Disbursement of Government Pension by Agency Banks Directions

RBI/DGBA/2026-27/399 CO.DGBA.GBD.No.S43/31.02.007/2026-27 April 30, 2026 Previous Versions Reserve Bank of India [Disbursement of Government Pension by Agency Banks (ABs)] Directions, 2026 (Updated as on June 24, 2026)

Table of Contents

Chapter I – Preliminary A. Short Title and Commencement B. Applicability C. Definitions Chapter II – Implementation of Government Orders A. Government Orders on Dearness Relief (DR), etc., available on its website B. Prompt implementation of Government’s Orders by ABs C. Timing of pension disbursement by ABs Chapter III – Recovery and Refund of Excess Pension Payment A. Agency Bank-Attributed Errors B. Government-Attributed Errors Chapter IV – Withdrawal of pension by old/ sick/ disabled/ incapacitated pensioners A. Guidelines on withdrawal of pension B. Display of instructions in bank branches Chapter V – Reimbursement of pension payments Chapter VI – Life Certificate A. Issuance of Acknowledgement B. Jeevan Pramaan Chapter VII – Customer Service A. Role of branches maintaining pension accounts B. Sympathetic treatment of pensioners C. Adherence to recommendations of Prabhakar Rao Committee on Customer Service D. Appointment of Nodal Officers (NOs) E. Continuation of ‘either or survivor’ pension account after death of a pensioner F. Recording of Pension Payment Order (PPO) Numbers on Passbook G. Issuance of pension slips H. Timely credit of pension/ arrears I. Compensation for delay in credit of pension/ arrears Chapter VIII – Repeal Provisions A. Repeal and Saving B. Application of Other Laws not barred C. Interpretations Annex I Annex II Annex III

In terms of Sections 20, 21 and 21A of the Reserve Bank of India Act, 1934, the Reserve Bank of India (hereinafter referred to as ‘RBI’ or ‘Reserve Bank’) acts as banker to the Central and State Governments. RBI carries out the general banking business of the Central and State Governments through its own offices and through the offices of the Agency Banks appointed under Section 45 of the Reserve Bank of India Act, 1934, by mutual Agreement, having regard to public interest and convenience of banking development. The Reserve Bank, in its role as banker to the Central Government and State Governments, hereby issues the following instructions/directions, to the Agency Banks, for the seamless conduct of Government business.

Chapter I – Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India [Disbursement of Government Pension by Agency Banks (ABs)] Directions, 2026.
2. These Directions shall come into force with immediate effect.

B. Applicability

3. These Directions shall be applicable to the ABs which are authorized to disburse Central Government (CG) and State Government (SG) pension.

C. Definitions

4. In this Master Direction, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: (1) ‘ABs’ means all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs) and scheduled Small Finance Banks (SFBs) appointed by RBI under Section 45 of the RBI, Act, 1934, by mutual agreement, to carry out Government Banking business of CG / SGs. (2) ‘Jeevan Pramaan’ means a biometric enabled digital service for pensioners of CG, SG or any other Government organization.

All other expressions unless defined herein shall have the same meaning as have been assigned to them under the applicable Acts, Rules / Regulations made thereunder, or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.

Chapter II – Implementation of Government Orders

A. Government Orders on Dearness Relief (DR), etc., available on its website

5. In order to obviate the time lag between issue of DR Orders and payment of DR to the beneficiary, and to render expeditious service to senior citizens, the procedure of forwarding related Government Orders in respect of DR, etc., through RBI to ABs had been discontinued. ABs shall, therefore, act expeditiously on the basis of copies of Government Orders provided by Government to them through post, fax, e-mail, etc., and/or by regularly accessing the Government websites.

B. Prompt implementation of Government’s Orders by ABs

6. All ABs shall scrupulously follow all the orders contained in various notifications of Government (Central as well as States) and take necessary action immediately without waiting for any further instructions from RBI.

C. Timing of pension disbursement by ABs

7. The ABs shall credit the pension amount in the accounts of the pensioners based on the orders given by respective Pension Sanctioning Authorities (PSAs).

Chapter III – Recovery and Refund of Excess Pension Payment

The banks may ensure that no recovery of excess amount from the pension of a Government employee shall be effected without the pensioner’s knowledge and consent, or without the issuance of a prior notice. Further, any such recovery must strictly conform to the applicable service rules and the principles discussed hereinabove.

The banks may take a Letter of Undertaking from the pensioner to the effect that in case any excess pension is credited to the account of the pensioner, the pensioner is bound to refund the same to the bank upon receipt of a suitable notice from the bank.

A. Agency Bank-Attributed Errors

8. (i) Whenever excess/wrongful pension payment is made to a pensioner due to bank-attributed errors such as clerical errors, arithmetical miscalculations or incorrect application of relevant instructions, the entire amount thereof should be credited to the Government account in lumpsum immediately on detection. (ii) The broad procedure that the banks are required to follow for recovery of such excess /wrongful pension payments made to the pensioner, is given in Annex III. (iii) The banks shall put in place a Board-approved policy on recovery of excess/wrongful pension payment made to the pensioners (including cut-off period beyond which no recovery shall be made), issue appropriate operating procedure/instructions, institute robust monitoring mechanism, and ensure their strict compliance).

B. Government-Attributed Errors

9. Whenever such excess/wrongful pension payment is made due to Government attributed errors, the banks shall make recoveries based on the instructions received from the Government, presuming that the latter have complied with all the requirements envisaged by law, including court orders. However, if recovery is to be made from the account balance of a pensioner (as distinguished from the amount payable as pension in a month), express authorization from the customer should be made available to the bank and the same should be kept in its records. If doubts arise regarding the instructions issued by the Government, the banks shall take them up with the respective Government, without reference to the Reserve Bank of India.

Chapter IV – Withdrawal of pension by old/ sick/ disabled/ incapacitated pensioners

A. Guidelines on withdrawal of pension

10. In order to take care of problems/ difficulties faced by sick and disabled pensioners in withdrawal of pension / family pension, ABs shall categorize such pensioners as under: (a) Pensioner who is too ill to sign a cheque / unable to be physically present in the branch but can put his/her thumb impression on the cheque/withdrawal form. (b) Pensioner who is not only unable to be physically present in the branch but also not able to put his/ her thumb impression on the cheque/ withdrawal form due to certain physical defect / incapacity.

11. With a view to enabling such old/ sick/ incapacitated pensioners to operate their accounts, ABs shall follow the procedure as under: (a) Wherever thumb or toe impression of the old/ sick pensioner is obtained, it should be identified by two independent witnesses known to the bank, one of whom should be a responsible bank official (b) Where the pensioner cannot even put his/ her thumb/ toe impression and also is unable to be physically present in the bank, a mark can be obtained on the cheque/ withdrawal form, which should be identified by two independent witnesses, one of whom should be a responsible bank official (c) The pensioner may also be asked to indicate to the bank as to who would withdraw the amount from the bank on the basis of cheque / withdrawal form as obtained above and that person should be identified by two independent witnesses. The person who would be actually drawing the money from the bank should be asked to furnish his signature to the bank (d) In case the pensioner cannot sign due to loss of both hands, reference may be drawn to the Supreme Court judgement reported in AIR 1950 – Supreme Court, 265, that there must be physical contact between the person who is to sign and the signature can be by means of a mark. This mark can be placed by the person in any manner. It could be the toe impression, as suggested. It can be by means of mark which anybody can put on behalf of the person who has to sign, the mark being put by an instrument which has had a physical contact with the person who has to sign.