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Second Pension Option - Left Over Bankers Still Waiting for Final Outcome 

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Rajesh Goyal 




It has been almost over a month ago that I wrote anything on this topic.   The affected bankers are keenly waiting for further progress and announcement offering them the 2nd pension option.  We have been receiving emails wherein readers are asking us to provide updates on this issue.   We regret that we do not have any confirmation about the progress.  It appears IBA is bent upon to delay the same and put the bankers to maximum harassment.   Our readers have to appreciate that it will be futile exercise to upload some pages without any concrete progress.


I now only hope that with the change of guards at IBA (new Chairman must have taken over from 1st October 2012), there will be change in attitude of IBA.     Although, the feedback which our website receives through emails and otherwise,   is not highly encouraging as it appears that in recent months the staff, specially officers staff, have been given raw deals in the matters of not only postings but also charge sheets in the bank headed by the new IBA chairman.     There appears to be lot of discontentment among the officers in the bank headed by him    However, as I had a chance to attend number of meetings chaired by him,  I feel,  he certainly has some positive attributes in some  HR matters.    However, I also strongly feel that he fails to notice large manipulations down by people down the line - like HR, Vigilance departments etc.    


I am not sure what will be his attitude in the new role of IBA Chairmanship.    The attitude of IBA till date has been exceedingly manipulative and thus there is every danger that new Chairman may here too fail to notice this negative attitude of IBA and may be swayed by twisted facts .  His recent past record in this regard does not inspire high confidence in me.   However, we needs to be optimistic and hope he will understand better the problems faced by retired bankers. 


We give below a letter received by us on the above referred issue, which will certainly give some solace to the bankers who are waiting for positive outcome for 2nd pension option :




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Ref. No:2012/08/12                                                                             Date:19/09/2012


The Secretary,

Department of Financial Services,
Ministry of Finance, Govt. of India,
New Delhi


Respected Sir,






Firstly, we convey our sincere thanks to you for your very clear and speaking communication to the Indian Bank  Association vide D.O. letter No.   DO 10/30/7/2010/-IR, dated 25 July 2012.   We understand that   IBA has with sole intention to delay   the captioned pension matter, has sent a letter dated 6th August 2012   to the Ministry  raising frivolous   and unrelated points. We humbly submit that when the Hon’ble Ministry, after giving careful thought & consideration conveyed the decision, the same should be / have been complied with by the IBA.

In above matter our further submissions are as under:


The Principal Document for agreeing to the decision of second pension option to the PSB employees is the Joint Note date  27.04.2010.    The said Note is very clear does not discriminate between the officers  / staff who retired on superannuation or by VRS or by any other mode.   Actually the pension option was agreed to be extended to all staff who were in service on 29.09.1995 in case of Nationalised Banks/26th March 1996 in case of Associate Banks of SBI, and who could not exercise their option and retired in between and / or who could not exercise their option and continued in the service till the date of joint note. The said joint note was duly accepted by the Govt. of India. Hence after approval of the Joint Note by Government, there was no occasion for the IBA to include certain conditions related to the word “retirement” used in the note.

In addition, we may respectfully submit that while calculating the cost factor for sharing of pension burden by  the employees and the Banks , the total number of staff working in the banks as on 29.09.1995/26.03.1996 was taken and accordingly the amount of sharing was decided, hence to deny the pension to those officers /  staff who left the bank on account of VRS o r where VRS scheme is not available, by resignation, (but they were otherwise eligible for pension    taking into account their length of service), they    can not be refused pension option.   This would be totally against the specific understanding and language of Joint Note as well as inclusion of all officers working in the Bank on 29.03.2005/26.03.1996.

The IBA in its letter dated 6th August  2012 is known to have raised several issues, which can be replied as  under:

The definition of “Retirement” as given in the Bank (Employees) Pension Regulation 1995, was not discussed in the Joint Note nor the same was agreed therein that Pension scheme would be applicable to those who retied from service as per Bank (Employees) Pension Regulation. The IBA’s communication dated 10.08.2010 which introduced the word “who retired on superannuation” was against the Joint Note and against the agreed terms. Actually that was a wrong interpretation of the word “retired”.


The Joint Note dated 27.04.2010 clearly indicates the categories of employees for extending another option for  pension. The Note includes all officers/ employees     who were in service on 29/09/1995/26/03/1996 who could not opt for pension earlier and retired during the period from 29.03.1995/26/03/1996 to the   date of joint note.  Those who retired voluntarily in terms of Regulation 19 (1) of Officers Service Regulations, have not be barred, anywhere  in  the  Joint  Note.  This  discrimination  between  retired  on  superannuation  and  retired  under  Regulation 19 (1) of Service Regulations is all creation of IBA vide their Circular dated 10.08.2010.


