SBI's govt business may take hit on fee norm change

The State Bank of India's government business may take a marginal hit in 2005-06, after the Reserve Bank of India changed the agency commission norm on government business payable to banks to volume of transaction from value of transaction, said S K Mishra, the bank's general manager and head of government business.

"It will not affect the bottomline of the bank as the assets and deposits are growing strongly," Mishra said on the sidelines of a seminar on e-payment of central excise and service tax.

The bank is yet to gauge the impact of the change in the agency commission regulation. "It is a new regulation and we are yet to study the impact," he added. The country's largest state-owned bank also is one of the major players in government business.

"We have always been dealing in volumes and will be able to make up the fall in commission (agency) by better techniques," Mishra said.

Government business handled by banks includes accepting tax payments, stamp duty and accepting payments in public provident fund, pension funds accounts.

The central bank of India fixed the rate on receipts at Rs 45 per transaction, Rs 50 per transaction for payments other than pension, and Rs 60 a transaction for pension payments.

Earlier, it was Rs 11.80 per Rs 100 of government transaction.