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Updated August 26th, 2021 at 09:27 IST

FM Nirmala Sitharaman okays proposal to increase family pension of bank employees to 30%

Finance Minister Nirmala Sitharaman also approved a proposal to increase the employer’s contribution under the NPS to 14%. Earlier, it was capped at 10%.

Reported by: Aayush Anandan
Bank Employees
Image: PIB | Image:self
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The Government of India accepted a proposal by the Indian Banks' Association’s (IBA) to increase the family pension of deceased bank employees to 30% of their last salary drawn. Debasish Panda, secretary, Department of Financial Services, announced the initiative at a press conference held by Finance Minister Nirmala Sitharaman in Mumbai on Wednesday.

The new initiative will substantially increase the pension amount for the family members of bank employees (as high as Rs 35,000 per family) and help in providing better support. Panda said that the order was in continuation of the 11th bi-partite settlement on wage revision of public sector bank employees. This settlement was approved and signed by the IBA and other bank unions on 11 November 2020. 

Apart from increasing the cap for family pensions, the finance ministry also approved a proposal to enhance the employers' contribution under the National Pension System (NPS) and the latest wage revision. 

Speaking to the press, Panda said, “Earlier, the scheme had slabs of 15%, 20% and 30% of the pay that a pensioner drew at that point of time. It was capped subject to a maximum of Rs 9,284. That was a very paltry sum and Finance Minister Smt Sitharaman was concerned and wanted that to be revised so that family members of bank employees get a decent amount to survive and sustain.”

Increase in employer's contribution 

Finance Minister Nirmala Sitharaman also approved a pending proposal to increase the employer’s contribution under the NPS to 14%. Earlier, it was capped at 10%. The increased employer’s contribution will help improve the financial security of bank employees under the NPS.

Finance Minister Nirmala Sitharaman is on a two-day visit to Mumbai where, among other things, she monitored the performance of public sector banks and introduced the EASE 4.0 reform to introduce the idea of smart banking. 

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Published August 26th, 2021 at 09:27 IST

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