Wary of govt proposal, banks say no to social security pension

Ruchika M Khanna

Tribune News Service

Chandigarh, May 19

Commercial banks in Punjab have refused to come to the help of cash-strapped state government. These banks have chosen to “ignore” the state government’s pleas for disbursal of all social security pensions on reimbursable basis.

Already reeling under the aftershocks of “slow implementation” of the Crop Loan Waiver Scheme, wherein their NPAs (non-performing assets) in agriculture loans have risen phenomenally, banks are wary of taking on this new proposal made by the Institutional Finance and Banking Department of the state government. In spite of several meetings between the state’s Finance Department officials and representatives of banks on the issue, no bank has come forward with a proposal to start the pension disbursal on reimbursable basis.

Since January, the Punjab government has been asking banks to make payments to all social security pensioners — old age beneficiaries, widows and destitute women, dependent children and physically challenged persons — on their own each month. The banks can then claim reimbursement from the state government, for the pensions given by them. However, considering the state’s poor financial health, no bank has reportedly come forward to disburse pension on reimbursable basis. This, even as the state government, in several meetings with banks, has proposed that it will pay the interest for the period that the bank remains out of funds, with service charges.

There are 18,41,115 social security pensioners in Punjab, who are entitled to a monthly pension of Rs 750. These include 12.12 lakh old-age pensioners, 3.52 lakh widows and destitute women, 1.20 lakh dependent children and 1.55 lakh differently abled persons. Almost Rs 130 crore is distributed as pension each month, to these beneficiaries.

The issue was discussed in the State-Level Bankers Committee meeting held here on Friday. A senior official of a public sector bank said banks did not want to take on the role as the “Punjab government’s credit history is not too good”, with the state government often failing to meet its committed liabilities, including paying salaries to its employees on time.

Though the Punjab government has tried to assure banks that the recently imposed Social Security Tax will be used exclusively to fund the pensions, banks are still waiting for the tax to be collected, before they decide on the state government’s proposal.

18.41 lakh beneficiaries may be hit

There are 18,41,115 social security pensioners in Punjab, who are entitled to a monthly pension of Rs 750. These include 12.12 lakh old-age pensioners, 3.52 lakh widows and destitute women, 1.20 lakh dependent children and 1.55 lakh differently abled persons. Almost Rs 130 crore is disbursed as pension each month, to these beneficiaries.