RBI/2004/305
DGBA.GAD.No.H-2625-2658/31.12.010(C)/2004-05
December 17, 2004
The Chairman & Managing Directors/
Managing Directors
All Agency Banks including Jammu & Kashmir Bank Ltd
(As per list)
Dear Sir,
Remuneration for Conduct of Government
business by Agency Banks - Payment of Turnover Commission (ToC)
As you are aware, Reserve Bank
acts as banker to the Central and State Governments in terms of Section 20,
21 and 21A of the Reserve Bank of India Act, 1934. The Bank has appointed your
bank as its agent for conduct of Government business. In terms of the agency
agreement, your bank is entitled for remuneration in the form of Turnover Commission
(ToC).
2. Of late, we have been receiving
references as to whether a particular transaction carried out on behalf of Central/State
Government Departments by agency banks is eligible for ToC or not. We clarify
that the following items of
Government business will only qualify
for payment of ToC: