First,
a story.
In a
village, almost every household was keeping
a cat as their pet. Once, there
was a spiritual leader who was giving discourses on various topics of interest.
One day, after he started his discourse,
he found a cat criss crossing the hall disturbing the thought process of the
spiritual leader. So, he ordered one of
his disciple to take it away. But, it returned almost immediately. Then, he ordered his disciple to tie it in a pillar
in the hall till the discourse was completed.
Next time when the spiritual leader commenced his discourse, the cat reappeared and
disturbed the tranquillity of the place. This time, the disciple proceeded to
tie the cat and enabled the spiritual leader to continue with his
discourse. Almost every time when the
spiritual leader commenced his discourse, a cat started coming in and disturbing the discourse
proceedings. So, his disciple also in all reverence to the leader used to tie
the cat in a pillar and enabled the
leader to continue with his discourse. After some time, the spiritual leader
attained mokhsha and one of his senior
disciples was asked to continue the discourses.
The
new spiritual leader chose to move to another village for giving his discourses
so that more people would benefit from them. On the first day of his discourse, at the
appointed time, the spiritual leader was sitting silently and the audience and
the disciples were also sitting patiently for the leader to commence his
discourse. Time rolled and no discourse was in sight for the audience. The audience did not know the reason and one
of them asked a disciple the reason for
the delay. The disciple reasoned out to the person that it was customary for the spiritual leader
to get a cat tied in a pillar before commencing his discourse. Since no cat was
found coming in on its own, a disciple has been despatched to fetch one cat for
completing the ritual. Moral: Over time,
we cling on to the process forgetting the rationale behind it.
Now,
move on to read my real life story.
A few days back, I got an e- mail from
my former employer that a meeting of
pensioners has been organised at the
Regional Office to get the formality of submission of ‘Life Certificates’ completed so that pension from November onwards will continue without any
interruption. I replied saying that I
was away from the station and I would be returning home after a couple of
months. Bang! I got the response almost
instantaneously that my pension will be
resumed after my return to the station and submission of the ‘life certificate’
to the office.
Another situation in the life of a
pensioner. Mr Sundaram
appeared to be pretty desperate
when he asked his son Ramu to get him and his wife a train ticket in A/c
Two tier or Three tier under the Tatkal
Scheme to travel to Pune. The conversation between them proceeded
something like this.
‘Ramu, I have forgotton about my pension
payment. I am required to give the ‘Life Certificate’ to the bank before the
end of November to ensure continuity of getting my pension. So, I will go to
Pune where my pension account is maintained in a bank and return to Chennai after submission of the
‘Life Certificate’ to it. On hearing
this, Ramu just laughed and virtually ignored the request of his father. Sundaram does not seem to give up and pushed
his son to get him a ticket under the Tatkal scheme.
‘Dad, you get a monthly pension of
Rs.7500/-. For you and Amma to go to Pune and return to Chennai by train using
Tatkal Scheme for both ways would mean an expenditure of about Rs.5000/. So, it
is not worthy to go now spending so much on travel cost of both of you.’
Another conversation between a pensioner
and his family members went like this.
‘Somehow, I will have to go to the pension
payment office in Teynampet before the
end of this month (November) to submit my ‘Life Certificate’. My health does
not permit me to travel by a public transport system. But, to go from my home at Oragadam and come back using
an auto-rickshaw or a taxi would
mean a minimum expenditure of Rs. 2000/- and with my pension of only Rs.5000/-, it is going to be a big drain on my resources.’
Come November every year, Pensioners (both
Central Government and State Governments) all over India are becoming more
nervous in complying with the requirement of this peculiar pension rule of presenting
oneself physically at the pension payment offices for submission of ‘Life
Certificate’ to them. It is compulsory
for a pensioner to furnish a Life Certificate in November. This practice, it
appears has been adopted by the Government of India from the British system of
payment of Pension to their retired personnel.