The IBA’s objection that in all PSBs Rules under Regulations 19 (1) has not been framed makes no difference.  the Banks, where Voluntary Retirement Scheme is not in existence,    the employees would have retired on


superannuation or taken another route to retire from the service, that would be acceptable   for the purpose of word “retirement”   mentioned in the Joint Note dated 27.04.2010.

In different Banks, Rules for Voluntary retirement vary say in some banks eligibility is 20 years of service while in others it is 30 years. This too makes no difference. The Officer / Employee if has put on his service, making him eligible for pension, then his option should be considered accordingly.

The concept of VRS is not for award staff, makes no difference, rather cases of VRS optees in Award Staff would be nil. The other mode of retirement from the service  (other than retirement on superannuation i.e. resignation) should be accepted as retirement.

The    IBA’s contention that inclusion of those who retired on VRS will give rise to demands from all who resigned  or  compulsorily  retired  after  putting  in 20  years  of  service,  is  irrelevant.    The  issue  was  never discussed during the negotiations; There is no record for negotiation between IBA and Banks’ Associations. The Staff who, has been compulsorily retired or dismissed from the service   on account of some misconduct and have been debarred from terminal benefits, even they have not been debarred from opting for pension as per the Joint Note. There is no mention in this regard.

We humbly submit, IBA has influenced the Banks to overlook the terms of Joint Note and be guided by their  Circular  dated 10.08.2010,  which  included  all  this  categorization  of  retired  employees  i.e.  retired  on superannuation and / or otherwise.

The IBA’s contention that any interpretation of Joint Note or Change in the contents of Agreement can not be  made  unilaterally  is  not  correct.    Firstly  there  is  no  change  in  interpretation  or  in  contents  of  the  Note. Secondly, the Circular dated 10. 08. 2010 is required to be modified, not the joint note. There is no need of  anybody’s concurrence when a decision taken and mentioned in the Joint Note is implemented. This plea that representations  from  other  category  of  officer  may  be  raised,  can  not  be  a  cause  to  deprive  the  eligible  employees.   Here we may mention that when a benefit is given to the Employees (for whatsoever reason) that does not require approval from Employees / or their Associations / unions. This can be given generously in  the light of pending litigations/ representations and wider interest of the employees.   These kind of decisions create a good image of Bank’s Management  (IBA) among the employees and the  Public  at  large.  The  VRS  optees  under  Special  Scheme  in  2001  are  covered  under  the  Circular  Dated 10.08.2010 who not only retired voluntarily but also took handsome amount from the banks, but those who opted VRS under Regulation 19 of Service Regulations are barred. This is clearly discrimination, injustice and should be done away.

The  IBA’s  contention  not  to  open  the  Joint  Note  till  next  bipartite  settlement  is  absolutely  arbitrary  and baseless.   This pension matter has been very clearly agreed in the Joint Note dated 27.04.2010 and lingering the same till next Settlement would be very harsh on the part of affected officers / employees.


Sir, we may point out that IBA has created this anomaly by issuing the Circular dated 10.08.2010, which was  against the terms of Joint Note dated  27.04.2010. They are delaying the issue un-necessarily despite clear instructions from the Ministry.   The bunch of Writ Petitions   filed by the affected officers (who took VRS during  the period from 29.09.2005 to date of Joint Note)   have been decided by the Hon’ble Karnataka High Court ( W.P. No.  32475  /  2010 Dada Peer Vs Union of India    Karnataka High Court),wherein this issue has been decided in favor of Petitioner Employees. The copy of Judgment passed in the above Writs can be had from the Internet (we will also send the same separately). Now in the light of said Judgment, IBA has to extend pension  option to all those officers who were in service on 29.09.1995 and could not opt for pension and retired or took VRS during the period from 1995 to date of Joint Note. Alternatively IBA can file SLP before the Supreme Court  of India.


We humbly submit that Officers who have put on more than 20 years or more years of service in the bank, were  in  the  service  in  September  1995  and  could  not  opt  for  pension,  took  VRS  as  per  Bank’s  Service Regulations, should not be deprived of their right to exercise their option for pension on whimsical conditions put by the IBA. We at the same time request the IBA to be generous towards banking community, to avoid big anomaly/ discrimination and to cut short long litigation, accept the true spirit of Joint Note dated 27.04.2010 and allow pension option to all categories of retired employees of bank.


With Best Regards,


Yours faithfully,





                                                                                                                                   (GENERAL SECRETARY)





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