The disbursement of pension will be authorised through the following channels viz:
(i) Central Pension Processing Centres (CPPCs) of Authorised Banks
(ii) PAOs
(iii) Treasuries
7.5.1 Payment of Pension through Central Pension Processing Centres (CPPCs) of Authorised Bank
(i) *The retiring employees/pensioners are to open a pension account with CBS enabled branches of the Authorised Bank.
(ii)*The branch in which the pensioners hold his pension account will be referred to as his Home Branch hereafter.
(iii) Pensioners are given option for getting their pension credited to their saving bank accounts (either single account in their names or joint account with their spouses (only if they are coauthorised as family pensioners) operated either by ‘Former or Survivor’ or ‘Either or Survivor’ basis). The Pensioner must be the primary holder of the account in case of the joint accounts**.
(iv) All Pr. Chief Controller of Accounts/Chief Controller of Accounts/Controller of Accounts (with independent charge) in charge of the Accounting Organisation, AG and Director of Accounts, as the case may be, will forward the ‘Facsimile of Special Seal’ and specimen signatures of the Pay and Accounts Officer entrusted with the issuing of PPOs to the CPAO. In case of a change in the incumbency of the nominated PAO, the specimen signature of the new officer will be sent to the CPAO duly attested by the relieved officer.
*(Para 4.1.1, 4.1.3 and 4.1.4 of Accounting and Operating Procedure for Central Pension Processing Centre of Authorised Banks for Pension Disbursement to Central Government (Civil) Pensioners) **(OM No. CPAO/IT&Tech/Bank Performance/37(Vol-II)/2016-17/14 dated 19.04.2017)
7.5.2 All PPOs and subsequent amendments to PPOs issued by PPO issuing authorities will be sent to the CPAO under Special Seal Authority for arranging payment through authorized Banks. PPOs will be sent to CPAO under the forwarding letter in APPENDIX 7.2 & 7.3 to this Chapter.
7.5.3 The CPAO will enter the following particulars in the CPAO Data Bank.
(i) PPO number and date
(ii) Class of pension
(iii) Name of pensioner and family pensioner
What This Means
This paragraph describes the three channels through which pension can be disbursed: Central Pension Processing Centres (CPPCs) of authorized banks, PAOs, and treasuries. Most pensioners now receive pension through authorized bank CPPCs. The retiring employee opens a pension account at a CBS-enabled branch, and that branch becomes their Pension Account Home Branch (PAHB). The CPPC processes all pension credits centrally. The paragraph details how banks must handle the first pension credit, monthly processing, half-yearly returns, life certificate requirements (due in November, or October for 80+ pensioners), and the Jeevan Pramaan digital life certificate system. It also covers payment through PAOs for exceptional cases and the now-closed treasury payment channel for post-1990 PPOs.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1Three pension payment channels: Bank CPPCs, PAOs, and Treasuries (treasuries largely closed post-1990)
2Pensioners open CBS-enabled bank accounts; the branch becomes Pension Account Home Branch (PAHB)
3Life certificate must be submitted in November annually (October if pensioner is 80+)
4Jeevan Pramaan (digital life certificate) system is available as an alternative
5Banks must credit pension by the last working day of each month
Practical Example
A retiring Deputy Secretary opens a pension savings account at the SBI branch near her home. This branch becomes her PAHB. After her e-PPO is processed by CPAO and sent to SBI's CPPC, the CPPC begins crediting her pension on the last working day of each month. Every November, she submits her life certificate at the PAHB — or uses the Jeevan Pramaan app with Aadhaar biometric authentication to generate a digital life certificate without visiting the bank.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can a pensioner draw pension from any bank branch?▼
The pension is linked to a specific Pension Account Home Branch (PAHB) where the pensioner opens the pension account. However, the pensioner can access funds from any branch of the same bank through CBS.
What is Jeevan Pramaan?▼
Jeevan Pramaan is a digital life certificate system that allows pensioners to submit their annual life certificate online using Aadhaar-based biometric authentication, eliminating the need to physically visit the bank.
