Payment of Agency Commission – Certification of Claims by External Auditors
The Reserve Bank of India (RBI) has issued a circular regarding the payment of agency commission to agents conducting business on behalf of banks.
The RBI has observed that some banks are not adhering to the guidelines on payment of agency commission, leading to irregularities and non-compliance.
Key Requirements:
Banks are required to ensure that agency commission is paid only after verifying the claims submitted by agents.
External auditors must certify the claims before payment, and banks must maintain a record of such certifications.
Banks are also required to have a robust system in place to monitor and control agency commission payments.
The RBI has emphasized the need for banks to comply with these guidelines to prevent irregularities and maintain transparency in agency commission payments.
Banks are advised to review their existing systems and procedures to ensure compliance with these requirements.
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