Rajan regrets he didn’t do what he could for RBI retirees

Raghuram Rajan may not be RBI Governor any more but he might just have sown fresh hopes in the minds of Reserve Bank retirees that their long-pending demand for pension updation would get a fresh look-in.

The hopes stem from the former Governor’s expression of regret in his book, I do what I do , for his failure to do what he probably could, with respect to pension updation in the RBI.

On page 211 of the book, Rajan states as follows: “...On the internal front, my biggest regret is that I could not solve a long-pending matter that I inherited from my predecessors: securing for retired RBI staff the same pension benefits that government employees enjoy, despite repeated government assurances that the matter would be addressed. I hope the government will do the right thing here...”

Periodically augmented

The RBI had committed to its employees through a circular of March 13,1992, that pension will be revised as and when serving employees’ wages are revised.

The pension fund maintained was periodically augmented taking into account current and future liabilities towards payment of committed pension.

Pension updation was granted on wage revisions effected in 1987, 1992 and 1997 in the RBI. Therefore, pre-1997 retirees continue to draw the benefits of pension revision.

The status quo was disturbed when the Centre later told the RBI that it had no powers to revise pension without seeking its prior approval.

Senior citizens’ group

This put a cloud over the wage revision decisions of 2002 and 2007, which stays unresolved till date. The issue affects a senior citizens’ group comprising a few ex-gratia beneficiaries (aged 90 plus), family pensioners and pensioners numbering a few thousand.

The RBI maintains a pension fund created out of surrendered value of its contribution to provident fund, otherwise payable to employees, and additional contributions from its income every year based on actuarial calculations to meet present and future pension liabilities.

“Among retirees who have died and those who survive are individuals who have contributed to the RBI’s growth and reputation, which, if converted into ‘equity’ would get converted to several crores considering its present value,” says a retiree.

Another wrote to the Governor, saying, “The waiting has been gruelling. It would be graceful on the part of the bank to be kind enough to give the final word, positive or otherwise, without further delay and allow us the luxury of a peaceful exit.”

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