References are being made to us regarding Gratuity under the 10th BP Settlement signed recently on 25-5-2015. Gratuity in the Banks is payable to employees and officers both under the Gratuity Act, 1972 as well as under the provisions of our Bipartite Settlement for employees and as per OSR for officers whichever is higher. (other than in SBI where Gratuity is paid only under the Act with a ceiling of Rs. 10 lacs).

Eligibility :

As per Bipartite Settlement	As per Gratuity Act
On retirement on superannuation	On retirement on superannuation
On resignation after 10 years’ service	On resignation after 5 years’ service
On termination of service	On disablement
On becoming incapacitated	On death of an employee
On the death of an employee

Eligible Amount:

As per Bipartite Settlement

As per Gratuity Act

One month Pay for each completed year of service (Max. 15 months) plus half month Pay for each year beyond 30 years’ service ( No maximum)

Pay means Basic pay, Spl. Pay, Offg. Pay, PQP, increment portion of FPP.

15 Days wage x No. of years of service ( Max. Rs. 10 lacs)

Wage means Basic Pay, Spl. Pay, Spl. Allowance, PQP, Offg. Pay, DA, Increment portion of FPP.

1 day = monthly wage/26 days

PAYMENT OF GRATUITY FROM 1.11.2012

1. In terms of Section 4 (5) of the Payment of Gratuity Act, 1972, Gratuity under Gratuity Act or BPS provisions whichever is higher is payable.

2. Hence for every retiring employee, Gratuity has to be calculated both under the Act and under BPS and higher of the two will be paid.

3. For those employees who have retired from November, 2012, Gratuity will be re-calculated both under the Act and as per 10^th BPS and arrears/difference if any will be paid to them.

Example:

a) A Special Assistant (Graduate and CAIIB) with 8 Stagnation Increments and retiring in July, 2015 after 40 years’ service

Eligibility as per the Act

Eligibility as per BPS

Paid/

Payable

Under 9^th BPS

58,342/ 26 x 15 x 40

= 13,46,353

Max. Rs. 10 lacs

28110 x 20 =

Rs. 5,62,000

10 lacs

Under 10^th BPS

62,758 / 26 x 15 x 40

= 14,48,260

Max Rs. 10 lacs

47270 x 20 =

Rs. 9,45,400

10 lacs

b) A Daftary with 8 Stagnation Increments and retiring in July, 2015 after 40 years’ service

	Eligibility as per the Act	Eligibility as per the BPS	Payable
Under 9^th BPS	30,930/ 26 x 15 x 40 = 713,770	14890 x 20 = 2,97,800	713,770
Under 10^th BPS	33,204 /26 x 15 x 40 = 766,250	25000 x 20 = 5,00,000	766,250
Difference of Rs. 52,480 will be paid

c) An Officer retiring in July, 2015 after 40 years’ service

( with Old Basic pay Rs. 25,700 and revised Basic pay Rs. 42,020)

Eligibility as per the Act

Eligibility as per BPS

Paid/Payable

54,150 / 26 x 15 x 40

= 12,49,615 Max. Rs. 10 lacs

25700 x 20 =

Rs 5,14,000

10 lacs

Revised

56,180 / 26 x 15 x 40

= 12,96,460Max Rs. 10 lacs

42020 x 20 =

Rs 8,40,400

10 lacs

d) An Officer retiring in July, 2015 after 40 years’ service

( with Old Basic pay Rs. 40400 and revised Basic pay Rs. 66070 )

Eligibility as per the Act

Eligibility as per BPS

Paid/Payable

85,123/ 26 x 15 x 40

= 19,64,377 Max. Rs. 10 lacs

40,400 x 20 =

Rs 8,08,000

10 lacs

Revised

88335 / 26 x 15 x 40

= 20,38,500 Max Rs. 10 lacs

85020 x 20 =

Rs 13,21,400

13,21,400

Difference of Rs. 3,21,400 will be paid

e) An Officer retiring in July, 2015 after 40 years’ service

( with Old Basic pay Rs. 52000 and revised Basic pay Rs. 85000 )

Eligibility as per the Act

Eligibility as per BPS