RBI lists activities ineligible for agency commission payment

MUMBAI: Furnishing of bank guarantees or security deposits through private banks by government contractors are not eligible for payment of agency commission.

In a directive to all agency banks, RBI today enlisted activities that do not come under the purview of agency bank business and therefore not eligible for payment of agency commission.

It said "furnishing of bank guarantees/security deposits through private sector banks by government contractors/ suppliers, which constitute banking transactions undertaken by banks for their customers," will not be eligible for agency commission.

Among others, banking business of autonomous or statutory bodies, payments of capital nature like capital contributions, subsidies, grants made by governments to cover losses incurred by autonomous or statutory bodies also come under this category.

Also, pre-funded schemes which may be implemented by a central government ministry or department and a state government department through any bank without reference to RBI also fall under such activities that does not count for agency commission, RBI added.