What changed
The commission structure moved from a percentage of transaction value to a flat fee per transaction. Receipts now earn Rs.45, non-pension payments Rs.50, and pension payments Rs.60 per transaction. The change applies to transactions from July 1, 2005, with a review planned by end-March 2006.
What it means for you
Banks will now earn a fixed amount per government transaction, which could increase revenue for high-volume, low-value transactions but may reduce earnings for large-value ones. Accurate record-keeping of daily branch scrolls is critical, as error scrolls are ineligible. Quality of service, especially for pensioners, will be monitored closely.
What you must do
- Update internal systems to track and claim commission on a per-transaction basis from July 1, 2005.
- Maintain detailed records of daily branch scrolls for verification by RBI or authorized agencies.
- Ensure error scrolls are excluded from commission claims and continue to comply with statutory tax liability requirements.
- Prepare for a review of rates by end-March 2006 and monitor service quality, particularly for pension payments.
Who it affects
State Bank of India and its associates, All nationalised banks, HDFC Bank Ltd., ICICI Bank Ltd., UTI Bank Ltd., IDBI Ltd., Jammu & Kashmir Bank Ltd.
What is the effective date for the new agency commission rates?
The new per-transaction rates apply to transactions from July 1, 2005 onwards, with the transaction date based on cheque/draft realization or cash deposit.
How will the number of transactions be calculated for commission?
The daily branch scroll submitted to Government Accounting authorities will be used to count transactions. Transactions reported in 'Error scrolls' are not eligible for commission.
Will there be any changes to PPF transaction commissions?
A separate review for Public Provident Fund (PPF) transactions is underway in consultation with the Government of India, with a detailed communication to follow.