Settlement of Terminal Benefits

e-Circular P&HRD. Sl. No. : 160/2006 - 07 Circular No. : CDO/P&HRD-PM/12/2006 - 07 Saturday,July 01,2006. .

The Chief General Manager, State Bank of India, All Local Head Offices, All Heads of the Depts. of Corporate Centre/CO estbs. Dear Sir, EXPEDITIOUS SETTLEMENT OF TERMINAL DUES TIME NORMS IN CASE OF VOLUNTARY RETIREMENTS/ RESIGNATION AND EXIT OPTION In terms of Rule 33 of SBI Employees Pension Fund Rule, interest on monies standing in the books of the provident fund to the credit of member ceases on the date he leaves the service of the Bank or the day on which he dies, whichever happens first. As such all terminal benefits viz. Provident Fund Balance, Pension, Gratuity and other benefits should be paid/settled on the date of retirement of the member. We have, therefore, advised all branches/offices that entire processing of terminal benefits should commence 6 months prior to the date of retirement of an employee. It has also been advised that in respect of deceased cases, controller should depute an employee to call on legal heirs of the deceased employee as early as possible to guide and help them in completing the necessary papers so that the family of the deceased should receive the payment within three months following submission of completed application by them. 2. However, in respect of employees seeking voluntary retirement, resignation, or exit option etc., it is difficult to ensure refund of terminal benefits on the day of retirement/release from the Bank's service, despite the notice period of three months in case of officers (maximum four months in case of exit option) and one month in case of award staff. As the processing of terminal benefits starts only after receipt of approval for resignation, exit option, voluntary retirement, from the competent authority, sufficient time is not left for processing the proposals before the due date of retirement/release from the service and Bank has to pay interest on delayed payment of terminal dues. We have to find the ways and means to avoid this extra cost.

3. It has accordingly been decided with the approval of the appropriate authority that the following procedure be followed henceforth to reduce the delay in processing of the proposals in respect of officers/employees retiring under voluntary retirement/ leaving the Bank's service under exit-option/resignation. i)

On receipt of the application for exit option/voluntary retirement/resignation, while giving the acknowledgement to the employee (on proforma I enclosed to our Circular no.PA/CIR/99 dated the 29th March,1994 in case of voluntary retirement and proforma as per Annexure II to our Circular no. CDO/PM/1437-A08 dated the 29th April, 2005 in case of Exit Option Scheme) a suitable clause has been incorporated therein advising that since the employee is leaving Bank's service as per his own convenience under exit option/voluntary retirement/resignation, sufficient time is not available for processing the terminal benefits in time, therefore, his terminal benefits will normally be settled within 30 days from the date of his actual release from service provided he has given the required notice as provided for in State Bank of India Officers Service Rules/instructions under Exit-option Scheme and Bipartite Settlement/ instructions on resignation for award staff employees. Interest on delayed payment of terminal benefits will become payable only after 30 days from the date of actual exit /voluntary retirement/resignation. In cases where resignation/voluntary retirement requests are made by serving only partial notice, interest on settlement of terminal dues shall become payable only if these are not paid even after lapse of period equal to the shortfall in notice period and adding thereto 30 more days. Such period shall be counted from the actual date of release of the employee/officer. Amended specimen letters to be addressed to employees/officers who submit application for resignation/voluntary retirement or exit option are enclosed which should be brought in use with immediate effect.

ii)

The application for payment of terminal benefits should also be obtained from the concerned employee by the Branch/ establishment simultaneously and the processing of terminal benefits should begin without waiting for the approval of the Competent Authority’s sanction for resignation/voluntary retirement/release under exit option.

iii)

PPG Department should submit their recommendations to the Trustees for sanction of the terminal benefits and follow up should be done for obtaining approval of the Competent Authority.

iv)

The sanction of the Trustees/appropriate authority, as the case may be, should be advised to the Branch/establishment where the employee is posted with the condition that terminal benefits should be released only after the date on which the voluntary retirement/exit option, resignation takes effect. The

