In order to give the benefit of OBC reservations to children of lower level employees of PSUs and PSBs, the government on Wednesday expanded the ambit of ‘creamy layer’ to include certain posts in PSUs and public sector banks, thus barring these officials and their kin from claiming reservation benefits under the OBC category.

The Union Cabinet also approved excluding ‘socially advanced persons/sections’ from the purview of reservation under Other Backward Classes (OBCs) category. The decision comes almost 23 years after a 1993 office order of the Department of Personnel and Training (DoPT) provided for 27 per cent quota for OBCs in government vacancies and laid down criteria for defining ‘creamy layer’.

This order merely said the criterion enumerated for Group A and Group B posts would apply to officers “holding equivalent and comparable posts” in the PSUs, banks and financial institutions.

Briefing reporters about the decisions of the Union Cabinet, Finance Minister Arun Jaitley said an approval was accorded to the norms for establishing equivalence of posts.

In PSUs, all executive level posts — board-level executives and managerial-level posts — would be treated as equivalent to group ‘A’ posts in the government and will be considered ‘creamy layer’. Junior management grade scale 1 and above of public sector banks, financial institutions and public sector insurance corporations will be treated as equivalent to group ‘A’ in the government and considered as ‘creamy layer’.

For clerks and peons in PSBs, financial institutions and public sector insurance corporations, the income test as revised from time to time will be applicable.

“These are the broad guidelines and each individual bank, PSU, insurance company would place the matter before their respective board to identify individual posts,” an official statement said.

“This addresses an issue pending for nearly 24 years. This will ensure that the children of those serving in lower categories in PSUs and other institutions can get the benefit of OBC reservations, on par with the children of people serving in lower categories in government,” the statement said.

“This will also prevent children of those in senior positions in such institutions, who, owing to absence of equivalence of posts, may have been treated as non-creamy layer by virtue of wrong interpretation of income standards from cornering government posts reserved for OBCs and denying the genuine non-creamy layer candidates a level playing field,” it read.

The income limit defining ‘creamy layer’ for OBC reservation was last week raised to Rs 8 lakh per annum from Rs 6 lakh. Those earning more than Rs 8 lakh per year would be treated as ‘creamy layer’ and excluded from the benefits of OBC reservation.