What changed
This is a master circular consolidating all existing instructions on broker appointment, delisting, and brokerage payment for Relief/Savings Bonds as of June 30, 2013. It replaces the previous master circular dated July 2, 2012. No new policy changes were introduced; it merely compiles current operative instructions.
What it means for you
Agency banks must follow a simple enrollment process for brokers and delist dormant ones after two years of inactivity. Brokerage is Re 1 per Rs 100 invested, with no TDS applicable. Banks must settle claims within 30 days and can use ECS for monthly payments. Sub-agents cannot use RBI's name in publicity.
What you must do
- Enroll brokers using a simple procedure and allot a unique code for brokerage claims.
- Delist brokers dormant for two years after due notice.
- Settle brokerage claims within 30 days of subscription and seek reimbursement from RBI afterward.
- Ensure sub-agents do not use RBI's name in any publicity material.
- Pay brokerage monthly via ECS if brokers provide a mandate.
Who it affects
State Bank of India and associates, All nationalized banks (excluding Punjab and Sind Bank & Andhra Bank), Axis Bank, ICICI Bank, HDFC Bank, Stock Holding Corporation of India Ltd. (SHCIL), Brokers and sub-agents handling Relief/Savings Bonds
What is the brokerage rate for Relief/Savings Bonds?
Brokerage is Re 1 per Rs 100 invested, payable only if the broker is not an investor. No brokerage is paid if the broker is also an applicant.
Is TDS applicable on brokerage payments?
No, agency banks are not required to deduct TDS on brokerage payments for Relief/Savings Bonds, as per Section 194(H) of the Income Tax Act.
How quickly must brokerage claims be settled?
Claims must be settled within 30 days from the date of subscription. Banks should pay first and then seek reimbursement from RBI.