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Letter to Finance Minister for Pension to RESIGNEES




Forum of Retired Bank Employees



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We reproduce below a letter received by us from Forum of Retired Bank Employees.   The letter is addressed to Finance Minister of India and strongly pitches for extension of Pension Scheme to the left over bank employees i.e. RESIGNEES.    The letter has been well drafted and makes one easily understand the real issues.  We hope the affected bank employees will be lucky that new Government and IBA takes note of the reality and ensures that RESIGNEES too are given the pension option.


C/O National Institute for Banking Education and Research

K – 5, Induprabha Society, 490, Narayan Peth Pune 411 030

E mail:, Phone: 020 24458228

Letter No. FORUM/IInd Pen Option/2014/                                                  20.06.2014


Hon. Finance Minister,

Shri. Arun Jetliji,

North Blocks,

New Delhi 110 001

 Respected Sir,

 Ref: Bank Employees Pension Scheme.

 Please accept our heartiest congratulations for grand victory in the general elections 2014 and your nomination as Finance Minister of India. We are confident that under your stewardship our economy will rise to new highs and will project the inherited strengths and abilities of leadership before the world.

 We take this opportunity to introduce ourselves as retired bank employees’ forum working for the betterment and welfare of retired bank employees. Since inception we are working for the cause of retired bank employees for over last 25 years. We are writing this letter to appraise you about the problems that are being faced by retired bank employees in general and resigned bank employees in particular.

 In the year 1995 Pension Regulations were introduced in the Banking Industry for the first time. However due to derogatory clause of service break for participation in strikes, number of employees and officers did not opt for the pension and preferred to continue with the provident fund option. Later in 1997 this derogatory clause was removed from the pension scheme but no fresh option was extended to the employees who had not opted for pension for the same. Since then the bank employees were insisting for second option of pension and that was overlooked by the managements of banks / IBA / Government of India. Finally in 2008 it was principally agreed between the managements of banks and unions of award staff and officers to work out the modalities for second option of pension. In 2010 the issue was settled amicably and second option of pension has been extended to those who were in the service of bank and did not opt for pension in 1995. Agreement on second option of pension was signed on 27.04.2010 between the award staff unions and IBA and a joint note on the similar lines was signed between the officers’ associations and IBA.

 While extending the first and second option of pension in 1995 and 2010 the employees who had resigned from the service of the bank were not made eligible to opt for the pension. Similarly the officers who had voluntarily retired under the respective schemes of banks were also not made eligible for the pension option. However after protracted legal battle the officers who had voluntarily retired from the bank’s service were made eligible to opt for pension and accordingly they started receiving the pension. The only category of employees / officers who had resigned from the services of the banks is left out of the pension scheme. The number of such left out employees / officers is not more than 2% in the banking industry as per rough estimates. A number of cases were filed in various high courts and the cases have been decided either way by both High Courts and Supreme Court of India. The brief history is as under.

 1)      Pension agreement was signed in October 1993 and in April 1994 IBA forwarded the draft pension regulations to all the banks for adoption by their respective Board of Directors. The Regulation 10 in the draft regulations deals with forfeiture of service and it states “Dismissal, termination of or resignation by an employee from the service except where the Service Regulations / Service Rules / Settlements do not disentitle such employee from receiving superannuation benefits shall forfeit his entire past service and consequently shall not qualify for pension payment.”

2)      While carrying this provision in the Pension Regulation 1995 as Regulation 22 the words “except where the Service Regulations / Service Rules / Settlements do not disentitle such employee from receiving superannuation benefits” are omitted. This has changed the very purpose of the Regulation.

3)      Regulation 31 and Regulation 33 of Pension Regulation deals with compassionate allowance and compulsory retirement pension. These regulations provide that “The authority higher than the authority competent to dismiss or remove or terminate any employee from service  may sanction a compassionate allowance not exceeding two-thirds of the pension which would have been admissible to the employee on the basis of the qualifying service rendered up to the date of his dismissal, removal or termination.” The Regulation 33 provides “An employee compulsorily retired from service as a penalty may be granted by the authority higher than the authority competent to impose such penalty, pension at a rate not less than two-thirds and not more than full pension admissible to such employee on the date of his compulsory retirement if otherwise he was entitled to such pension on superannuation on that date.”

