KARACHI: The State Bank of Pakistan (SBP) on Monday issued a circular to banks following the government’s decision to replace life certificates with biometric verification of pensioners twice a year, with immediate effect.

“Pensioner will be req­u­ir­ed to undergo biometric verification from any bra­nch of a bank maintaining his or her pension account, every year in March and September,” said the SBP circular.

The new system has been adopted to curb ghost pensioners and reduce the inc­reasing burden on budget. The overall pension spending as a share of tax revenue has reached 18.7 per cent as of FY20, almost double the level a decade earlier.

Earlier, a pensioner had to produce a life certificate twice a year in the bank where he or she used to receive pension. The life certificates were endorsed by a gazetted officer.

A government official said the National Database and Registration Authority (Nadra) had acquired a sophisticated machine that could read the fingerprints of a person even after the age of 60 years, which the biometric system usually failed to do. Under the arrangements, pensioners would be sent to Nadra offices in case the biometric system failed to verify them.

The official said that even if the Nadra machine could not read the fingerprints due to overage, the life certificates such pensioners would be accepted.

“I feel better as I would not have to search for a higher government official to get a certificate that I am still alive,” said Saleem Ahmed, 69, a retired government officer.

The SBP circular said that in order to bring transparency and ease the pension payment process, the standard operating procedures (SOPs) had been amended with immediate effect.

“The government has eased up the pension payments and decided to directly pay in the accounts of pensioners. Pension shall be paid through a bank account either current or PLS (profit and loss account) maintained in the pensioner’s name.

“If the pensioner is unable to undergo biometric verification due to incapacitation by bodily illness, infirmity, or if his or her fingerprints do not exist due to old age or a genetic condition, he or she will provide a life certificate as per the SOPs,” said the circular.

It added that in case of family pension, non-marriage declaration will be obtained from a pensioner on or before 30th September of each year instead of March and September. “Submission of above-mentioned non-marriage declaration will be dispensed with after the widow, daughter or sister of the pensioner (family pension recipient) attains the age of sixty years,” said the circular.

If a pensioner fails to submit a life certificate or fails to undergo biometric verification during March and September or a pensioner does not draw a pension for consecutive six months, the account shall become dormant, it added.

The SBP said the requirement of submission of indemnity bond by a pensioner had been discontinued. “A pension account shall not be a joint account and a bank account dedicated to pension transactions only shall not be mandatory for the pension,” clarified by the Finance Division as per the SBP circular.

Published in Dawn, February 2nd, 2021