RBI Directs Agency Banks to Comply with PPF Agent Commission Payment Rules
No longer current — replaced by Directions, 2026 (RBI [Conduct of Government Business by Agency Banks (ABs) – Payment of Agency Commission and
Source: Reserve Bank of India · RBI/2004-05/504 · issued 28 Jun 2005 · ~2 min read
Quick answerRBI has advised agency banks to ensure PPF agents receive commission at the time of deposit, without claim or undertaking, as per GOI instructions. Delays reported over six months are to be addressed; banks must review and set up a mechanism for timely payment, as RBI/SBI reimburses on transaction reporting.
What changed
RBI circular dated June 28, 2005 reiterates that PPF agent commission must be paid at deposit time, per GOI Office Memorandum dated May 20, 2004. Banks were found delaying payments for over six months, prompting RBI to advise immediate review and compliance.
What it means for you
Agency banks must now ensure PPF commission payments to agents are made at deposit time without delays or additional paperwork. Since RBI/SBI reimburses upon transaction reporting, delays are unacceptable and complaints will be viewed seriously.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Review current PPF commission payment processes at designated branches to ensure compliance with 'at source' payment at deposit time.
Eliminate any requirement for agents to submit claims or undertakings before receiving commission.
Set up a monitoring mechanism to prevent delays beyond the deposit date.
Report action taken and any complaints received from PPF agents to RBI immediately.
Who it affects
All 23 agency banks handling PPF accounts (as addressed by RBI), Designated bank branches processing PPF deposits, PPF agents and their commission payments
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 20:08 IST
Superseded by — Directions, 2026 (RBI [Conduct of Government Business by Agency Banks (ABs) – Payment of Agency Commission and
Status change: superseded10 Jul 2026, 04:02 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the 'at source' commission payment system for PPF agents?
It means the commission must be paid to the agent at the time the PPF deposit is made, without requiring any claim or undertaking from the agent. The bank gets reimbursed by RBI or SBI upon reporting the transaction.
What happens if a bank delays PPF commission payments?
RBI has stated that complaints from agents will be viewed seriously. Banks must review their processes and ensure no delays occur, as reimbursement is immediate from RBI/SBI upon transaction reporting.
Which banks are affected by this circular?
All 23 agency banks that handle government accounts and PPF transactions, as addressed by RBI's Government Accounts Department.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Superseded byDirections, 2026 (RBI [Conduct of Government Business by Agency Banks (ABs) – Pa
📜 Read the original circular — full text as issued by RBI
RBI/2004-05/504
No.CO.DT.15.02.001/H. 11162 - 11184 /2004-05
June 28, 2005
Aashadha 07 , 1927 (Saka)
The Chairman & Managing Director Government Accounts Department
Head Office (23 Agency Banks)
Dear Sir,
Introduction of System of 'At Source' commission
payments to PPF Agents with effect from June 1, 2004
A reference is invited to our circular dated
June 22, 2004 forwarding therewith a copy of office Memorandum No.18-5/99-NS-II
dated May 20, 2004 on the above subject.
2. We have been continuously receiving complaints
from the PPF Agents about non-payment of commission by designated Agency
bank branches as stipulated in GOI Office Memorandum dated 10.2.2004. It
is reported that the Agents are made to wait for more than 6 months to receive
PPF commission. Further Ministry of Finance (Budget Division) in para No. (v)
in Office Memorandum dated 20.5.2004 have, inter-alia reiterated that
the commission is payable to the agents at the time of deposit itself, under
clear receipt, without submission of any claim and/ or undertaking by the agent.
As the commission paid to the Agents are immediately reimbursed by Reserve Bank
of India/State Bank of India on reporting of the transaction, we advise that
the payment of commission to the Agents should not be delayed by the designated
branches.
3. We ,therefore, advise you to review the implementation
of the system by the designated branches and put in place a suitable mechanism
for payment of commission to Agents in letter and spirit of the instructions
contained in the Office Memoranda under reference. Please advise us the action
taken at your end immediately and complaints if any received from the PPF Agents
will be viewed seriously by us.
4. Please acknowledge the receipt.
Yours faithfully,
( B.B. Sangma )
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2004-05/504 · issued 28 Jun 2005. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2434&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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