Business correspondents’ body seeks incentives, tax waivers for agents

Our Bureau Mumbai | Updated on April 14, 2020 Published on April 14, 2020

The Business Correspondents Federation of India (BCFI) has written to the Finance Ministry, seeking incentives and tax relaxations that would help agents better service their customers amid the lockdown.

These include a hardship allowance of ₹5,000 per BC agent for six months as well as an incentive of 20 basis points per transaction to corporate BCs for processing AePS (Aadhaar-enabled payment system) and micro ATM transactions.

“Despite a lockdown being declared across the length and breadth of the country, BCs serve as the banking foot-soldiers and have taken up the challenge even at the risk of their own lives,” the BCFI has written in a letter to Financial Services Secretary Debasish Panda.

It has also suggested that the 27 per cent GST on fee for BC services be brought down to zero immediately and the reverse charge mechanism be removed for smooth working capital flow for BCs.

The BFCI further said that many BC agents are micro-entrepreneurs who earn a nominal income and have to pay a TDS of 5 per cent. Noting that the current pandemic will drastically reduce their income, it has recommended that the TDS be waived for the current fiscal.

“For cash digitisation services done, a heavy cash deposit charge is being charged by some banks from BC agents,” it said, requesting the government to advise all the banks to not levy this fee.

There are about five lakh active BC agents in the country, many of whom are continuing to work amid the lockdown to provide banking services across rural and semi urban parts of the country, it added.

Published on April 14, 2020

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