RBI Update - Reserve Bank of India [Disbursement of Government Pension by Agency Banks (ABs)] First Amendment Directions, 2026

The Reserve Bank of India has issued the Reserve Bank of India [Disbursement of Government Pension by Agency Banks (ABs)] First Amendment Directions, 2026, effective immediately, revising the framework for recovery and refund of excess pension payments. The amended directions require agency banks to ensure that no recovery of excess pension is made without prior notice to, and knowledge and consent of, the pensioner, and mandate obtaining a Letter of Undertaking from pensioners for refunding any excess pension credited to their accounts. In cases of bank-attributed errors, such as clerical or calculation mistakes, banks must immediately credit the excess amount to the Government account upon detection, follow the prescribed recovery procedure, and implement a Board-approved policy governing recovery of excess pension payments, including a cut-off period beyond which recovery will not be pursued. For excess payments arising from Government-attributed errors, banks are required to recover amounts based on Government instructions, while ensuring that any recovery from a pensioner’s account balance (other than monthly pension payments) is supported by the customer’s express authorization. Any ambiguity in Government instructions must be referred to the concerned Government authority and not to the Reserve Bank of India.