BBMP fails to remit Rs 35-cr premium of its staff

Amount pending for six months; LIC now charges interest

BBMP fails to remit Rs 35-cr premium of its staff

The Bruhat Bangalore Mahanagara Palike (BBMP) failed to remit to Life Insurance Corporation (LIC) of India the premium it deducted from the salaries of its 9,500-strong staff in the last past six months.

This amount could be as much as Rs 35 crore. Palike sources insisted that the civic agency had not remitted the money because of severe financial constraints.

Kacharakanahalli corporator Padmanabha Reddy, who has a copy of the letter the LIC sent to the BBMP Commissioner M Lakshminarayana about the pending balance, said: “In the letter, the civic agency has been told to pay the amount along with the interest. It is also mentioned that if the amount is not paid on time, then penalty will be slapped.” The letter was sent to the commissioner twice, on November 7 and 8, according to BBMP sources.

“The BBMP does not have any right to keep the premium as it belongs to the employees. Officials in the Palike’s finance department have shown laxity by not remitting the money to the LIC. Because of their negligence, the civic body will now have to pay the interest,” Reddy rued.

BBMP Officers’/Employees’ Association president P Dayanand said: “This problem has occurred because chief accountants have been misusing the premium. We submitted many memorandums to the chief accountant but to no avail.” At present, the BBMP employs about 9,500 people whose six-month premium is ₨ 30-35 crore. “This issue has already been brought to the notice of the BBMP commissioner,” Dayanand said.

When contacted, Lakshminarayana admitted that the premium had not been paid in the six months. “I will speak to the chief auditor and ensure that the balance is paid within three days. I have sought an explanation from the accountants for non-payment of the premium. I will see to it that this does not happen in future.” He, however, said he was unsure how much the premium is pending.

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