According to the 6th Central Pay
Commission Report, there were as many as 3.84 million pensioners covered under the Central
Government Scheme in 2006-07 which would have gone up to 5.0 million pensioners
now. It is estimated that out of 1.1
million strong army, there is a larger
force of about 2 million pensioners or retired soldiers for every serving
soldier. Each year, about 55,000 defence personnel retire from their services
add up to this growing number. Besides
this, there are those pensioners of various state governments, those covered under
various pension schemes such as i National Old Age Pension Scheme (one estimate
indicates that there are about 4.26 lakh such pensioners in Karnataka alone),
National Widow Pension Scheme, Disability Pension Scheme etc. The State Bank of India, the largest bank in
the country indicates that there are over 1.20 lakh pensioners on their rolls
covering the retired employees of the then Imperial Bank of India and the
present SBI. In addition, a large number of public sector undertakings
like the LIC, the General Insurance Companies, the PSBs, oil companies, those
in steel and mining, institutions like the RBI, the NABARD and a host of
various other organisations covered under the Centre and the States have their
huge stock of pensioners. On the back
envelope calculation would put the figure of about 30 million pensioners in the
country . All these people would be required to submit their Life Certificates
to prevent the ‘Life Threatening stoppage of Pension’ if the certificate is not
submitted. Most of them would have
crossed the age of 70+ years and having one or more age related health issues
making it difficult for them to move physically to their pension payment
offices (including bank branches wherever payment is routed through bank
branches).
It involves a huge movement of people –
from a shortest distance of a few hundreds of metres to thousands of kilometres from their home to
the pension payment office . It involves crores and crores of paper work for
all those concerned (as many Life Certificates as the living number of pensioners),
filing and verifying these records for auditing and other purposes. It involves
a huge drain of financial resources in terms of travel cost, opportunity cost by way of income
foregone as at least a day will be lost in physical travel to and from the
pension payment office, for those
pensioners whose pension amount is pretty small and employed. Is there
any thought to reduce the rigour of these pensioners to make their lives more
comfortable? Here are a few suggestions.
(1) Why at all a pensioner to
submit Life Certificate? What is the rationale in asking every pensioner to
submit life certificate every November?
With information
technology in place in the banking system, the Government of India may revisit
the extant guidelines on submission of
Life Certificates and dispense with the practice wherever needed (like those
having bank accounts) and / or modify them to be more user-friendly. The system
was introduced during the British days.
Then, submission of Life Certificates was considered necessary as the
payments were made to the pensioners in cash through money-orders of Post
Offices or through government treasuries. With the banking system in place and
virtually 100% of pension payments are made through banks, where is the need for submission of life
certificates by the pensioners as the pensioners are otherwise also required to
visit branches of banks from time to time to draw pension and do other banking
transactions? In the last few years, the
country has witnessed tremendous advancement of information technology in
banking with Core Banking Solutions (CBS) introduced in all banks. This has enabled the people to access their
bank accounts sitting in the comforts of their home. Less privileged can access by visiting
nearest bank branches of the same bank where they can do their banking
services. If a customer has a bank account, he/she is not
asked to furnish the life certificate every year. Then, why should a pensioner be asked to
furnish it every year though he/she also has a bank account through which
his/her pension is received every month?
Is the fear that the
families of pensioners would misuse the system? Else, what? There is no study or empirical evidence to prove
that in the absence of submission of
life certificates, the families of pensioners
(in the event of the death of the pensioner) would misuse the system and continue to draw the
pension fradulantly. If this logic is
applied, then hypothetically, if a pensioner dies immediately after submitting
the life certificate during November, the family of the pensioner can misuse it
for another one year. So, such
situations are not likely to happen as deliberate. The risk of misuse of this
system may be far and few between which can be addressed through use of
similar guidelines available for such
mal-practices for bank customers and others.
It is understood
that in the USA where pension/ social
security payments are made, the entire system is programmed to provide
information on-line and thus they have virtually dispensed with the use of paper work and calling for life
certificates from the pensioners.
(2)
In case, the Pension Authority
still feels that submission of life certificates by the pensioners serves some purpose, following modifications
can be considered in the existing guidelines for submission of life
certificates.
i.
