Extension of benefits which are extended to pensioners of the Central Government to Bank Pensioners – Communication dated 20.05.2026

Please Circulate

 

                                                              11.07.2026

 

To: Leaders and Members of Affiliate Associations

 

 

Extension of benefits which are extended to pensioners of the Central Government to Bank Pensioners – Communication dated 20.05.2026. 

 

In the social media, a letter purported to be written by Department of Financial Services to Indian Banks Association is being circulated.  On Department of Financial Services had previously written a letter to all Public Sector Banks to align Commutation Table with that of 2006 Commutation Table applicable to pensioners of Govt. of India, Taking advantage of this letter, a request has been made not to restrict alignment to provisions regarding the issue of Commutation, but to extend such alignment to all other provisions in Central Civil Services Pension Rules.

 

It is found that a large number of improvements have been made, State Bank Retirees’ Association is proud that it has noticed and recognized such improvements.   Perhaps, it is the only organization to initiate appropriate measures.  The issues covered include following benefits:

 

a.   Commencement of Qualifying Service

b.   Counting of Leave for Qualifying Service

c.    Eligibility for full Pension after Ten Years of Service

d.   Additional Pension on Attaining the Age of Eighty Years

e.   Additional Family Pension

f.    Eligibility of Unmarried, Widowed or Divorced Daughters

g.   Commutation on Subsequent Revision of Pension

h.   Period for Commutation without Medical Examination

 

It is first ever endevour and beginning has been made.

 

 

                                                                                                                             

    Dr. A Ananthakrishna Rao                                                            C N Prasad

                          President General Secretary

  

 

 

C N Prasad

                    President   General Secretary

 

                     Ref No.: PR1995/GoI/931                  Date: 11th July, 2026

  

The Secretary,

Dept. of Financial Services,

Ministry of Finance,

Respected Sir,

 

 

Extension of benefits which are extended to pensioners of the Central Government to Bank Pensioners – Communication dated 20.05.2026. 

 

We invite your kind attention to the purported communication bearing eF. No. 9/9/5/2026-IR dated 20.05.2026, addressed to the Indian Banks' Association, regarding Restoration of Commuted Pension in pursuance of the common judgment dated 04.12.2024 of the Hon'ble Punjab & Haryana High Court.

 

2.   We also invite your attention to the following observation contained in the aforesaid communication:

 

"It is also to be noted that the Banks' (Employees) Pension Regulations, 1995 governing pension-related matters of bank employees are broadly based on the Central Civil Services (Pension) Rules. The 8th Central Pay Commission will accordingly take care of a decision on the period for restoration of commutation."

 

3.   The above communication unequivocally reiterates that the pensionrelated provisions governing bank employees are broadly based on the Central Civil Services (Pension) Rules. It is well established that whenever the recommendations of a Central Pay Commission are accepted by the Government, with or without modifications, the corresponding amendments are also carried out in the Central Civil Services (Pension) Rules and the Central Civil Services (Commutation of Pension) Rules.

 

4.   This is not the first occasion on which the Government has expressed such an intention. Earlier, vide F. No. 8/2/2021/BO.I dated 28.06.2021, the Department of Financial Services advised the Indian Banks' Association to align the Commutation Table under the Banks' (Employees') Pension Regulations, 1995 with that applicable to Central Government pensioners. Public Sector Banks were also advised to amend the Pension Regulations accordingly.

 

 

 

 

 

5.   These communications create a legitimate expectation among bank pensioners that the Banks' (Employees') Pension Regulations, 1995 should progressively be aligned with the Central Civil Services Pension Scheme. They clearly reflect the policy intention 

 

6.   of the Government. Consequently, the following benefits available under the Central Civil Services (Pension) Rules also deserve to be extended to bank pensioners by making suitable amendments to the Banks' (Employees') Pension Regulations, 1995:

 

a. Commencement of Qualifying Service

 

Rule 11 of the Central Civil Services (Pension) Rules provides that qualifying service commences from the date an employee takes charge of the post to which he or she is first appointed, whether in a substantive, officiating or temporary capacity, provided such service is followed without interruption by substantive appointment. In contrast, the Banks' (Employees') Pension Regulations, 1995 reckon qualifying service only from the date of permanent appointment.

