Agency Commission and Pensioners Account Procedures

Questions and Answers

What is the primary agency responsible for handling commission claims related to Central government transactions?

CAS Nagpur (correct)

Regional Office of Federal Bank

Mumbai Regional Office

Ministry of Finance

Within how many days must agency banks submit their claims for agency commission after the end of the quarter?

30 calendar days

90 calendar days

60 calendar days (correct)

45 calendar days

What consequence can agency banks face for non-compliance with instructions issued by the Government or Reserve Bank?

Increased scrutiny of transactions

Imposition of penalty (correct)

Loss of banking license

Mandatory audits

At what rate is penal interest charged for any wrong agency commission claims settled?

Bank Rate plus 2% Signup and view all the answers

To which office should claims for GST receipt and direct tax collection under TIN 2.0 regime be submitted?

Mumbai Regional Office Signup and view all the answers

What purpose does the system generated acknowledgement serve in the CBS?

It acknowledges receipt as well as updates records in real time. Signup and view all the answers

What is the primary objective of the Single Window System for reimbursement of pension payments?

To eliminate delays by holding banks accountable for settlements without RBI intervention. Signup and view all the answers

What is the recommended action for agency banks regarding pension payment grievances?

Appoint nodal officers for regular monitoring of grievance resolutions. Signup and view all the answers

What compensation is stipulated for pensioners in cases of delayed pension payments?

8 percent per annum, automatically credited on the same day as revisions. Signup and view all the answers

What is the role of the GM/CGM in relation to grievance resolution?

They should review grievance resolution positions at monthly intervals. Signup and view all the answers

Which committee's recommendations should agency banks adhere to for pension payment practices?

The Prabhakar Rao Committee. Signup and view all the answers

What is the most significant complaint by pensioners mentioned in relation to payment delays?

Inordinate delays in disbursing revised pension and arrears. Signup and view all the answers

How should pension payments after delays be processed by banks?

They must automatically credit the compensation when revising payments. Signup and view all the answers

What mechanism are pension paying banks required to implement regarding pension orders?

Obtain copies of pension orders from pension paying authorities immediately. Signup and view all the answers

What should be published to assist pensioners with pension calculations?

Detailed arithmetic and other information about pension calculations on a website. Signup and view all the answers

What is required for banks to claim agency commission for pension payments?

A certificate from the ED/CGM confirming no pension arrears exist. Signup and view all the answers

What aspect of customer service should be prioritized by agencies disbursing pensions?

Providing considerate and sympathetic service to elder pensioners. Signup and view all the answers

Under which section of the RBI Act, 1934 is the Reserve Bank of India allowed to carry out general banking business for governments?

Section 45 Signup and view all the answers

What is the primary role of agency banks in the context of government transactions?

To act as intermediaries for government banking transactions. Signup and view all the answers

Which of the following is NOT a requirement for pension paying banks regarding pension payments?

Conduct regular audits of pension payments made to elderly individuals. Signup and view all the answers

What should banks ensure about their agency commission claims?

Claims must be certified by an ED/CGM with no pension arrears. Signup and view all the answers

What is required when a thumb or toe impression is obtained from an old or sick pensioner?

Two independent witnesses, one a responsible bank official Signup and view all the answers

In cases where a pensioner cannot provide a thumb impression, what alternative is permitted?

A mark on the cheque or withdrawal form identified by witnesses Signup and view all the answers

What should agency banks do regarding the reimbursement of pension payments?

Submit claims to the Reserve Bank of India or Central Accounts Section in Nagpur Signup and view all the answers

What action should banks take concerning a family pension after the death of a pensioner?

Allow continuation of the existing joint account without alteration Signup and view all the answers

What has been mandated for agency banks regarding the issuance of life certificates?

Duly signed acknowledgements must be issued Signup and view all the answers

In the process of withdrawing pension amounts on behalf of a pensioner, what is essential for the person withdrawing the money?

Signature provision to the bank by the appointed person Signup and view all the answers

What is necessary for a cheque or withdrawal form if a pensioner cannot be physically present at the bank?