4)      After going through the Paragraph 2 & 3 above you will appreciate that the act of resigning from the banks service is so such serious that it cannot be pardoned whereas the others who are dismissed, removed, terminated or compulsorily retired under penal action are made eligible to draw their pensionary benefits.

5)      The Bank Employees Pension Regulations are based on the Central Civil Pension Regulations and it has been very specifically mentioned in Regulation 56 of Bank Employees Pension Regulations 1995, that “in case of doubt, in the matter of application of these Regulations, regard may be had to the corresponding provisions of Central Civil Services Rules, 1972 or Central Civil Services (Commutation of Pension) Rules, 1981 applicable for Central Government Employees with such exceptions and modifications as the Bank, with the previous sanction of the Central Government, may from time to time, determine.”

6)      A provision exists under the Officers Service Regulations 19 that enables the management to take review of any officer after completing 30 years of service or 55 years of age whichever is earlier and to retire any officer prematurely before superannuation. The proviso under Regulation 19(1) reads as “Provided also that nothing in this Regulation shall be deemed to preclude an officer employee from retiring earlier pursuant to the option exercised by him in accordance with the rules in the bank.” Based on this regulation and the proviso there-under some of the banks have prepared the Voluntary Retirement Scheme for officers’ community. The scheme prepared by these banks under Regulation 19 of Officers Service Regulations is not uniform and varies mainly in respect of service criteria. All the other service regulations are uniformly applicable to all the banks.

7)      Under Pension Regulations 1995 any bank employee either award staff or officer is allowed to retire voluntarily from the service at any time after completion of 20 years of service. The employees who are not covered under the Pension Regulations are however not allowed to retire voluntarily. As mentioned in earlier paragraph the officers of some of the banks are allowed to retire voluntarily as per the schemes under Regulation 19(1). The employees and officers are thus discriminated against both amongst each other and within the class.

8)      Banks like Canara Bank, after introduction of the Pension Regulations modified the Voluntary Retirement Scheme and brought the service criteria to 20 years at par with Pension Regulations.

9)      The Central Civil Services Pension Rules 1972, Regulation 5(1) reads “Any claim to pension or family pension shall be regulated by the provision of these rules in force at the time when a Government servant retires or is retired or is discharged or is allowed to resign from service or dies, as the case may be.” This clearly indicates that one who is allowed to resign is eligible to claim the pension.

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10)      The provisions for resignation and voluntary retirement for bank employees are tabulated hereunder.



Voluntary Retirement


Notice of one month in case of award staff and 3 months in case of officers is necessary

Notice of 3 months in case of both the award staff and officers is necessary


Acceptance of notice is must for a both award staff and officers

Acceptance of notice is must for a both award staff and officers


The terminal benefits like Provident Fund and Gratuity is paid as per rules

The terminal benefits like Provident Fund and Gratuity is paid as per rules


Leave encashment up to 50% of the privilege leave at credit is allowed.

Leave encashment up to 100% of the privilege leave at credit is allowed.

 11)      From the table above you will definitely appreciate that there is no difference as far as resignation or voluntary retirement in case of bank employees.

12)      Hon. Supreme Court in case of Mr. Sheelkumar Jain Vs New India Assurance Company (Civil Appeal No. 6013 of 2011) has dealt this particular aspect and has upheld that where the resignation with due notice is accepted by the competent authority it should be treated as voluntary retirement. The Hon. Bench states asunder. In case of Bank Employees Pension Regulation 1995, Regulation 29 deals in Voluntary Retirement Pension and that in case of Insurance Pension Regulation 1995 Regulation 30 deals in Voluntary Retirement Pension. In both the cases the Regulation 22 deals in Forfeiture of Service.

“Clause 22 of the Pension Scheme, 1995 states that resignation of an employee from the service of the Corporation or a Company shall entail forfeiture of his entire past service and Consequently shall not qualify for pensionary benefits, but does not define the term "resignation". Under sub-clause (1) of Clause 30 of the Pension Scheme, 1995, an employee, who has completed 20 years of qualifying service, may by giving notice of not less than 90 days in writing to the appointing authority retire from service and under sub-clause (2) of Clause 30 of the Pension Scheme, 1995, the notice of voluntary retirement shall require acceptance by the appointing authority. Since voluntary retirement' unlike `resignation' does not entail forfeiture of past services and instead qualifies for pension, an employee to whom Clause 30 of the Pension Scheme, 1995 applies cannot be said to have `resigned' from service. In the facts of the present case, we find that the appellant had completed 20 years qualifying service and had given notice of not less than 90 days in writing to the appointing authority of his intention to leave service and the appointing authority had accepted notice of the appellant and relieved him from service. Hence, Clause 30 of the Pension Scheme, 1995 applied to the appellant even though in his letter dated 16.09.1991 to the General Manager of respondent no.1-Company he had used the word `resign'.”

