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.
What you must do
- 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
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.