Based on the newly introduced concepts of 6th CPC, fresh instructions were issued by the Govt of India, Department of Personnel and Training vide Letter No 3/19/2009-Estt (Pay II) dated 05 April 2010 in which all modalities of pay fixation of re-employed ex-servicemen pensioners were explained. The said letter however was vague and ambiguous as far as the treatment of Military Service Pay (MSP) was concerned. As a result, civil organisations including banks, started deducting MSP from the pay fixed in the re-employed organisations, meaning thereby, that MSP was not being included in the protected pay in such organisations.
Accordingly on the issue being raised by ex-servicemen, a clarification was sought from the Ministry of Finance and a fresh letter was thereafter issued by the DoPT of even number dated 08 November 2010 in which the following was explicitly clarified by the Govt of India :-
“Hence in respect of all those defence officers/personnel, whose pension contains an element of MSP, that need not be deducted from the pay fixed on re-employment”
The above clarification, wherein it was provided that MSP would not be deducted from the pay fixed on re-employment, was endorsed by the Govt of India, Ministry of Finance, Department of Financial Services, to all Banks etc for compliance vide Letter No 4/1/2010-SCT(B) dated 22 Nov 2010.
However later, on receiving letters for clarification of the subject from The Indian Banks’ Association, the Department of Financial Services issued another letter No F No 4/1/2010-SCT(B) dated 23 March 2012 based on the earlier DoPT letter dated 08 Nov 2010 but in which it was surprisingly incorrectly stated in the last lines that MSP shall not be included in pay fixation, meaning thereby that MSP shall be deducted from the pay fixed on re-employment. This however was actually in contravention of the actual DoPT letter dated 08 Nov 2010 which in fact clearly states that MSP need not be deducted from pay fixed on re-employment. The following lines of the letter dated 23 March 2012 created chaos:-
“Therefore Ex-servicemen re-employed in the banks who retired on/or after 01.01.2006 are eligible to pay fixation in banks based on the pay drawn by them at the time of discharge from the Defence Services which would include band pay Plus grade pay but does not include MSP”
The said clarification dated 23 March 2012 signed by Mr LK Meena, Director of Financial Services, rather than clarifying the issue unnecessarily created confusion and banks thereafter started deducting MSP from the pay fixed on re-employment while the DoPT had stated just the opposite.
When I pointed out the anomaly to the Department of Financial Services, no action was taken by them and even RTI Applications were stonewalled.
However, it goes to the credit of Mr LK Meena, Director, Department of Financial Services, Ministry of Finance, Govt of India, that on my pointing out the fact that his staff had not briefed him correctly before getting the letter issued, he has promptly withdrawn the incorrect direction dated 23 March 2012 and has now directed all Banks and Insurance Companies to follow DoPT directions dated 08 Nov 2010 in letter and spirit. The letter withdrawing the earlier letter and containing the aforesaid directions has been issued on 28 Aug 2012. Mr Meena has also stated that his Public Information Officer had not replied to the RTI Application in a proper manner.
With this, the problem of not taking into account the Grade Pay and MSP of defence personnel on re-employment in Banking and Insurance institutions stands resolved.