Witness identification of the pensioner’s mark Signup and view all the answers

When a spouse opts for the existing joint account after a pensioner’s death, what should the bank refrain from insisting?

Opening a new account for the spouse Signup and view all the answers

What is the agency commission rate when transactions are managed entirely by a bank?

Full rate Signup and view all the answers

If two banks share the work for a transaction, what is the proportion of agency commission shared?

75:25 Signup and view all the answers

When the dealing branch forwards documents to the Reserve Bank or another agency bank, how much commission does it receive?

75% of the applicable rate Signup and view all the answers

What does the agency branch do if it receives scrolls from other banks?

Account for the transactions and dispatch documents Signup and view all the answers

What happens to agency commission if a bank only partially handles the transaction?

It is shared based on responsibilities Signup and view all the answers

Which of the following scenarios would NOT qualify for full rate agency commission?

The dealing branch forwards documents to the Reserve Bank. Signup and view all the answers

In cases where there are multiple banks involved in a transaction, what is the role of the agency bank?

To account for the transaction and dispatch documents Signup and view all the answers

If the agency branch is responsible for dispatching documents, what proportion of agency commission is applicable?

75% of the applicable rate Signup and view all the answers

Which of the following situations does NOT require agency banks to submit claims for agency commission to the Mumbai Regional Office of Reserve Bank of India?

Claims for Central government transactions Signup and view all the answers

What is the maximum allowable time frame for agency banks to submit claims after the end of a quarter?

60 calendar days Signup and view all the answers

What penalty is imposed on agency banks for submitting wrong claims of agency commission?

Bank Rate plus 2% Signup and view all the answers

In which scenario can an agency bank submit claims after the stipulated period without facing penalties?

If the bank provides valid reasons for the delay Signup and view all the answers

What governing agreement results in penalties for agency banks due to non-compliance with specific instructions?

Agreement between agency banks and the Reserve Bank of India Signup and view all the answers

Which of the following transactions is NOT eligible for agency commission?

Short term borrowings from financial institutions Signup and view all the answers

What must an agency bank NOT do to be eligible for agency commission when collecting stamp duty?

Collect charges from the public Signup and view all the answers

In which situation would an agency bank be ineligible for agency commission despite collecting stamp duty?

If it is acting as a Franking Vendor Signup and view all the answers

What determines the rates of agency commission for Small Savings Schemes transactions?

Government of India regulations Signup and view all the answers

Which condition makes an agency bank eligible for commission when collecting stamp duty as a standard payment?

The agency bank does not collect charges from the public Signup and view all the answers

When an agency bank collects stamp duty for the purchase of franking bars, what must the bank do to qualify for agency commission?

Ensure payments are credited to the Treasury Signup and view all the answers

What is one action that can lead to an agency bank losing eligibility for agency commission on stamp duty collection?

Collecting fees from the public Signup and view all the answers

Which of the following statements regarding agency commission for agency banks is accurate?

The Reserve Bank pays agency banks a separate remuneration for public debt management. Signup and view all the answers

What is required for a thumb or toe impression taken from an old or sick pensioner to be valid?

It should be identified by two independent witnesses known to the bank. Signup and view all the answers

What approach should banks take if a pensioner cannot sign or physically attend the bank?

Obtain a mark on the withdrawal form, identified by independent witnesses. Signup and view all the answers

Which statement is true regarding the continuation of a survivor pension account after the pensioner's death?

The joint account can continue without opening a new one if authorized. Signup and view all the answers

What documentation must agency banks provide when obtaining a life certificate from a pensioner?

A duly signed acknowledgement from the bank. Signup and view all the answers

What role do independent witnesses play in the process of pension withdrawals for incapacitated pensioners?

They confirm the identity of the person withdrawing funds. Signup and view all the answers

Which of the following is NOT a requirement when pensioners authorize a person to withdraw their pension?

The authorized person must show a power of attorney. Signup and view all the answers

What is the necessary action for banks submitting reimbursement claims for pension payments?

