Agency commission payable to banks for operating Special Deposit Scheme

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It has been decided that henceforth agency commission claims on SDS related transactions (where mirror accounts are maintained in RBI) will be settled at Central Accounts Section (CAS), Nagpur, with immediate effect.

The claims are to be submitted on quarterly basis.

However, agency banks will continue to claim reimbursement of interest paid and withdrawal from SDS accounts from the respective Regional Offices of RBI in which the mirror accounts are maintained.

Based on RBI notification sated 15^th March 2018. For further clarity visit www.rbi.org.in .............. Poppy

Small Saving Schemes – Payment of Agency Commission

All Public Sector Banks, ICICI Bank Ltd., Axis Bank Ltd., and HDFC Bank Ltd., were authorised to receive subscriptions under National Saving Time Deposit Scheme, 1981, National Saving (Monthly Income Account) Scheme, 1987, National Saving Recurring Deposit Scheme, 1981 and National Saving Certificates (VIII Issue) Scheme, 1989 in addition to the existing small saving schemes.

It has been decided to pay agency commission to these banks for handling the work relating to the above four small saving schemes.

All the transactions may be directly reported to the Central Account Section, Reserve Bank of India, Nagpur on a daily basis.

The Agency banks are required to observe the rules and regulations of the respective scheme. Non-observance would attract penal action which shall be borne entirely by the bank.

Based on RBI circular dated 1^st Feb 2018. For any further clarification please refer www.rbi.org.in

Reporting of Transactions by agency banks to RBI

In case of Central Government transactions (electronic as well as in physical mode), if the transactions or any adjustments are reported after a gap of 90 days from the date of transaction, agency banks have to obtain prior approval from concerned ministry/department and submit the same to RBI separately at the time of reporting such transactions for settlement.

All instructions related to the timeline, for reporting of government transactions, remain unchanged.

Based on RBI notification dated 30/11/17. For any further clarification please refer www.rbi.org.in ................ Poppy

Settlement of Agency transactions

Currently, some Banks are routing their agency transactions of state governments through another agency bank ( Aggregator), which in turn settles these agency transactions with RBI for both receipts and payments. Both the banks share the eligible agency commission on such transactions.

It has now been decided that all agency banks should settle their transactions for both funds and commission directly with RBI instead of routing them through the aggregator.

Agency Transaction details/scrolls may be sent directly by individual agency bank to the concerned State Government/Treasury.

The new arrangement will be with effect from January 1, 2018.

Based on RBI notification Dated 7/12/17. For any further clarification in the matter refer www.rbi.org.in ............Poppy

Maintenance of SLR and holdings of SLR in HTM category

RBI has reduced the rate of SLR from 20 % to 19.5 % of Net Demand and Term Liabilities from 14/10/2017.

Currently, Banks are permitted to exceed the limit of 25 % of the total investments under HTM category, provided

·        the excess comprises of SLR securities and

·    total SLR securities held under HTM category are not more than 20.5 % of NDTL.

In order to align this ceiling with the mandatory SLR, RBI has decided to reduce the ceiling from 20.5 % to 20 % by 31/12/17 and to 19.5 % by 31/03/18.

Normally, Banks are allowed to shift investments to/from HTM category once a year at the beginning of the accounting year with the approval of the Board of Directors.

In addition to this, RBI has now allowed Banks to shift their excess SLR securities from the HTM category to AFS/HFT, and has also allowed direct sale from HTM category in order to comply with the current SLR requirement.

Such transfer or sale would be excluded from the 5 % cap prescribed for value of sales and transfers of securities to/from HTM category as per extant RBI guidelines.

Based on RBI notification dated 4/10/18. For any further clarification, please refer www.rbi.org.in