When is pension credited each month?▼
Pension is credited to the pensioner's account by the last working day of each month by the bank's CPPC.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
(iv) Department/Ministry in which the pensioner was last serving
(v) PAO issuing the PPO with Code Number
(vi) Date of Birth of Pensioner and Spouse
(vii) Date of Joining Govt. Service
(viii) Date of retirement of pensioner/Date of Death of Pensioner in case of family pension case
(ix) Gratuity amount paid
(x) Commutation amount paid by PAO or payable by Bank
(xi) Date of commencement of pension
(xii) Gross amount of monthly pension
(xiii) Commutation of pension
(xiv) Reduced amount of monthly pension on account of commutation
(xv) Family pension
(xvi) Monetary allowance attached with Gallantry Award (if applicable)
(xvii) Fixed Medical Allowance
(xviii) Constant Attendant Allowance
(xix) IFSC Code of the bank branch opted by the pensioner
After verifying the signature of the Pay and Accounts Officer who has issued the PPO and the Special Seal of his/her office the authorised officers in CPAO will transmit the PPO under the Special Seal Authority in APPENDIX 7.4 to this Chapter to the CPPC of the Authorised Bank for arranging payment through the Pension Account Holding Branch (PAHB) of the Pensioner.
7.5.4 The detailed instructions to be followed by the authorised Banks in crediting pension into the pensioner’s account have been incorporated in the book, titled ‘Scheme for Payment of Pensions to Central Govt. Civil Pensioners by Authorized Banks’. It includes instructions on keeping record of PPOs received, keeping the pensioners informed of the movement of pension documents, duties and functions of PAHB before starting payment, functions of CPPC of the Authorised Banks for obtaining reimbursement of payment made, procedure for reimbursement to Banks, certificates to be furnished by the pensioners, procedure for transfer of pension payments from one branch / Bank to another, and payment of dearness relief and family pension, etc.
7.5.5 It must be ensured that arrears of pension due to the pensioners on account of delayed finalization or for any other reason have been correctly worked out. They must be paid to the pensioners in accordance with the provisions of various rules and orders applicable, by the PAOs (for cases which have been delayed for over one year) the format for schedule of such pension payments to be maintained by the concerned PAO has been indicated in APPENDIX 7.5. In all other cases the arrears as well as the future monthly
7.14.1 Pension to Central Civil Pensioners in Sikkim will be disbursed only through State Bank of India, Sikkim. The detailed procedure to be followed, in such cases, will be the same as outlined in para 7.5 above.
7.14.2 Finance Department of the Govt. of Sikkim will continue to make payment of pension to the existing Central Civil Pensioners. After making payment they will claim reimbursement from the CPAO, duly supported by relevant vouchers and other documents. On receipt of the claim and after necessary scrutiny, the CPAO will reimburse the amount by Demand draft/ cheque drawn in favour of Secretary, Finance Department, Govt. of Sikkim, Gangtok, and account for the debit under the final head of account.
7.15 ACCOUNTING OF PAYMENT OF PENSIONS TO FOREIGN PENSIONERS IN INDIA
7.15.1 Payment of pensions is also made to Indian nationals on behalf of some foreign Governments. They can be broadly classified as:
a. Burma (Myanmar) Civilian Pensioners and Family Pensioners; b. Singapore Pensioners; c. Sri Lanka Pensioners; and d. Pakistan Civil Pensioners and Family Pensioners.
7.15.2 Burma (Myanmar) Civilian Pensioners/Family Pensioners: In the case of Burma (Myanmar) Government pensioners who are Indian nationals, necessary sanction and PPO will be issued by the AG, Burma, and sent to the AG of the state where the pensioner intends to receive his pension. The pensioners will draw their pension from the Treasury offices concerned. The expenditure on this account will be debited by the State AG against the major head ‘8679 - Accounts with Governments of Other Countries -Government of Burma’. The State AG will send a debit claim to the AG, Burma, duly supported by paid vouchers. Simultaneously he will also send necessary advice to the RBI, Central Accounts Section, Nagpur, for obtaining necessary reimbursement from the foreign Government. On receipt of necessary reimbursement advice from the RBI, CAS, Nagpur, the transitory head of account 8679 - Accounts with Governments of Other Countries will be cleared, and paired off by the State AG.
The State AG will also be responsible for issuing necessary amendment to the Pension Payment Orders in the cases where the Burma Civilian Pensioners/Family Pensioners are drawing their pensions from treasuries located under their jurisdiction. In the case of pensioners drawing their pension from treasuries located in Union Territories, the Pay and Accounts Officer, DEA, New Delhi will undertake the work of issue of amendments, etc.
