The Hindu Business Line : Govt transactions: Banks unhappy over revision in commission rates

THE revision in the agency commission rates on Government transactions has irked bankers. Banks feel that the rates should be based on the value of the transaction and not on number.

The Reserve Bank of India has in a recent circular notified the changes effected in the agency commission rates and asked banks to effect the change from July 1.

The agency banks have hitherto been receiving a commission of Rs 11.80 per Rs 100 of Government transactions (receipts and payments). The revised rate is not based on the value of the transaction, but on the number of transactions taking place.

For receipts, the agency bank would be paid Rs 45 per transaction, while payments (other than pension) would attract Rs 50 per transaction and pension payments, Rs 60 per transaction.

Bankers say that work (entries) involved in the case of a transfer should not be compared with cash dealings. "Immaterial of the amount of the bill, the number of entries remain the same. But this is not the same in cash dealings, where the amount will have to be sorted out, counted, checked and re-checked. It involves both time and manpower," a banker told Business Line. Bankers feel that the commission should be linked to the value and not the number of transactions. The regulator has, however, not made any distinction between draft, cheque and cash. In whatever form the sums have been received, the date of the instrument/cash, the circular states, should be treated as the date of the transaction.

A review of the rates is expected to be taken up by end-March.

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