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Informist, Thursday, Mar. 20, 2025

 

NEW DELHI – The Reserve Bank of India on Thursday said regional rural banks can amortise their pension liability over a maximum of five years starting 2024-25 (Apr-Mar). This follows a government decision in October that the pension scheme for regional rural banks will be implemented with effect from November 1993 instead of April 2018, as per the Regional Rural Banks (Employees) Pension Scheme 2018, after the Supreme Court ordered parity in superannuation benefits for employees of regional rural banks with those of nationalised commercial banks.

 

The regional rural banks have been given the relaxation in view of the difficulties expressed in absorbing the increased liability in a single year, the RBI said adding that the liability on account of the pension scheme must be fully recognised as per applicable accounting standards and that pension-related unamortised expenditure need not be reduced from tier-I capital of a bank.

 

"Appropriate disclosure of the accounting policy followed in this regard shall be made in the 'Notes to Accounts' to the financial statements. Banks shall also disclose the amount of unamortised expenditure and the consequential net profit if the unamortised expenditure had been fully recognised in the Profit & Loss Account," the RBI said in a notification Thursday.  End

 

Reported by Siddharth Upasani

Edited by Saji George Titus

 

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