TestCloud
Prep • Practice • Perform
Log In

RBI Raises Agency Commission for Banks Handling Government Transactions.

Banking & Finance | Dated: 18 Jun 2025

The Reserve Bank of India (RBI) has issued a revised Master Circular (RBI/2025-26/06) effective April 1, 2025, under Section 45 of the RBI Act, 1934, to enhance agency commission rates for banks acting as intermediaries in processing government transactions.

🎯 Key Highlights:

  • - This circular consolidates instructions issued up to March 31, 2025, and restates the RBI’s mandate to remunerate agency banks for handling essential tasks such as revenue collections, government payments, pension disbursements, and Small Savings Scheme (SSS) operations—including Public Provident Fund (PPF), Sukanya Samriddhi, and Kisan Vikas Patra, with commissions for SSS borne by the Government of India.
  • - Under the new circular, the updated commission rates are as follows: ₹40 per physical receipt, ₹12 per electronic receipt, and a substantial ₹80 per pension payment. Additionally, banks will now receive 7 paise per ₹100 of turnover for all other eligible payment transactions, with the exception of pre-funded schemes or transactions where compensation is provided by Government agencies.
  • - The circular clearly outlines categories of ineligible transactions—such as bank guarantees, dealings with statutory/autonomous bodies, capital payments, Gold Monetisation Scheme transactions, and loans or withdrawals from financial institutions—which will not qualify for agency commission.

💡 Other Important Facts:

  • (i) To claim their commissions, agency banks must upload transaction reports daily via QPX/e-Kuber before 6 PM and submit quarterly claims to the Central Accounts Section (CAS), Nagpur, or respective regional RBI offices. Banks are also required to certify that none of the claimed transactions are ineligible.
  • (ii) Failure to adhere to correct claim procedures may result in penal interest imposed at the Bank Rate plus 2%.
  • (iii) Overall, by increasing agency commission rates and formalizing clear eligibility criteria, enhanced reporting protocols, and penalty provisions, the RBI aims to strengthen the procedural efficiency, transparency, and fair remuneration for banks conducting critical government business—especially in rural and semi-urban regions.

📚 Test Your Knowledge:

Recently, which organization revised the agency commission structure for banks handling government transactions, effective April 1, 2025?

Correct Answer: RBI

🚀 Quick Recap:

About RBI

  • Governor : Sanjay Malhotra
  • Headquarter : Mumbai