Indian Railways and SBI sign MoU to enhance railway salary package with Rs 1 cr insurance cover

The Indian Railways (IR), in collaboration with the State Bank of India (SBI), signed a Memorandum of Understanding (MoU) on Monday, September 1, to introduce an enhanced Railway Salary Package (RSP) for railway employees. The agreement aims to provide significant financial security and welfare benefits, including a Rs 1 crore accidental death insurance cover, strengthening protection for railway personnel.

The MoU was signed in the presence of Union Minister for Railways, Information & Broadcasting, Electronics & Information Technology, Ashwini Vaishnaw, Railway Board Chairman Satish Kumar, and SBI Chairman C.S. Setty. According to a statement issued by the Ministry of Railways and reported by PTI, the agreement will improve insurance coverage for railway employees holding salary accounts with SBI.

Significant jump in insurance coverage

Railway employees are currently covered under the Central Government Employees Group Insurance Scheme (CGEGIS), which provides accidental death insurance of:

Rs 1.20 lakh for Group A employees

Rs 60,000 for Group B employees

Rs 30,000 for Group C employees

Under the new agreement, accidental death coverage has been significantly enhanced to Rs 1 crore across all groups. Additionally, railway personnel are now eligible for free natural death coverage of Rs 10 lakh, with no premiums or medical tests required.

Additional Insurance Benefits

The RSP brings several complementary insurance benefits to railway employees, including:

Air accident insurance (death): Rs 1.60 crore, with an additional coverage of up to Rs 1 crore on RuPay debit cards

Personal accident (permanent total disablement): Rs 1 crore

Personal accident (permanent partial disability): up to Rs 80 lakh

These enhancements aim to provide a robust financial safety net for employees and their families in case of unforeseen events, reflecting a constructive partnership between Indian Railways and SBI.

Focus on Employee Welfare

According to the Ministry of Railways, almost 7 lakh railway employees have their salary accounts with SBI. The ministry described the MoU as “employee-centric and compassionate,” highlighting its focus on frontline personnel, particularly Group C staff, who form the backbone of railway operations.

The partnership not only strengthens employee welfare but also ensures that benefits are accessible without additional financial or procedural burden. Employees will automatically receive coverage without the need for premium payments or medical examinations, making it a seamless and meaningful initiative.

Railway officials emphasised that the enhanced RSP represents a step toward building a more secure and supportive working environment for all staff. The agreement demonstrates the government’s commitment to prioritising employee safety, financial security, and well-being, particularly for frontline workers who operate under challenging conditions.

By collaborating with SBI, Indian Railways ensures that its employees receive comprehensive protection against accidental and natural death, as well as disability, thereby improving overall job security and employee satisfaction. The ministry noted that this initiative would provide employees and their families with peace of mind, knowing that they have access to substantial financial support in critical situations.