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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Amortisation of additional pension liability - Implementation of Pension Scheme in Regional Rural Banks with effect from November 1, 1993 - Prudential Regulatory Treatment

20-Mar-2025 | RBI/2024-2025/127 DOR.ACC.REC.No.67/21.04.018/2024-25

RBI has issued a notification regarding Amortisation of additional pension liability - Implementation of Pension Scheme in Regional Rural Banks with effect from November 1, 1993 - Prudential Regulatory Treatment, effective from 20th March 2025. In reference to NABARD circular No. NB.DoS.Pol.HO/2533/J-1/2019-20, Regional Rural Banks (RRBs) were permitted to reduce or gradually spread out their pension liability on account of RRB (Employee) Pension Scheme 2018 over a period of 5 years starting FY ending on 31st March 2019. By virtue of this circular, it is notified that RRBs are now required to implement the pension scheme with effect from 1st November 1993 and follow the following course of action in order to deal with the difficulties in absorbing the liabilities in single year - 1. Fully recognize the liability on account of applicability of pension scheme as per the applicable standards. 2. The expenditure in revision of pension may be amortised over a period of 5 years starting with the financial year ending March 31, 2025, subject to a minimum of 20% of the total pension liability involved being expensed every year. 3. Disclosure shall be made in 'Notes to Accounts' in the financial statements regarding accounting policy followed in this regard. Kindly refer to the attached document for more information.

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