Banks Told to Route PPOs Only Through CPAO After Pensioner’s Death

CPAO flags violations, warns of strict action for non-compliance

In a clear reminder to authorised banks and pension-processing centres, the Central Pension Accounting Office (CPAO) has reiterated that Pension Payment Orders (PPOs) must be returned only through CPAO after the death of a pensioner or family pensioner—and not directly to PAOs or Departments.

The clarification has been issued through an Office Memorandum dated 24 December 2025, following observations that several banks were deviating from the prescribed procedure, leading to procedural lapses in pension administration CPAO_OFFICE_Order20251226.

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What the Rules Already Say

CPAO has drawn attention to Para 23 of the Scheme Booklet titled “Scheme for Payment of Pension to Central Government Civil Pensioners by the Authorised Banks”.

Under the existing guidelines:

• CPPCs (Centralised Pension Processing Centres) of authorised banks are required to
  • Return the disburser’s portion of the PPO
  • Along with the death certificate and other relevant documents
  • Only to CPAO, and not directly to PAOs
• All PPOs requiring return after the demise of a pensioner or family pensioner must be routed through CPAO exclusively.

This procedure ensures uniform record-keeping and proper closure of pension accounts at the central level.

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Deviation by Banks Noted by CPAO

Despite the clarity in rules, CPAO has observed that:

• Some CPPCs and bank branches are
  • Sending PPOs directly to concerned PAOs or Departments
  • After the death of pensioners or family pensioners

CPAO has categorically stated that this practice is in contravention of the prescribed procedure and cannot be continued.

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Fresh Directions Issued to Banks and CPPCs

In response to these deviations, CPAO has now formally directed:

• All authorised CPPCs and bank branches handling Central Civil Pension disbursement must
  • Strictly comply with the existing instructions
  • Ensure no PPO is returned directly to PAOs or Departments

Any deviation from the laid-down process will be viewed seriously, and suitable action will be initiated against the defaulting entities.

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