RBI tightens rules on recovery of excess pension payments

Mumbai: The Reserve Bank of India (RBI) on Wednesday directed banks not to recover excess pension payments from government pensioners without first informing them and, where required, obtaining their consent, strengthening safeguards against abrupt debits from pension accounts.

In an amendment to its pension disbursement directions, the RBI barred the recovery of excess amount from the pension of a government employee without the pensioner's knowledge and consent, or without a prior notice.

The central bank also asked banks to obtain a written undertaking from pensioners at the time of account operation. According to the directions, 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."