Claims should be directed to the Reserve Bank of India or Government Banking Division. Signup and view all the answers

In what scenario can an existing joint account be maintained without changes after a pensioner's death?

When the surviving spouse opts to continue using the joint account. Signup and view all the answers

What constitutes a single transaction for the purpose of claiming agency commission under GST?

Records clubbed under a single challan processed successfully Signup and view all the answers

When are agency banks eligible to claim agency commission for pension transactions?

Only if the pension calculations are also done by them Signup and view all the answers

What is the maximum number of transactions eligible for the payment of agency commission per pensioner each year?

14 transactions including monthly and arrear payments Signup and view all the answers

How should transactions related to arrears from late start/restart of pension be categorized?

As a single credit transaction for claiming agency commission Signup and view all the answers

What commission rate applies for transactions categorized as 'other than pension payment'?

6.5 paise per ₹100 turnover Signup and view all the answers

Which statement about the processing of agency commission claims under the new GST rules is correct?

Transactions must be submitted with unique identifiers for each claim Signup and view all the answers

What is the requirement for agency banks in relation to the work done on pension disbursement to qualify for higher commission?

All calculations and disbursement tasks must be completed by them Signup and view all the answers

Which of the following best describes the impact of using a Common Portal Identification Number (CPIN) in the GST payment process?

It permits agencies to combine various payment types into a single transaction Signup and view all the answers

What is the intended outcome of implementing the Single Window System for pension reimbursement?

To ensure timely settlement of reimbursement claims Signup and view all the answers

In the event of delayed pension payments, how is the compensation applied to the pensioner's account?

It is credited automatically on the same day as the delayed payment Signup and view all the answers

What is the recommended protocol for banks to handle grievances from pensioners?

To ensure there is a consistent forum for interaction and resolution Signup and view all the answers

According to policies, how should banks approach the issuance of life certificates?

They are advised to record life certificates in their CBS and provide acknowledgements Signup and view all the answers

What is the fixed interest rate that banks must compensate pensioners for delayed payments?

8 percent per annum Signup and view all the answers

What is the role of the GM/CGM in grievance resolution for pensioners?

To monitor the resolution of grievances monthly Signup and view all the answers

Which of the following is a consequence for not adhering to the recommended grievance handling procedures?

Potential penalties for the agency banks Signup and view all the answers

What was the primary complaint from pensioners addressed by the agency banks?

Delays in disbursing revised pensions and arrears Signup and view all the answers

Study Notes

Claiming Agency Commission

Agency banks must submit claims for agency commission in the prescribed format to CAS Nagpur for Central government transactions and to the Regional Office of RBI for State government transactions.
Claims related to GST receipt and direct tax collection under TIN 2.0 must be settled exclusively at Mumbai Regional Office.
Claims should be submitted within 60 calendar days after the quarter in which transactions occurred; delays require reasons for late submission.
Non-compliance with guidelines could result in penalties, including penal interest of Bank Rate plus 2% for incorrect claims.

Old/Sick/Incipient Pensioners Account Procedure

Thumb or toe impressions of pensioners must be verified by two independent witnesses, including a responsible bank official.
If the pensioner cannot provide an impression, a mark on the cheque must be identified by two witnesses.
Designated individuals can withdraw on behalf of the pensioner, with their signatures required and corroborated by witnesses.

Reimbursement of Pension Payments

Agency banks should send reimbursement claims to RBI for Central and State Government pension payments.

Continuation of Survivor Pension Accounts

In instances where a spouse opts for a joint account for family pension post the pensioner's death, banks should not require the establishment of a new account.

Life Certificate Acknowledgment

Agency banks are required to issue signed acknowledgments upon receipt of life certificates, with the option to enter details in CBS for real-time updating.

Single Window System for Reimbursement

A Single Window System was implemented for efficient reimbursement claims settlement, making each pension bank responsible for direct settlements without RBI intervention.

Customer Service Improvements

Banks should follow Prabhakar Rao Committee recommendations and establish a forum for addressing pensioners' grievances regularly.
Nodal officers should be appointed to monitor grievance resolution, with reviews conducted monthly.

