Banking and monetary regulator, Reserve Bank of India is shocked at the increasing pension liability calculated by banks as per 2010 data. Calculations had been intially done based on 2007 data which showed the liability of only Rs 6000 crore.

The rise in liability in just three years has appalled the central bank. From 2007 to 2010, the pension liablity on banks has risen from Rs 6000 crore to Rs 20000 crore.

Banks have sought from both the apex bank as well as the Institute of Chartered Accountants of India (ICAI) that liability of more than 5 years should be amortized.

Approval for amortization was last given by RBI in the year 1993.

According to ICAI, amortization has to be allowed by the apex bank. In fact RBI should suggest and implement an accounting treatment following which ICAI can further instruct the auditors.