October 27, 2025

Here comes sweet relief for retired bankers! The Kerala High Court has issued an interim order that could reduce the GST burden on group health insurance policies for bank retirees. Around 2 lakh retired bankers have taken these group policies, managed by the Indian Banks’ Association (IBA) and National Insurance Co. Until now, the GST Council did not exempt GST on such group health insurance plans, making it costly for senior citizens. But on October 17, Justice Ziyad Rahman said, "...there shall be an interim order, directing the respondents to renew the policies of the petitioners for the current year without insisting on GST. However, it is clarified that this shall be subject to further orders to be passed by this Court." This means banks like Bank of Baroda, Canara Bank, Indian Overseas Bank, and others must renew health insurance for retired staff without charging GST—at least for now. Indian Overseas Bank has already told its branches to collect the premium for 2025-26 without GST, but other banks are still silent. The All India Bank Pensioners & Retirees Confederation has asked the IBA to advise all banks to follow this order quickly. They said, "The entire premium is paid by us senior citizens and not by banks and hence these should be given the same GST treatment as individual policies." Experts call this a big win for senior citizens. Raghavan Ramabadran from Lakshikumaran & Sridharan Attorneys called it "a significant and welcome relief" and praised the Court for supporting affordable insurance. Narendra Bharindwal, President of Insurance Brokers Association of India, said giving this GST break to retired bankers fits the spirit of fair treatment and social equity. Yet, some say the government, not courts, should decide on GST policy. One insurance company MD suggested retirees ask banks to pay the GST as a thank you for their service. With court dates coming up on October 31, everyone watches eagerly to see if this relief will stick and spread across India. If it does, retired bankers could breathe easier and save money on their health cover. What a spicy twist in the tale of banking retirees’ insurance!

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Tags: Gst, Group health insurance, Retired bankers, Kerala high court, Indian banks' association, Senior citizens,