Branch/establishment would have already received the approval of the voluntary retirement/exit option before that. A copy thereof should be sent by the concerned department/branch to the PPG Department at LHO/Corporate Centre, as the case may be as also to the Central Account Office, Kolkata. v)

In case the request of the employee/officer is declined by the Competent Authority for resignation/voluntary retirement/release under Exit Option Scheme, or if the request for leaving the Bank's service is withdrawn by the employee/officer before the due date of his sanctioned release, following steps should be taken immediately. a. Branch/office concerned should immediately advise his controller and PPG Department at LHO/Corporate Centre (as the case may be) directly by fax/courier advising that request of the employee/officer for leaving the service has been declined/withdrawn; b. Conditional sanction of Trustees for settlement of terminal dues received at the branch/office wherefrom the employee/officer was due to be relieved under exit option/voluntary retirement/resignation should not be acted upon. It should be returned in original to the PPG Department at LHO/Corporate Centre, as the case may be. c. PPG Department at LHO/Corporate Centre should advise Central Accounts Office, Kolkata regarding non-utilisation of sanction of Trustees for settlement of terminal dues advising reasons therefor.

4. Please arrange to issue suitable instructions and bring the contents of this circular to the notice of all officers/staff members working in offices/branches under your control. Yours faithfully,

for Dy. Managing Director & Corporate Development Officer vk/cir-time/Encl :

Ref: Circular No. PA/CIR/99 dated the 29.3.1994 Modified Proforma I Shri

Date :

Dear Sir, VOLUNTARY RETIREMENT/RESIGNATION We acknowledge receipt of your letter dated requesting for voluntary retirement/resignation from Bank's service w.e.f service of due notice/without/ partial notice.

on

2. Please note that your application is being forwarded to the competent authority through proper channel for consideration. Meanwhile, unless and until approval of the competent authority is communicated to you, you will continue to be in the Bank's service and report for duty as usual. You shall not be deemed to have retired from the service of the Bank. 3. Please note that as you have submitted application for Voluntary Retirement/Resignation from the Banks’ service as per your own convenience by serving three months notice, sufficient time is not available for settlement and final payment of terminal dues to you on the date of your release. Therefore, interest on terminal dues shall become payable if these are not paid even after lapse of 30 days period from the date of your actual release from the Bank's service. OR * Please note that as you have submitted application for Voluntary Retirement/Resignation from the Banks’ service as per your own convenience by serving only partial notice, sufficient time is not available for settlement and final payment of terminal dues to you on the date of your release. Therefore, interest on terminal dues shall become payable if these are not paid even after lapse of period equal to the shortfall in notice period and 30 more days thereafter from the date of your actual release from the Bank's service. 4. In view of the pending disciplinary proceedings against you/your suspension from service, you cannot leave Bank's service in terms of Rule 20(2) of the SBI Officers Service Rules, until you hear from the competent authority.

5. Please return the duplicate copy of this letter as a token of having noted the contents. Yours faithfully,

Branch Manager/Dy. General Manager/ Departmental Head. * Strike out whichever is not applicable.

Signature of the employee with date. ______________________

REFER: CDO/PM/1437-A/CIR/08 DATED 29th April, 2005 Modified Annexure II

ACKNOWLEDGEMENT Received an application from Shri/Smt.____________________________________ for voluntary release of service under Exit Option on _____________________________. He/ She is requested to please note that the application is being forwarded to the Competent Authority through proper channel for consideration. Meanwhile unless and until decision of the Competent Authority is communicated to him he will continue to be in the Bank’s service and report for duty as usual. 2. Please note that as you have submitted application for exit option from Bank's service as per your own convenience, sufficient time is not available for settlement and final payment of terminal dues to you on the due date of release. Therefore interest on terminal dues shall become payable if these are not paid even after lapse of 30 days period from the date of your actual release from the Bank's service. 3. Please return the duplicate copy of this letter as a token of having noted the contents.

Place:______________ Date:

BRANCH MANAGER/HEAD OF DEPT.

Received

__________________________ Signature of the officer with date.