Master Circular on Conduct of Government Business by Agency Banks - Payment of Agency Commission

Last updated: 05 April 2021

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This Master Circular from the Reserve Bank of India (RBI) provides updated guidelines on the payment of agency commission to banks for conducting government business. It consolidates instructions issued up to March 31, 2021, covering eligible transactions like revenue receipts, payments, and pension disbursements. The circular also clarifies which government transactions are not eligible for commission and outlines the procedures for claiming commission, including reporting timelines and required certifications.

Reserve Bamk of India RBI/2021-22/07 DGBA.GBD.No. S-2/31.12.010/2021-22 April 1, 2021 All Agency Banks Dear Sir / Madam Master Circular on Conduct of Government Business by Agency Banks Payment of Agency Commission Please refer to ourMaster Circular RBI/2020-21/03; DGBA.GBD.No.2/31.12.010/2020-21 dated July 01, 2020on the above subject. We have now revised and updated the Master Circular which consolidates important instructions on the subject issued by the Reserve Bank of In

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FAQ :

The Master Circular consolidates and updates RBI's instructions on the payment of agency commission to banks for conducting government business, covering all directives issued up to March 31, 2021.

Eligible transactions include revenue receipts and payments on behalf of Central/State Governments, pension payments, and other work specifically advised by the RBI as eligible for agency commission.

Yes, for GST receipt transactions, agency commission claims must be submitted to the RBI's Mumbai Regional Office. A single challan for GST payments, even with multiple heads, is treated as one transaction for commission claims.

Submitting wrong claims can lead to penalties, including penal interest at the Bank Rate plus 2%, as per the agreement between agency banks and the RBI.

Agency banks are required to submit their claims within 60 calendar days from the end of the quarter in which the transactions were conducted. Delays require justification.

Yes, the circular details specific rates for different transactions, such as ₹40 per transaction for physical mode receipts, ₹9 for e-mode receipts, and ₹75 per transaction for pension payments. Other payments are calculated at 6.5 paise per ₹100 turnover.

Notification No : RBI/2021-22/07 DGBA.GBD.No. S-2/31.12.010/2021-22
Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12058&Mode=0

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