Updation of pension in Banks

(M.K. Ravindran case before Honourable High Court of Kerala)

S. Harirao


M.K.Ravindran, Manager retired in the year 2001 from Union Bank of India, filed a writ petition in 2018 before Honourable High Court of Kerala for updation of pension. The Honourable Court through its order dated 16.08.2022 has directed the petitioner to file a detailed representation to Union Bank of India and directed the Bank to dispose of the representation within 2 months. The petitioner submitted his representation on 20.09.2022. Ravindran represented to the Bank to update his pension in consonance with the revised pay bands of subsequent bi-partite settlements after his retirement, and to pay arrears with 12% compound interest as the amount detained has been earning similar interest.


The Bank Management in its detailed reply, in rejecting the representation, relied on the pension settlement clauses and opined as follows:

  1. Clause 12 of the bi-partite settlement 1993 defines only the scope of future negotiations and does not provide for updation of pension. But in the Pension settlement signed in 1995 there was no incorporation of Central Civil Services Rules or the Reserve Bank of India. The provisions are attracted only when the pension regulations are ambiguous and need some clarifications, but cannot be used to supply what has been omitted in the pension scheme.
  •  The pension of government servants is treated as revenue expenditure and gets necessary budgetary allocations whereas in Bank it is in lieu of Management’s PF Contribution.

Hence he cannot claim as there is no parity between two sets of employees i.e. RBI/Civil services employees and Bank Employees, though they retire in the same rank, they are not of same class or homogeneous group.

  • The contention of Ravindran that of “unjust enrichment of the bank” of pension fund is not factually correct as every pension fund is actuarially valued after looking into various assumptions and accordingly Bank provides funds for current and future obligations. For clarity, as the pension fund has grown many fold over a period, there is also many fold increase in obligation of Bank’s liability on account of periodical increase of salary.


It is accepted by the management itself that there is scope for future negotiations for pension updation and related benefits as available for Central Civil service and RBI employees.

  1. While comparing the pension fund of the Bank with that of budgetary allocations for pension payments through revenue expenditures, it conveniently ignored that the pension and updation of pension in RBI is also from that of Pension Fund. 
  • The contention of the management that the liability also grows with the growth of the pension fund is a shallow argument, because with increase of salary of the employees the matching contribution is also increasing. Further, managements are not ready to share the data on pension funds details and the actuarial calculations with the Unions.  Also, when the management is ready to contribute 14% of basic and DA for the NPS Fund, it is moral and legitimate obligation on their part to allocate matching CPF to the pension fund.

To sum up, as admitted by the management, there is scope for negotiation for updation of  pension in commercial banks in line with Reserve Bank of India where pension is paid  from Pension Fund. The  need of the hour is the united struggle of the Bank employees, both serving and retired to achieve the long time genuine demand of updation of pension and related improvements and also to reject NPS and bring every employee  to the defined pension scheme.


  1. We said !
    In RBI pension uptation was achieved only after the struggle.
    Let the UFBU make the struggle call for
    Pension uptation and Old Pension Scheme !

  2. சிறப்பான முன்வைப்பு!
    பழைய ஊதியம் திருத்தப்பட்டு புதிய அடிப்படை சம்பளம் நிர்ணயம் செய்யும் பொழுது அதன் பேரில்,2010க்கு முன்பு சேர்ந்த ஊழியர்களுக்கு, ஓய்வூதியமும் திருத்தப்பட்ட அடிப்படை சம்பளத்தின் பேரில் தானே ஐபிஏ கொடுக்கும். இல்லை…. இவ் ஊழியர்களுக்கு ஓய்வூதிய நலன்களுக்கு தனியான ஒப்பந்தம் போடுமா ?
    பழைய சம்பளம் திருத்தப்பட்டு புதிய சம்பளத்திற்கு ஓய்வூதியம் கொடுக்கும் பொழுது, அதன் பேரில் உள்ள பணி ஓய்வு பெற்றோர்க்கு புதிதாக கட்டமைக்கப்பட்ட ஓய்வூதியம் தர மறுப்பது தர்க்க மற்றும் இயற்கை விதிகளுக்கு முரணானது !

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