Centre hikes family pension of PSB employees to 30%, could go up to Rs 35,000

In good news for employees of Public Sector Banks (PSBs), the government has decided to remove the cap on pensions and announced that a uniform slab of 30% on the pensioner's last drawn salary will be in place. Earlier, there were slabs of 15%, 20% and 30% on pensions with a cap of Rs 9,284 per pensioner. The enhancement will allow pensions of up to ₹30,000-₹35,000.

The government has approved the enhanced pension contribution and payout by PSU banks under the 11th bipartite settlement signed by the IBA.

Debasish Panda, secretary, Department of Financial Services, informed that the employer contribution to NPS has also been hiked to 14% from earlier 10%.

When asked about the government's plans to infuse funds in Public Sector Banks, Panda added that PSBs have turned profitable and they have been able to gain the confidence of investors and raise money from the market. 

As per an official release by the ministry, "PSBs have reported a profit of Rs 31,817 crore in financial year of 2020-21 as compared to a loss of Rs 26,016 crore in financial year of 2019-2020. This is the first year when PSBs have reported a profit after five years of losses. Total gross non-performing assets stood at Rs 6.16 lakh crore as of March 2021, reduction of Rs 62,000 crore from March 2020 levels. Number frauds at PSBs have substantially come down to 2,903 in financial year 2020-21 compared to 3,704 in financial year 2018-19."

The information was revealed during the meeting of Union finance minister Nirmala Sitharaman with heads of public sector banks (PSBs) in Mumbai.