What changed
RBI revised the agency commission structure for government business handled by agency banks, effective July 1, 2012. Physical mode receipts commission increased from ₹45 to ₹50 per transaction, while e-mode receipts commission was slashed from ₹45 to ₹12 per transaction. Pension payments commission rose from ₹60 to ₹65 per transaction, and commission on other payments (non-pension) was reduced from 9 paise to 5.5 paise per ₹100 turnover.
What it means for you
Banks will earn more per physical receipt and pension payment but significantly less for e-mode receipts and other payments. This incentivizes digital transactions by lowering costs for e-mode receipts, aligning with the push for electronic government collections. Banks handling high volumes of non-pension payments or e-mode receipts may see reduced commission income, while those with more physical receipts or pension payments could benefit.
What you must do
- Update internal systems to apply the new commission rates from July 1, 2012.
- Train staff on the revised rates, especially the distinction between physical and e-mode receipts.
- Review transaction volumes to assess impact on agency commission income.
- Communicate changes to relevant branches handling government business.
Who it affects
All agency banks appointed under Section 45 of the RBI Act, 1934, Branches handling government receipts and payments, Treasury and operations teams managing government transactions
What qualifies as an e-mode receipt?
E-mode receipts include transactions where funds are remitted from the remitter's bank account via internet banking, or any transaction that does not involve physical receipt of cash or instruments.
When do the revised rates take effect?
The revised agency commission rates are effective from July 1, 2012, and will remain valid until the next review by RBI.
Why was the e-mode commission reduced so sharply?
RBI aimed to encourage digital transactions by lowering the cost for electronic receipts, reflecting lower processing costs and promoting efficiency in government collections.