13)      However unfortunately in the case of Mr. M. R Prabhakar Vs. Canara Bank (Civil Appeal Nos. 7188 -7191 of 2012, the other bench of Hon. Supreme Court took a different view and has stated in the judgment as under.

“Learned Counsel appearing for the Appellants have placed heavy reliance on Sheelkumar Jain (supra) and submitted that in the light of that judgment, the decision rendered in Sanwar Mal (supra) requires reconsideration. We find it difficult to accept the contention raised by the Learned Counsel appearing for the Appellants.

We may point out in Sheelkumar Jain (supra) that this Court was dealing with an insurance scheme and not the pension scheme, which is applicable in the banking sector. The provisions of both the scheme and the Regulation are not pari materia. In Sheelkumar Jain case (supra), while referring to Para 5, this Court came to the conclusion that the same does not make distinction between 'resignation' and 'voluntary retirement' and it only provides that an employee who wants to leave or discontinue his service amounts to 'resignation' or 'voluntary retirement'. Whereas, Regulation 20(2) of the Canara Bank (Officers) Service Regulations 1979 applicable to banks, had specifically referred to the words 'resignation', unlike Para 5 of the Insurance Rules. Further, it is also to be noted that, in that judgment, this Court in Para 30 held that the Court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement.”

14)      The inference drawn by the Hon. Bench in the case of Mr. M. R. Prabhakar Vs Canara Bank that in the case of MR. Sheelkumar Jain, the Court was dealing with an insurance scheme and not the pension scheme is not correct and is far from the facts. This has nothing but miscarriage of facts and justice.

15)      The writ petitions filed by the resigned officers from Vijaya Bank were decided in favour of the officer employees at the Karnataka High Court. After a protracted litigation through SLP, Review Petition and SLP thereafter these 22 officers are finally allowed to opt for second pension option in 2014 and they have been paid the pension along-with the arrears from 27.09.2009.

16)      One more case from Bank of Baroda has been decided in favour of the employee at Supreme Court where the employee was dismissed with terminal benefits was initially denied the pension by the bank. The case No. Civil Appeal No. 10956 of 2013 arising out of SLP No. 17054/2009 in respect of S. K. Kool Vs Bank of Baroda is decided on 11.12.2013. In this case the spirit of the Regulation 10 of draft Pension Regulation 1993 and not the modified Regulation 22 of Pension Regulation 1995 (on which the IBA is insisting) is upheld.

17)      A number of writ petitions are pending in various high courts throughout the country on this issue for justice. As two different and contradictory decisions are given by the apex court the situation is turned in to mess. Hence the issue needs to be looked in to afresh.

18)  The number of employees who have resigned from the services of the banks is hardly ranging between 1 – 2 % of the total retired employees and below 1 % of the serving employees. The financial burden of second pension option of such resigned bank employees can be easily absorbed by the banks without much disturbing their profitability. Even the pension funds of individual banks are in a position to take this additional load.

19)  The new Government has taken certain initiatives for senior citizens. As reported in the media it is a welcome step by the Government to start pension payment at the doorsteps of those who are not in a position to visit the bank branches. On this background denial of pensionary benefits to the resigned bank employees is difficult to digest.

20)  A small section of resigned bank employees is now getting the pension after the intervention of the Hon. Supreme Court and the other group is denied the same that leads to violation of Article 14 of the Constitution of India as this act of IBA and banks discriminates the resigned bank employees creating two artificial classes in a homogenous group.

 We therefore request your good self to look in to the matter after taking all the facts narrated above and advise IBA and other concerns to consider the issue positively and reduce the hardships of the senior citizen bank employees who had resigned from the service of the banks after putting in unblemished service in their hay days.

 Thanking you,

 Yours faithfully,

 Vice President."

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