What changed
The Government of India, via notification dated November 25, 2011, discontinued commission payments on Public Provident Fund (PPF) and Senior Citizens Savings Scheme (SCSS) accounts. It also introduced new commission rates for agents under the Standardised Agency System (SAS) and Mahila Pradhan Kshetriya Bachat Yojana (MPKBY), effective December 1, 2011.
What it means for you
Banks operating PPF and SCSS schemes must stop paying agent commissions on these products from December 1, 2011. For other small savings instruments like time deposits and NSC, agents will earn 0.5% commission under SAS, while MPKBY agents get 4% on recurring deposits. Any incentives paid by state governments must be deducted from central government commission.
What you must do
- Inform all branches operating PPF and SCSS schemes about the discontinuation of agent commission effective December 1, 2011.
- Display the notification on branch notice boards for subscribers and agents.
- Update internal systems to reflect new commission rates for SAS and MPKBY agents.
- Ensure deduction of state/UT government incentives from central government commission payments.
Who it affects
Banks operating PPF and SCSS schemes, Agents under SAS and MPKBY, Subscribers of PPF and SCSS
When did the commission changes take effect?
The changes took effect from December 1, 2011, as per the Government notification.
What is the new commission rate for MPKBY agents?
MPKBY agents will receive 4% commission on Five-Year Recurring Deposit accounts.
Are state government incentives still payable?
State/UT government incentives, if any, must be reduced from the commission paid by the Central Government.