Regional Rural Banks Get 5-Year Window to Amortise Pension Dues: RBI

The Reserve Bank of India (RBI) has granted Regional Rural Banks (RRBs) an additional five-year period to amortize their increased pension liabilities, starting from the financial year ending March 31, 2025. This extension comes in response to challenges faced by RRBs in absorbing the heightened financial burden resulting from the retrospective implementation of the RRB (Employees') Pension Scheme, 2018, effective from November 1, 1993.Initially, RRBs were permitted to amortize their pension liabilities over five years, beginning with the financial year ending March 31, 2019. However, the revised implementation date has significantly increased these liabilities, prompting the RBI to allow this extended amortization period. This move aims to alleviate the immediate financial pressure on RRBs, enabling them to manage their pension obligations more effectively without compromising their financial stability. The RBI has also mandated that RRBs disclose their accounting policies regarding this amortization in the 'Notes to Accounts' of their financial statements to ensure transparency and compliance. ​Team Lease Regtech+3Mehta & Mehta+3Business & Finance India+3Mehta & Mehta+2Team Lease Regtech+2Business & Finance India+2Financial Express