent of last drawn salary. This move would raise the pension benefits for families to Rs 30,000 to Rs 35,000, Debasish Panda, Secretary, department of financial services, ministry of finance, said. Earlier the cap for pension was fixed at Rs 9,284.

Indian Banking Association (IBA) earlier recommended that family pension, which was payable at the slab rates of 15 per cent, 20 per cent and 30 per cent for different categories of pensioners, should be improved without any fixed cap. Finance ministry had decided to approve this recommendation to benefit thousands of bank employees and their families.

Moreover, the government has asked the banks to increase employer contribution in pension corpus to 14 per cent from the existing 10 per cent,

Finance minister Nirmala Sitharaman on Wednesday reviewed the performance of the public sector banks. She met managing directors and chief executive officers of several public sector banks to discuss the progress made by the industry to generate demand and boost consumption.”Collectively, public sector banks have done well and have come out of Prompt Corrective Action despite service extended during a pandemic,” finance minister said.

In a bid to enhance the credit demand, the banks will go about to exhibit loan offerings in every district of the country, Sithraman added. “With changed times, now industries have option of raising funds even from outside the banking sector. Banks themselves are raising funds through various avenues. These new aspects need to be studied to target credit where it is needed,” she said.

Earlier this month, the dearness allowance (DA) hiked for the bank employees and pensioners. The new DA rate will be applicable from this month and effective from August to October. It will be applicable for bankers following 11th BPS salary structure. DA for bank employees has been jumped to 27.79 per cent, up by 2.1 per cent over the last quarter.

DA for bank employees and workmen for 10th BPS has been increased by 3 per cent, compared to the last quarter. The hike in DA will be in place for the next three months, beginning from August. Over 8 lakh employees will be benefited from this decision. A hike in DA will increase the net salary drawn by the bank employees every month as it is directly linked to the basic salary.

Dearness Allowance is a component of salary of government and bank employees, aimed at soothing the impact of inflation. DA is calculated based on Consumer Price Index and revised in every quarter for bank employees. As DA is related to cost of living, it varies from employee to employee based on whether they work in urban sector, semi-urban sector or the rural sector. DA has been included to compensate for price rise or inflation in a particular financial year.