The Central Pension Authority
has issued a notification which provides exemption from personal appearance of
the pensioner to the bank for submission of Life Certificates. It has listed 11 categories of persons who
can issue such a certificate. Besides, in the case of a pensioner drawing
his/ her pension through a Public Sector Bank, the Life Certificate may be
signed by an officer of a PSB and not by
the same branch of the bank which disburses the pension. But,
in practice this is observed more in breach and not followed. So, the first step toward this would be to create awareness among the officials of
bank branches and more particularly the pensioners of their right to use this
facility. This can be achieved by inserting advertisements in leading
newspapers during October-November by
the concerned Ministry at the GoI level,
the Indian Bank Association on behalf of all the PSBs, concerned State
Governments etc.
ii.
Why not stagger submission of
life certificates over a period of 3 months instead of mandatory in November
only? One should see the crowd of pensioners in branches of SBI jostling for space in submission of life certificates.
It is sometimes pathetic to see them waiting for hours to comply with the
requirement.
iii.
In addition, the penetration of
mobile phones in the country with an estimated users of over 886 million is
phenomenal. For transfer of funds and payment of bills through online mode,
banks follow a system of providing a
‘One-Time Password’ (OTP) to their
customers. On similar lines, when a pensioner wants to submit his / her Life
Certificate through on-line mode (submission of Life Certificate does not
require the signature of the pensioner and it requires only the signature of
the person authorised to issue it), such
OTP may be provided to those pension account holders having mobile phone
facility and registered the same with the bank concerned. On
receipt of the OTP in their registered mobile phone, the pensioner concerned should be allowed to submit the form
online without the need for submission
of a signed Life Certificate.
iv.
In addition, for those
pensioners having some form of fixed deposit accounts with the bank which also
disburses the pension, it can automatically record the life certificate on
behalf of that particular pensioner and continue to release the pension without
any stoppage for want of a life certificate. This logic is based on the
practice of allowing an account holder
to make deposits in any branch and accepting it for credit of his/her account
in another branch without any need for
visiting the branch concerned and without insisting on a life certificate
every time when such deposits are made.
v.
Another revolution taking place
in the country is introduction of
Aadhhar numbers to its citizens. The RBI
has directed the banks to allow use of Aadhhar number as compliance of Know
Your Customer (KYC) norm required for opening any bank accounts. With about 700
million Aadhhar enrolments so far, it
should be possible to track the person concerned without much difficulty. Aadhhar portal may introduce such facility to
the number holders and register the life certificates of such holders and it
can pass on these life certificates to various pension agencies for their
on-line record.
vi.
Now issuing of death
certificate has become mandatory and computerised in almost in all the
states. So, the application for death
certificate may include a couple of columns to include information whether the
deceased was a pensioner and if so the details of bank account or if linked
with Aadhaar then the Aadhaar number may be provided. Aadhaar agency may advise
about the death of the individual to the bank if its number linked and pension stopped.
vii.
RBI / NABARD has provided
medical insurance to all the pensioners. So, virtually there is no scope for
any pensioner dying without the information reaching the RBI/NABARD.
We must
work towards compliance of submission of life certificates through on-line system and save the
trees from the jaws of death.
So, to start with, the RBI may issue
instructions to all the pensioners that
in the event of their death, their dependent(s) should inform the RBI
about it within a month. If not done, then RBI may recover the excess amount
with penal interest from the family pension paid thereafter and in case of
family pensioners the same may be collected from the dependents. Such
situations may be far and few between. Meanwhile, the RBI/ NABARD may not
insist upon giving life certificates by the pensioners.
These measures would also
make the life certificate
submission process a Greener Compliance one and the Government(s) may get Carbon Credits for
such measures from which they can gain popularity and become environment
friendly too. Will they bring smile on the faces of Pensioners and make
Novembers a quiet month
to spend?
[1] Dr S Santhanam,
PhD(Eco), CAIIB, General Manager, NABARD (Retd) and Consultant (Development
Finance), Flat No.311, SIS Danube, Jayachandran Nagar, Jaladampet,
Pallikkaranai, Chennai 600100. Mobile: +919850839776.
