Home › Circulars › RBI/2008-09/463

Revised Penal Interest Rules for Delayed Govt Revenue Remittances

Current · Source: Reserve Bank of India · RBI/2008-09/463 · issued 28 Apr 2009 · ~2 min read
Quick answerRBI has revised penal interest recovery on delayed government revenue remittances by PSBs, including extending put-through date benefits to banks that already paid, easing outstation timelines under EASIEST, waiving petty claims under Rs 500, and exempting OLTAS teething period from penalties.
The rule, in the simplest words
How it plays out — a real example

Ravi, the treasury head at a nationalised bank, reviews a pending penal interest claim of Rs 450 for a delayed government tax remittance in Feb 2008. He instructs his team to ignore it under the new Rs 500 threshold, saving administrative effort. He also adjusts a Rs 2,000 overpayment from 2006 against a current penalty notice.

What changed

The Controller General of Accounts extended the put-through date exclusion benefit to banks that had already paid penal interest for May 2005-Dec 2006, allowing adjustment against future claims. Outstation transaction remittance time under EASIEST increased from T+3 to T+5 working days. Petty penal interest claims of Rs 500 or below are ignored from Jan 1, 2008. Penal interest waived for six quarters (Apr 2005-Sep 2006) due to OLTAS teething issues.

What it means for you

Banks that overpaid penal interest during the specified period can now adjust excess amounts against future claims, reducing immediate cash outflow. The extended EASIEST timeline gives more operational flexibility for outstation transactions, lowering penalty risk. Waiving petty claims and OLTAS period penalties reduces administrative burden and past liabilities for PSBs.

What you must do

Who it affects

Public Sector Banks, State Bank of India and its Associates, Nationalised Banks, Jammu & Kashmir Bank Ltd., Branches handling government revenue remittances

❓ Common questions

What is the put-through date benefit for banks that already paid penal interest?

Banks that paid penal interest between May 2005 and Dec 2006 can now have the put-through date excluded from the delay calculation, and the excess payment will be adjusted against future penal interest claims.

What is the new remittance timeline for outstation transactions under EASIEST?

The permissible period is T+5 working days, excluding the put-through date, for outstation transactions. This does not apply to e-payments, which have separate instructions.

Are deposit schemes like PPF covered by these instructions?

No, these instructions do not apply to remittances under deposit schemes such as PPF or SCSS of the Ministry of Finance.