 

b. Counting of Leave for Qualifying Service

 

Rule 21 of the Central Civil Services (Pension) Rules provides that all leave for which leave salary is payable and extraordinary leave granted on medical grounds shall count as qualifying service. Even extraordinary leave on other grounds may count as qualifying service if the competent authority specifically directs so while sanctioning such leave. Under the Banks' (Employees') Pension Regulations, 1995, however, extraordinary leave without pay is restricted to a maximum of 365 days, and that too only if specifically permitted by the sanctioning authority.

 

c. Eligibility for Pension after Ten Years of Service

 

Rule 44(1) of the Central Civil Services (Pension) Rules provides that an employee completing ten years of qualifying service becomes entitled to pension calculated at 50% of emoluments or average emoluments, whichever is more beneficial. However, voluntary retirement at the employee's own request continues to require twenty years of qualifying service.

 

d. Additional Pension on Attaining the Age of Eighty Years

 

The Central Civil Services (Pension) Rules provide for payment of additional pension to pensioners attaining the age of eighty years, as under:

 

Age of Pensioner	Additional Pension
80 years to less than 85 years	20%
85 years to less than 90 years	30%
90 years to less than 95 years	40%
95 years to less than 100 years	50%
100 years and above	100%

 

 

 

 

 

 

 

e. Additional Family Pension

 

Rule 50(3)(a) similarly provides for payment of additional family pension/compassionate allowance to family pensioners on attaining the age of eighty years and above, on the same pattern.

 

f. Eligibility of Unmarried, Widowed or Divorced Daughters

 

Rule 50 also extends family pension to an unmarried, widowed or divorced daughter (including an adopted daughter, stepdaughter and a daughter born after the retirement of the pensioner), subject to the prescribed conditions relating to dependency and livelihood. Corresponding provisions deserve to be incorporated in the Banks' (Employees') Pension Regulations, 1995 wherever necessary.

 

g. Commutation on Subsequent Revision of Pension

 

Rules 6 and 10 of the Central Civil Services (Commutation of Pension) Rules, 1981/2021 provide that where pension is revised subsequently for any reason, the commuted portion relatable to the additional pension is recovered only from the date of payment of the additional commuted value. Restoration of such commuted portion is made automatically after 180 months from the respective date of payment without requiring any fresh application.

 

h. Period for Commutation without Medical Examination

 

Rule 13 provides that where pension itself is sanctioned subsequently, the oneyear period during which commutation is permissible without a medical examination is reckoned from the date of sanction of pension and not from the date of retirement.

The above list is only illustrative and not exhaustive. Several other provisions also require suitable alignment.

 

6.   From the above communications, it is evident that the intention of the Government is that the Banks' (Employees') Pension Regulations, 1995 governing pension-related matters should broadly conform to the Central Civil Services (Pension) Rules. We respectfully submit that this intention cannot be confined only to matters relating to commutation of pension. The same principle should extend to all pensionary benefits wherever corresponding provisions exist under the Central Civil Services Pension Scheme. It is, therefore, our legitimate expectation that the Banks' (Employees') Pension Regulations, 1995 should be comprehensively aligned with the Central Civil Services Pension Scheme.

 

7.   We may also respectfully submit that the Hon'ble Supreme Court, in Civil Appeal No. 5525 of 2012 and connected matters, by judgment dated 13.02.2018, directed extension of pensionary benefits available under the Reserve Bank of India Pension Scheme to employees of Public Sector Banks. Under the Reserve Bank of India Employees' Pension Regulations, 1990:

 

•   pension at 50% is admissible after completion of ten years of qualifying service;

 

 

•   proportionate pension is payable to employees with qualifying service between ten and twenty years;

•   the provisions relating to commencement of qualifying service and counting of qualifying service are already aligned with those under the Central Civil Services (Pension) Rules.

 

Accordingly, extension of the above benefits would also be in consonance with the judgment of the Hon'ble Supreme Court dated 13.02.2018.

 

8. In view of the foregoing, we earnestly request your good office to initiate suitable action for aligning all provisions of the Banks' (Employees') Pension Regulations, 1995 with the Central Civil Services Pension Scheme wherever differences presently exist, including the matters specifically enumerated above. Such action would give effect to the policy intention repeatedly expressed by the Government and ensure parity in pensionary benefits.

 

We shall be grateful if the necessary amendments are initiated and implemented at the earliest.

 

Thanking you,

 

With regards,

 

 

(C N Prasad)

General Secretary