What changed
RBI issued a Master Circular on July 1, 2010, consolidating instructions on para-banking activities, including a requirement for banks to disclose commissions or remunerations received from bancassurance business in their balance sheets, as per paragraph 18 of the circular.
What it means for you
Banks must now separately report income from insurance referral or agency arrangements, increasing transparency for regulators and stakeholders. This affects how banks account for fee-based income and may require system changes to track such earnings accurately.
What you must do
- Update balance sheet disclosure formats to include bancassurance commissions as a separate line item.
- Ensure internal systems capture all commissions from insurance referrals and agency agreements.
- Train finance teams on the new disclosure requirements under para-banking guidelines.
- Review existing bancassurance contracts to confirm compliance with disclosure norms.
Who it affects
All scheduled commercial banks (excluding RRBs) engaged in bancassurance, Bank finance and compliance departments, Insurance partners of banks
When did this requirement become effective?
The requirement was consolidated in the Master Circular dated July 1, 2010, which incorporates instructions issued up to June 30, 2010.