February 23, 2006

The Chairman/Managing Director State Bank of India and Associate banks
and 17 Nationalised banks
The Managing Director
ICICI/IDBI/HDFC/UTI Bank Ltd.
Stock Holding Corporation of India Ltd.

Dear Sir,

The Department of Government and Bank Accounts, Central Office, RBI has been issuing instructions relating to brokerage rates for Relief / Savings bonds from time to time. In order to enable the Offices/Agency banks to have all the currently operative instructions on the above subject at one place, a Master Circular on brokerage rates, etc. for Relief / Savings Bonds has been prepared, which is enclosed.

2. Please acknowledge receipt

(Ref.CO.DT.13.01.201/432/2000-01 dt. 25-7-2000)

Brokerage at the rate of 0.50 (paise fifty only) per Rs.100/- will be paid to brokers registered/enrolled with RBI Offices, on applications tendered for investment in the bonds in the form of BLA at RBI Offices on behalf of their clients and bearing their stamp. NO BROKERAGE WILL BE PAID IN RESPECT OF STOCK CERTIFICATES

Brokerage at the rate of 1.00 (Rupee One only) per Rs.100/- will be paid to brokers registered/enrolled with Agency banks on applications tendered for investment in the bonds in the form of BLA at designated branches on behalf of their clients and bearing their stamp.

NO BROKERAGE IS PAYABLE IN CASE THE BROKER IS ONE OF THE INVESTOR/APPLICANT (Ref.CO.DT./13.01.298/H-2411/03-04 dated 29-10-2003

NO TDS on payment of brokerage:- Offices/agency banks may please note that no tax is required to be deducted at source while making payment of brokerage in respect of the Savings Bonds business canvassed by brokers in terms of Section 194(H) of the Income Tax Act, 1961

(Ref.CO.DT.201/5900/2000-01 dt. 28-5-2001

& CO.DT.13.01.298/H-3660/03-04 dt.3-1-04 )

Offices/Agency Banks are advised to settle the brokerage claims expeditiously in any case not later than 30 days from the date of subscription. (Ref.CO.DT.13.01.201/6260/2000-01 dt.13-6-2001)

Agency Banks are advised to first settle the brokerage claims and thereafter the reimbursement be sought from the Reserve Bank of India. (Ref.CO.DT./13.01.201/4668/2000-01 dt.8-3-2001

As a measure towards improvement in customer service, offices/agency banks may arrange to pay the brokerage to the agents, on a monthly basis by credit to their accounts through ECS after obtaining requisite mandate from them.

(Ref.CO.DT.13.01.298/H-4677/2002-03 dt. 23-5-2003)

Reimbursement of brokerage claims in respect of Savings Bonds have been centralized at CAS Nagpur with effect from 1-7-2002 and it has been decided that 90% of the brokerage due to agencies on the basis of funds remitted/reported to CAS as at the close of business of the month will be paid on the 3^rd working day of the succeeding month.

The balance of 10% is to be settled in due course on submission of Appendix IV (Ref.CO.DT.13.01.272/11032/2001-02 dt.25-6-2002

& CO.DT.13.01.272/H-2906/2002-03 dt. 26-2-2003)

In case, detailed clarifications are required on specific issues, the circulars/indicated above may please be referred to.