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Kolkata, June 26 State Bank of India and Calcutta Tea Traders Association have signed agreements with two tea brokers, namely, J Thomas & Company Pvt Ltd and Contemporary Brokers Pvt Ltd, paving the way for a permanent system of settlement banking for handling buyers’ and sellers’ prompts, brokerage, VAT, warehousing charges, service tax etc in respect of teas sold in the Kolkata auctions and privately by broker members under the CTTA Rules.

SBI will start participating in the settlement from Sale 26 due on June 29 and 30 and July 1, according to CTTA sources.

Kolkata’s main branch of SBI has been appointed by CTTA as the settlement banker.

The Tea Board has made it clear that the settlement bank account will not be used for any other commercial transaction by the broker.

No overdraft shall be allowed in the account. Also, the settlement banker shall have no right to exercise any set-off for any of its dues from the broker concerned from the deposits available in the account or any other account of the broker with the bank.

There will be a maximum of five scheduled commercial banks, which will operate as settlement banks. The five banks are State Bank of India, IndusInd Bank, Vijaya Bank, Bank of Baroda and Bank of India. Of these, IndusInd Bank has been functioning as a settlement banker on experimental basis from Sale 11 held in March and subsequently again in Sale nos. 22,23,24 and 25. Experimental basis because the account in the bank has been opened in the name of CTTA and not brokers. The three other banks are yet to develop the requisite systems, according to CTTA sources. Each broker has to open accounts at least with two of the five banks. The number brokers that participate in Kolkata auction is seven. Initially, the payments will be made partly in cheques and partly though online, i.e. RTGS and NEFT systems. Later, when the entire data base will be in place, there will be mainly online payments through RTGS and NEFT. However, for tea gardens and banks located in far off places and having no online facility, the payments may be made in pay order, it is learnt.

More Stories on : Public Sector Banks | Tea | State Bank of India | West Bengal

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