RBI's own words: “Please refer to our Master Circular No RBI/2011-12/95 dated July 1, 2011” — RBI/2012-13/81
Source: Reserve Bank of India · RBI/2011-12/95 · issued 01 Jul 2011 · ~2 min read
Quick answerRBI consolidated rules for agency banks on broker enrollment, delisting, and brokerage payments for Relief/Savings Bonds. Brokerage is Re 1 per Rs 100, no TDS, claims settled within 30 days, and banks are liable for sub-agent actions.
The rule, in the simplest words
Brokers must register with the bank and get a code number to use on all bond applications.
If a bank hires another bank as a sub-agent, the hiring bank is fully responsible for what the sub-agent does, and the sub-agent cannot say RBI appointed them.
Banks pay brokers Re 1 for every Rs 100 of bonds sold, but not if the broker buys the bonds themselves.
Banks do not cut any tax (TDS) from the brokerage they pay to brokers.
Banks must pay brokers within 30 days of the bond sale, and can then ask RBI to pay them back.
How it plays out — a real example
Rajesh, a branch manager at an agency bank, receives a broker's application for a client investing Rs 5 lakh in Savings Bonds. He verifies the broker's code, processes the application, and ensures the brokerage of Rs 5,000 is paid within 30 days via ECS, without deducting TDS. Later, he checks that the broker's publicity material does not mention RBI, as his bank is liable for any misuse.
What changed
This is a master circular consolidating existing instructions as of June 30, 2011, replacing the July 1, 2010 version. It reiterates that agency banks are solely responsible for sub-agents' activities and that RBI's name must not be used by such agents. Brokerage claims must be settled within 30 days, with reimbursement from RBI centralized at CAS Nagpur.
What it means for you
Agency banks must ensure strict oversight of any brokers or sub-agents they appoint, as they bear full responsibility for their actions. The fixed brokerage rate and no-TDS rule simplify payment processing, but timely settlement within 30 days is mandatory to avoid compliance issues. Centralized reimbursement at CAS Nagpur means banks should align their claims process accordingly.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Enroll brokers using a simple procedure, allot a unique broker code, and ensure brokers quote it on all applications.
Prohibit sub-agents from using RBI's name in publicity; monitor their activities as you are solely liable.
Pay brokerage at Re 1 per Rs 100 on eligible applications, and do not pay if the broker is the investor.
Settle brokerage claims within 30 days of subscription, preferably monthly via ECS, and then claim reimbursement from RBI.
Delist dormant brokers after 2 years of no business, with due notice.
Who it affects
Agency banks (SBI, associates, nationalized banks, Axis, ICICI, IDBI, HDFC, Stock Holding Corp), Brokers and sub-agents dealing in Relief/Savings Bonds, Investors in Relief/Savings Bonds
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the brokerage rate for Savings Bonds?
Brokerage is Re 1 per Rs 100 of investment, paid only to registered brokers on applications bearing their stamp. No brokerage if the broker is the investor.
Is TDS applicable on brokerage payments?
No, per Section 194(H) of the Income Tax Act, no TDS is to be deducted on brokerage for Savings Bonds business.
How quickly must brokerage claims be settled?
Agency banks must settle claims within 30 days from the date of subscription, and can seek reimbursement from RBI afterward.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/95 · issued 01 Jul 2011. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6554&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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