Delay Compensation for Pension Payments

Pension paying banks must compensate for delays in pension payments at a fixed interest rate of 8% per annum, credited automatically to the pensioner’s account.
Banks should gather pension order copies directly, ensuring timely payments to pensioners without waiting for RBI instructions.

Transparency in Pension Calculation

Banks must provide pension calculation details periodically on their website or branches, ensuring adequate advertisement of these resources.

Agency Commission Rate Structure

Agency commission is payable at full rate when banks handle transactions entirely, or at 75% when work is shared.
The commission rates depend on the degree of involvement in completing transactions, with full rates applicable under comprehensive management.

Key Regulatory Framework

The Reserve Bank of India manages government banking through its offices and appointed agency banks per Section 45 of the RBI Act, 1934.
Agency banks receive commission for services rendered in government transactions, with detailed guidelines for eligibility and payment structure.

Agency Commission Claims

Agency banks must submit claims for agency commission to CAS Nagpur for Central government transactions and respective RBI Regional Offices for State transactions.
Claims related to GST receipts and direct tax collection under TIN 2.0 must be submitted only to the Mumbai Regional Office of the Reserve Bank of India.
Claims must be submitted within 60 calendar days following the end of the relevant quarter; late submissions require explanations.

Penalties and Misclaims

Non-compliance with governmental or RBI instructions can lead to penalties for agency banks.
Wrong claims for agency commission may incur penal interest calculated at Bank Rate plus 2%.

Procedures for Pensioners

Thumb/toe impressions from incapacitated pensioners must be witnessed by two known independent witnesses, including a bank official.
If a pensioner cannot provide physical impressions, marks on cheque forms must also be verified by two witnesses.
The identified individual for pension withdrawal should be validated by independent witnesses, with signature records maintained by the bank.

Reimbursement for Pension Payments

Link branches of agency banks can submit reimbursement claims for pension payments to the appropriate RBI offices.

Continuation of Pension Accounts

Spouses as survivor pensioners may continue to use existing joint accounts for family pension without needing to open new accounts, as long as they hold prior authorization in the Pension Payment Order.

Life Certificate Acknowledgements

Agency banks are required to issue signed acknowledgements for life certificates.
Acknowledgements should be recorded in CBS systems to facilitate real-time updates.

Single Window System for Reimbursement

This system simplifies the settlement process for reimbursement claims and ensures accountability by making each pension-paying bank responsible for its transactions.

Customer Service Protocols

Recommendations from the Prabhakar Rao Committee must be followed to enhance customer service related to pension payments.
Appointment of nodal officers for grievance resolution is required, with monthly reviews by senior management.

Compensation for Delayed Payments

Pensioners must be compensated for delays in pension or arrears at a fixed interest rate of 8% per annum for any delays post due date, credited automatically without requiring claims.

Eligible Transactions for Agency Commission

Agency commissions are applicable for revenue receipts/payments, pension payments, and any specific tasks designated by the Reserve Bank.
For Small Savings Schemes, commission amounts are set by the Government of India, not eligible for general agency commission rates.

Stamp Duty Collection Guidelines

Agencies collecting stamp duty must not charge the public or receive government payment for these services to be eligible for agency commission.
Unique regulations apply if engaged as a Franking Vendor, which may impact commission eligibility.

GST Transaction Considerations

CGST, SGST, IGST, and Cess payments through a single challan are treated as a single transaction for agency commission claims since July 1, 2017.

Pension Transaction Limits

Agency banks are eligible for ₹75 per transaction for pensions only when handling all aspects of disbursement.
If pension calculations are managed by government departments, transactions revert to a lower commission rate of 6.5 paise per ₹100 turnover effective July 1, 2019.
Maximum of 14 transactions per pensioner annually for agency commission claims is permitted, including one monthly net pension credit and up to two for arrears.

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Description

This quiz covers the procedures for claiming agency commission for Central and State government transactions, as well as the verification process for old, sick, or incipient pensioners' accounts. It addresses guidelines, submission deadlines, and penalties for non-compliance, ensuring a comprehensive understanding of these essential banking practices.