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RBI Cracks Down on Duplicate CIN in e-Payment Transactions

Current · Source: Reserve Bank of India · RBI/2008-09/173 · issued 17 Sep 2008 · ~2 min read
Quick answerRBI has reiterated that branches designated for e-payment must not accept physical challans and must upload data with 'I' in cgt_flg field to prevent duplicate CINs, following non-compliance reported by the Income Tax Department.
The rule, in the simplest words
How it plays out — a real example

Rahul, a branch operations officer in Indore, ensures that all e-payment transactions are processed separately from physical challans, uploading 'I' in field 36 (cgt_flg) to avoid duplicate CINs. By following RBI's instructions, Rahul helps prevent operational issues with tax authorities and regulatory scrutiny, maintaining the bank's reputation for compliance.

What changed

RBI has reinforced existing instructions that e-payment designated branches must exclusively handle e-payments and not accept physical challans. The directive emphasizes uploading challan data with 'I' in field 36 (cgt_flg) to distinguish e-payment transactions. This follows reports from the Income Tax Department of banks uploading both e-payment and physical challans from the same branch, causing duplicate CINs.

What it means for you

Banks must ensure strict segregation of e-payment and physical challan processing at designated branches to avoid duplicate CINs. Non-compliance could lead to operational issues with tax authorities and regulatory scrutiny. This reinforces the need for robust software validations and branch-level compliance with RBI's government business guidelines.

What you must do

Who it affects

State Bank of India and its associates, All nationalised banks, Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd, J&K Bank Ltd, Branches designated for e-payment collection

❓ Common questions

What is the cgt_flg field and why is it important?

The cgt_flg field (field 36) is used to tag e-payment transactions with value 'I' to distinguish them from physical challan payments. This prevents duplicate CINs and ensures accurate reporting to the Income Tax Department.

What happens if a designated e-payment branch also accepts physical challans?

This contravenes RBI instructions and can lead to duplicate CINs, as reported by the Income Tax Department. Banks must ensure strict compliance to avoid regulatory action.

Which banks are specifically addressed in this circular?

The circular is addressed to State Bank of India and its associates, all nationalised banks, Axis Bank, HDFC Bank, ICICI Bank, and J&K Bank.

📜 Read the original circular — full text as issued by RBI
RBI/2008-09/173 DGBA.GAD. No. H.2528/ 42.01.038 /2008-09 September 17, 2008  The Chairman & Managing Director/Managing Director State Bank of India and its Associates/ All Nationalised banks/ Axis Bank Ltd/ HDFC Bank Ltd/ ICICI Bank Ltd/ J&K Bank Ltd. Dear Sir, Updation of cgt_flg as 'I' in case of e-payment transactions As you are aware, as per extant instructions, only one branch which is allotted an exclusive BSR code is the designated branch authorized for collection of e-payment and that branch shall not accept any physical challans. Such designated branch is required to upload challan data with value ' I ' in field 36 (cgt_flg) to distinguish e-payment transactions from others. In this connection, we invite your attention to para 7.3 of letter F. No. SW /07 /01 /03 /04 /DIT(S)-11 /16657 dated December 5, 2007 from DIT(Systems) regarding software validations to be introduced in the software of all the branches of respective banks conducting Government business. 2. However, it has been brought to our notice by Income Tax Department that contravening the specific instructions on the subject, many banks have uploaded both e-payment as well as physical challans from same branch resulting in the issue of duplicate Challan Identification Number (CIN). 3. We, therefore, reiterate that all the branches designated for e-payment should not accept physical challans and that the designated branch should upload only e-payment challan data which contain value 'I' in the field 36 (cgt_flg). 4. Necessary instructions may be issued to your branches concerned for prompt compliance. Yours faithfully,  ( P. M. Rajagopal ) Assistant General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/173 · issued 17 Sep 2008. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Ensure designated e-payment branches do not accept physical challans under any circumstances.
  • Issue clear internal directives to all branches handling government business to comply with this circular.
  • Review branch-level processes to prevent mixing of e-payment and physical challan uploads.
📜 Compliance
  • Verify that e-payment challan data uploaded includes 'I' in field 36 (cgt_flg) as per RBI instructions.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Branch Manager at a bank this circular applies to (State Bank of India and its associates, All nationalised banks, Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd, J&K Bank Ltd, Branches designated for e-payment collection), your first concrete step on “RBI Cracks Down on Duplicate CIN in e-Payment Transactions” is: “Ensure designated e-payment branches do not accept physical challans under any circumstances.” (RBI issued this 17 Sep 2008).

  1. Circular: RBI/2008-09/173 -- RBI Cracks Down on Duplicate CIN in e-Payment Transactions
  2. Issued: 17 Sep 2008
  3. Action required: Ensure designated e-payment branches do not accept physical challans under any circumstances.
  4. Action required: Verify that e-payment challan data uploaded includes 'I' in field 36 (cgt_flg) as per RBI instructions.
  5. Action required: Issue clear internal directives to all branches handling government business to comply with this circular.
  6. Action required: Review branch-level processes to prevent mixing of e-payment and physical challan uploads.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4482&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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