Kotak Mahindra Bank has received approval to function as an authorized bank for payment of pensions. This means that now retired individuals can open their pension accounts with Kotak Mahindra Bank.
According to a Ministry of Finance office memorandum, “It is informed that the Central Pension Accounting Office (CPAO) vide its letter dated 23.02.2022 has conveyed its approval to Kotak Mahindra Bank to start its functions for disbursement of pensions as per the guidelines mentioned in the Scheme Booklet.”
The CPAO acts as a link between the pension sanctioning authority (the office where a government employee retired or died) and the pension payment authority (Pay and Accounts Office) and the pension disbursing bank. CPAO issues Special Seal Authorities (SSAs) permitting payment of pension in new and revised pension cases to the CPPCs (Central Pension Processing Centers) of pension disbursing Banks based on pension cases received from PAO, as per CPAO FAQs.
The approval was obtained based on Kotak Mahindra Bank’s approval to act as an Authorized Bank for the payment of pensions.
The Reserve Bank of India has granted the bank the required permissions to begin reporting transactions made by its Central Pension Processing Centre (CPPC) for the daily settlement of pension cases, stated the finance ministry office memorandum.
According to the RBI, “The pension paying banks will credit the pension amount in the accounts of the pensioners based on the instructions given by respective Pension Paying Authorities.”
As per the latest RBI master circular, “It has been decided to discontinue the procedure of forwarding government orders in respect of dearness relief etc. to pension paying agency banks. Agency Banks may, therefore, act on the copies of government orders supplied by government to them through post, fax, e-mails or by accessing from the website and authorize their pension paying branches to make payments to the pensioners immediately.”
Source : https://economictimes.indiatimes.com/wealth/personal-finance-news/kotak-mahindra-bank-gets-approval-to-disburse-pensions/articleshow/90656607.cms