Bank employees’ pension payouts hiked to 30%

The Finance Ministry said on Wednesday that the proposal to enhance family pension and bank employer’s contribution under NPS has been approved by Finance Minister Nirmala Sitharaman. The benefits would accrue to family pensioners. The ministry said that the cap on pay has been removed and uniform slab of 30 per cent will be enforced. The Department of Financial Services (DFS) said that pensions can go as high as Rs 35,000.

The DFS Secretary said that there will also be a rise in the contribution of bank employers in NPS. It will go up from 10 per cent to 14 per cent, said DFS Secretary Debasish Panda.

“Pension payouts to bank employees could increase to Rs 30,000-35,000 from the earlier cap of Rs 9,284. PSBs’ contribution for employee pensions under NPS hiked to 14 per cent from 10 per cent earlier,” said DFS Secretary.

FM Sitharaman said that the government will have a bare minimum presence in the ‘strategic sectors’ that also include banks and financial services. She said that public sector banks have done well and have come out of Prompt Corrective Action despite the pandemic. PSBs are showing profits and two of them have done very well, she said.

The minister stated that deposits have been piling up in the states of eastern India, but credit too needs to be expanded. “Banks have been asked to create state-wise plans for the North East focusing on logistics, exports from the area,” stated the Finance Minister.

“With changed times, now industries have the option of raising funds even from outside the banking sector. Banks themselves are raising funds through various avenues. These new aspects need to be studied to target credit where it is needed,” she said.

FM Sitharaman said, “From inputs given by officers from tax administration, it has emerged that banks need to understand the special requirements of sunrise sectors such as fintech. One such sector can provide technological help to banks as well as can benefit from help from the banking sector.”

Also read: Support emerging sectors like fintech, Sitharaman tells PSBs