In the case of Burma Government pensioners who are drawing their pensions from Treasury offices in Union Territories (with or without legislature), the AG or Pay and Accounts Officer (where the accounts have been departmentalized) will raise necessary debit against the Pay and Accounts Officer (Foreign claims), DEA, New Delhi. After making reimbursement to the
AG or PAO of the Union Territory, as the case may be, by debit to the transitory head of Account ‘8679 - Accounts with Governments of Other Countries’, the Pay and Accounts Officer, DEA, New Delhi will send an advice to the RBI, Central Accounts Section, Nagpur, for obtaining necessary reimbursement from the foreign Government. The Pay and Accounts Officer, DEA will clear the debit lying under the head '8679 - Accounts with Governments of Other Countries', on receipt of advice of reimbursement from the RBI, CAS, Nagpur.
In order to mitigate the hardship of the Burma Civilian pensioners/ family pensioners, the Government of India have sanctioned ad-hoc ex-gratia allowance and relief on pension as admissible to Central Govt. pensioners with effect from 1.6.87. The A.G. under whose jurisdiction the pensioner was receiving pension will sanction the ex-gratia allowance. The extra liability on this account will be debited by the State AG in State Section of his account under the head ‘8658 Suspense Accounts’ and settled with the Pay and Accounts Officer, CPAO, in terms of Article 5.17 of Account Code for AG.
7.15.3 Singapore/Sri Lanka Pensioners: In case of the Singapore and Sri Lanka Pensioners, sanctions and Pension Payment Orders with name of the pensioner, his full postal address, PPO number, amount of basic pension and any other relief on pension, etc. (both in foreign currency as well as in Indian currency with rate of exchange applicable) will be communicated by the foreign Governments to the Pay and Accounts Officer, DEA. A copy will be sent to the AG or Pay and Accounts Officer (where the accounts have been departmentalized), as the case may be, of the State/Union Territory in whose jurisdiction the pensioner is residing and intends to draw pension.
On receipt of sanction/PPO as above, the Pay and Accounts Officer, DEA will issue necessary Special Seal Authority to the AG or the Pay and Accounts Officer concerned, as the case may be, with a copy to the Foreign Government as well as to the pensioners. After making payment, the Treasury Officer will send the pension vouchers to the AG with his monthly cash account. The AG will debit the expenditure in State Section of his accounts under the head ‘8658 Suspense Accounts - PAO Suspense’ and claim reimbursement from the Pay and Accounts Officer, DEA. Similarly, the Pay and Accounts Officer of the Union Territory (where the accounts have been departmentalized) will claim reimbursement after debiting the expenditure to the above suspense head by sending a reimbursement claim to the Pay and Accounts Officer, Department of Economic Affairs. On receipt of such claims from the AG or the Pay and Accounts Officer, as the case may be the Pay and Accounts Officer, DEA will reimburse the claim as above by debiting a transitory head ‘8679 Accounts with Governments of Other Countries’ and prefer a claim duly supported by the paid vouchers, against the foreign Government concerned. The foreign Government on receipt of such claims will make reimbursement by demand draft in favour of the Pay and Accounts Officer, Economic Affairs after exercising necessary checks. The head ‘8679 Accounts with Governments of other Countries is cleared when the credit on account of the demand draft appears in the bank scroll.
In fresh cases arising in future, the Pay and Accounts Officer, Department of Economic Affairs will arrange to make payment of such pensions directly by crossed cheque or bank draft on receipt of a pre-receipted bill.
7.15.4 Pakistan Civil Pensioners/Family Pensioners: In the case of Pakistan (including Bangladesh) Civil Pensioners/Family Pensioners, the following two types of payments are made on behalf of Pakistan/Bangladesh:
(i) Provisional pension under Indo-Pak Provisional Payment Scheme: Pensions under Indo-Pakistan Provisional Pension Payment Scheme are sanctioned by the officer in charge ‘Central Claims Organisation under the Rehabilitation Division of Ministry of Home Affairs (previously Ministry/Department of Rehabilitation). Based on such sanctions,
the Pay and Accounts Officer (Pension & Misc.) will authorize the State AG concerned to make payment after due verification of the identity of the person. After making payment by debiting the Suspense head 8658 Suspense Accounts - PAO Suspense, etc, the AG will prefer an outward claim duly supported by the paid vouchers to the Pay and Accounts Officer (Pension & Misc.). Pay and Accounts Officer (Pension & Misc.) will reimburse the claim by debit to the Suspense head ‘8679- Accounts with Governments of other Countries - payment on behalf of Pakistan/transactions on behalf of Bangladesh and eventually raise a debit against the foreign government. The above suspense head would be cleared on receipt of reimbursement from the foreign government concerned.
(ii) Provisional pension under the Ad-hoc payment scheme of Department of Rehabilitation: This provision is for Government pensioners and the pensioners of former princely states and local bodies who migrated to India from West Pakistan after 31st Nov. 1960 but before 1st April 1967. In such cases, the Government of India has sanctioned provisional payment of pension till an agreement is reached with Government of Pakistan for acceptance of the liability/ transfer of their pension to India.
The pension in these cases will be authorised by the Ad-hoc Committee in the Central Claims Organisation, to the Pay and Accounts Officer (Pension & Misc.). He will arrange payment through the AG of the State where the applicant desires payment. After making payment, the State AG will obtain reimbursement from PAO (Pension & Misc). The Pay and Accounts Officer (Pension & Misc.) debits the payments to the head " 8679- Accounts with Governments of Other Countries- Pakistan. At present there is no agreement with the Government of Pakistan for reimbursement of claims under the Ad-hoc payment scheme. Payment made in such cases will be centralised in the books of Pay and Accounts Officer (Pension & Misc.) till an agreement is reached.
There was no scheme of Family Pension at the time of the partition of the Country. The families of retired employees who migrated to India after partition were not sanctioned any Family Pension in the event of death of the pensioners. Subsequently Government decided to divide such cases into two categories:
i. Cases where name of the authority which had issued the PPO was known; and ii. Others, where no such details were available.
The procedure for finalizing the cases of above categories will be as follows:
(i) If the AG’s office had issued the Pension Payment Order, the AG concerned may issue authority to sanction ex-gratia family pension on the basis of the following documents:-
a. Succession certificate from a Court, or b. Affidavit shown before a Magistrate, or c. Affidavit of the claimant on a plain paper supported by any two documents which may be acceptable to the Head of the Department/Pension Sanctioning Authority.
(ii) In other cases where no details are available, it will be the responsibility of the Settlement Commissioner, Rehabilitation Division, to process the cases for payment of ex-gratia family pension. On the basis of the sanctions received from the Settlement Commissioner, the PPO will be issued by the PAO (Pension and Misc.), Ministry of Home Affairs, New Delhi.
The extra liability on this account will be debited by the AG to major head 8658 Suspense Accounts - PAO Suspense, and settled with the Pay and Accounts Officer, CPAO.
For fresh cases arising in future, the Pay and Accounts Officer (Pension &Misc.) will arrange payment of such pensions by crossed cheque/bank draft on receipt of pre-receipted bill from the beneficiary. The first payment in such cases will be made after proper verification on the basis of descriptive roll received from the Officer in charge (Claims) along with the sanction letter.
7.15.5 ICS Family Pension Fund (Transferred): Government of United Kingdom communicates the basic pension and graded relief admissible to such Family Pensioners. Based on such communications, the payment of family pension will be arranged by the Pay and Accounts Officer, Department of Economic Affairs, New Delhi. The total expenditure involved is initially booked under 8679-Accounts with Governments of other Countries. After close of the financial year, reimbursement of the expenditure so incurred against ICS Family Pension Fund (Transferred) will be claimed from Govt. of U.K. through a Proforma Account. The Proforma Account has in it the details of name of pensioner and payments made. No vouchers are required to be sent in support of the claim. On receipt of the Proforma Account from the Pay and Accounts Officer, Department of Economic Affairs, the Govt. of U.K. will reimburse the claim by means of a demand draft. The above Suspense head is cleared by minus debit when the credit on account of the said demand draft appears in bank scrolls.
7.15.6 ICS Family Pension Fund (Un-transferred): In this case the Ministry of Home Affairs issues the sanctions. Based on such sanctions, payment will be made by the Pay and Accounts Officer, Dept. of Economic Affairs. In respect of this category of Family Pension, the Govt. of U.K. pays only basic pension. The relief/graded relief on pension in these cases are still lying under the Suspense head awaiting a decision in this regard.
7.15.7 ICS Family Pension (Non-European Members): In these cases the Ministry of Home Affairs issues necessary sanction. The payment of Family Pension will be made by the Pay and Accounts Officer, Dept. of Economic Affairs by debiting the major head ‘2071- Pensions and other Retirement Benefits, 01 – Civil- 200 -Other Pensions - Pensions under the ICS (NEM) Family Pension Fund’. In all these categories of ICS Family Pension Funds, payments will be made quarterly in advance i.e. for the quarters ending March, June, September and December. Necessary sanction giving therein the amount of pension admissible for the quarter in question will be sent to the widow of the pensioner, and on receipt of duly pre-receipted bill from the family pensioner, payment will be made by means of demand draft.