📜 Read the original circular — full text as issued by RBI
Notifications - Reserve Bank of India Skip to main content Selected Selected Change Language हिंदी Search the Website Search Home About Us ▼ About Us Organisation & Functions ▶ Organisation Structure Departments Offices Training Establishment ▶ College of Agricultural Banking Reserve Bank Staff College College of Supervisors RBI's Functions and Working Governors Deputy Governors Executive Directors Communication Policy of RBI Sources of Information ▶ Annual Publications Half-yearly Publications Quarterly Publications Monthly Publications Weekly Publications Occasional Publications SDDS NSDP Data Releases Publications available on Subscription General Information RBI History Museum ▶ The RBI Museum RBI Monetary Museum Notification ▼ Notifications Master Directions Master Circulars Amendment Directions Draft Notifications/Guidelines ▶ Draft Notifications/Guidelines Draft Directions (RE-wise) Index To RBI Circulars Standalone Circulars Circulars Withdrawn Press Releases Speeches & Media Interactions ▼ Speeches Media Interactions Memorial Lectures Podcasts Publications ▼ Biennial Annual Half-Yearly Quarterly Bi-monthly Monthly Weekly Occasional Reports Working Papers Legal Framework ▼ Act Rules Regulations Schemes Research ▼ External Research Schemes RBI Occasional Papers Working Papers RBI Bulletin History DRG Studies KLEMS State Statistics and Finances Statistics ▼ Data Releases Database on Indian Economy Public Debt Statistics Regulatory Reporting ▼ List of Returns Data Definition Validation rules/ Taxonomy List of RBI Reporting Portals FAQs of RBI Reporting Portals Home Notifications Notifications ( 49 kb ) Recovery of Interest from Public Sector Banks on delayed remittances of Government Receipts into Government Account RBI/2008-09/463 DGBA.GAD No. H-9284 /42.01.011/2008-09 April 28, 2009 The Chairman & Managing Director/ Managing Director State Bank of India and its Associates/ All Nationalised Banks/Jammu & Kashmir Bank Ltd. Dear Sir, Recovery of Interest from Public Sector Banks on delayed remittances of Government Receipts into Government Account Please refer to our circulars RBI/2006/150, dated October 10, 2006, RBI/2007/235 & 286 dated January 24, 2007 & March 13, 2007 regarding permissible time limit for remittance of Government Revenues. 2. The expeditious movement of all categories of Government revenues to its exchequer and other related issues have been reviewed by a Committee set up by Government of India. Based on the recommendations of the Committee the Government of India, Ministry of Finance, Department of Expenditure in continuation of the earlier instructions has revised the procedure relating to recovery of interest from Public Sector Banks on delayed remittances of Government Revenues into Government Account as detailed below: i) Applicability of exclusion of put through date for the transactions (relating to revenue receipts) affected during the period 1/5/2005 to 31/12/2006 for the cases in which penal interest has already been paid : As per the extant instructions, the 'Put Through Date' was excluded from the prescribed remittance norms for calculating delayed period interest for remittance of Government revenues and these instructions were made applicable in pending delayed period interest cases where the banks had not paid the interest. It has now been decided by Controller General of Accounts to extend the benefit of exclusion of the 'Put Through Date' from the time period calculated for remittance of Government receipts to those banks also which had paid the penal interest during the period from 1/05/2005 to 31/12/2006 on the instructions existing at the time they made the payments. The excess payment of penal interest paid by the banks will be adjusted against the subsequent claims of delayed period penal interest against them. ii) Permissible period for remittance of Govt. revenues into Govt. account for outstation transactions under Electronic Accounting System in Excise and Service Tax (EASIEST) : As per the extant procedure under EASIEST, the time limit for remittance of both local and outstation transactions was prescribed as T+ 3 working days. Having examined the requirements under EASIEST, it has now been decided that a maximum period of T+5 working days (excluding put through date) for outstation transactions will be allowed. This dispensation will not be applicable on e-payments (payment made through internet) for which separate instructions have been issued vide our circular No. RBI/2008/09/97 dated July 18, 2008. iii) Levy of petty amount of penal interest on delayed remittances of Government receipts : It has been decided that the petty claims of delayed period penal interest involving amount of Rs.500/- or below, will be ignored and excluded from the purview of penal interest w.e.f. January 1, 2008. iv) Waiver of penal interest due to teething problems experienced by dealing branches during the initial period of OLTAS: Considering the various problems which had arisen during the initial period of implementation of OLTAS before the system stabilized, it has been decided to exempt the six quarters (i.e. 1/04/2005 to 30/09/2006) from the purview of penal interest. 3. Further, we have been advised that these instructions will not be applicable to remittance of funds under the Deposit schemes viz. PPF/SCSS etc.of Ministry of Finance. 4. You may, therefore, arrange to remit the Government revenue accordingly. Yours faithfully, (G.C.Biswal) Deputy General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page More Links : Bank Holidays Banking Glossary Citizen's Charter Complaints Contact Us COVID-19 Measures E-LMS Events FAQs Financial Education Forms IFSC/MICR Codes Important Websites Opportunities @ RBI RBI Clarifications RBI Kehta Hai RBI’s Vision and Values (1257 kb)--> Right to Information Act Tenders Follow RBI RSS Twitter YouTube Instagram Facebook LinkedIn © Reserve Bank of India. 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Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/463 · issued 28 Apr 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Update internal systems to apply T+5 working days for outstation EASIEST transactions, excluding put-through date.
📜 Compliance
  • Identify banks that paid penal interest between May 2005 and Dec 2006 and adjust excess payments against future claims.
  • Stop processing penal interest claims of Rs 500 or below for government revenue delays from Jan 1, 2008.
  • Exempt penal interest for the six quarters from Apr 2005 to Sep 2006 under OLTAS implementation.
  • Ensure deposit schemes like PPF/SCSS are excluded from these revised 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 Compliance officer at a bank this circular applies to (Public Sector Banks, State Bank of India and its Associates, Nationalised Banks, Jammu & Kashmir Bank Ltd., Branches handling government revenue remittances), your first concrete step on “Revised Penal Interest Rules for Delayed Govt Revenue Remittances” is: “Identify banks that paid penal interest between May 2005 and Dec 2006 and adjust excess payments against future claims.” (RBI issued this 28 Apr 2009).

  1. Circular: RBI/2008-09/463 -- Revised Penal Interest Rules for Delayed Govt Revenue Remittances
  2. Issued: 28 Apr 2009
  3. Action required: Identify banks that paid penal interest between May 2005 and Dec 2006 and adjust excess payments against future claims.
  4. Action required: Update internal systems to apply T+5 working days for outstation EASIEST transactions, excluding put-through date.
  5. Action required: Stop processing penal interest claims of Rs 500 or below for government revenue delays from Jan 1, 2008.
  6. Action required: Exempt penal interest for the six quarters from Apr 2005 to Sep 2006 under OLTAS implementation.
  7. Action required: Ensure deposit schemes like PPF/SCSS are excluded from these revised instructions.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. 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=4973&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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