What changed
The master circular consolidates previous instructions on agency commission, notably the shift from turnover-based to transaction-based commission effective July 1, 2005. It also establishes a single channel for PPF and SCSS commission payments through RBI, with Government of India discontinuing separate remuneration. For PPF, the effective date is July 1, 2005, and for SCSS, April 1, 2006; arrears up to March 31, 2007 must be claimed by June 10, 2007.
What it means for you
Banks must now track transactions individually for receipts and pension payments to claim commission, requiring robust record-keeping. The uniform approach for PPF and SCSS simplifies claims but demands adherence to prescribed formats. RBI will monitor service quality, especially for pensioners, potentially impacting compliance costs.
What you must do
- Maintain detailed records of each transaction for receipts and pension payments to support commission claims.
- Submit agency commission claims for PPF and SCSS using the prescribed formats (Annex I, II, III) as per the circular, with arrears due up to March 31, 2007 submitted by June 10, 2007.
- Ensure daily branch scrolls are accurate, as only these count for transaction numbers; error scrolls are ineligible.
- Provide a certificate confirming that transactions for the bank's own statutory tax liabilities are excluded from claims.
Who it affects
All agency banks handling government business, Banks managing PPF and Senior Citizen Savings Scheme transactions, Bank branches processing pension payments
What is the agency commission rate for pension payments?
Pension payments attract a commission of Rs.60 per transaction, effective from July 1, 2005.
How should banks claim commission for PPF and SCSS transactions?
Banks must submit claims using the formats in Annex I and II, with a summary in Annex III, only through RBI as the single channel.
Are transactions from error scrolls eligible for agency commission?
No, transactions reported in error scrolls are not eligible for agency commission.