What changed
RBI consolidated and updated instructions on agency commission payable to banks for handling government business, moving from turnover-based to transaction-based rates effective July 1, 2005. The circular also standardized commission for PPF and SCSS transactions, with RBI paying Rs.45 per receipt and 9 paise per Rs.100 turnover, replacing separate GoI payments.
What it means for you
Banks must now track transactions individually for receipts and pension payments to claim commission, while payments (non-pension) remain turnover-based. This shift rewards transaction volume but requires robust record-keeping and daily branch scroll reconciliation. RBI will monitor service quality, especially for pensioners, and may verify claims.
What you must do
- Maintain detailed records of all government receipt and pension payment transactions for commission claims.
- Submit claims for PPF and SCSS in prescribed formats (Annex I, II, III) with summary, ensuring arrears up to March 31, 2007 are submitted by June 10, 2007.
- Reconcile daily branch scrolls with transactions; exclude error scrolls and own statutory tax payments from claims.
- Provide a certificate confirming that no commission is claimed for bank's own tax liabilities.
- Prepare for RBI monitoring of service quality, particularly for pensioners, and potential verification of records.
Who it affects
All agency banks handling government business, Banks managing PPF and SCSS transactions, Bank branches processing government receipts and pension payments
What is the agency commission rate for pension payments?
Pension payments earn Rs.60 per transaction, effective from July 1, 2005.
How should banks claim commission for PPF and SCSS transactions?
Banks must use the formats in Annex I and II, with a summary in Annex III. Claims for arrears up to March 31, 2007 were due by June 10, 2007.
Are error scroll transactions eligible for agency commission?
No, transactions reported in error scrolls are not eligible for agency commission.