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Informist, Wednesday, Jun. 24, 2026

--RBI issues revised norms on govt pension disbursement by agency banks 

--RBI:Bks can't recover wrongly credited pension without notice to pensioner 

MUMBAI – The Reserve Bank of India released revised guidelines on Wednesday for agency banks handling pension disbursals. Under the new rules, banks cannot recover accidentally credited pension amounts from a pensioner's account without first informing the pensioner.

If the incorrect payment was made by the government, banks must follow the government-issued recovery guidelines and recover the pensioner's authorisation before deducting any amount from their account. If the error was caused by the bank, the full amount must be credited back to the government immediately. Banks are also required to put in place a formal policy and operating procedure for recovering wrongful pension payments, along with strong monitoring mechanisms to ensure compliance.

For bank-attributed errors, the RBI has outlined three recovery methods: deducting from the surplus balance above a set threshold, deducting a percentage of the monthly pension, or recovering in a lump sum or customised installments. No recovery can be made after the specified cut-off period unless fraud is detected or a court orders it.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Janwee Prajapati

Edited by Akul Nishant Akhoury

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