Govt to slash agents' commission in small savings schemes

The government has decided to reduce agents' commission under various small savings schemes and Public Provident Fund to make these investor-centric, Finance Minister P Chidambaram on Thursday said.

"The government, after consulting all stakeholders and representations received, has decided to reduce the commission under PPF and SCSS (Senior Citizens Saving Scheme) to zero and under SAS (Standardised Agency System ) to 0.5 per cent," he said in Rajya Sabha during Question Hour.

The government's move followed recommendations of the Shyamala Gopinath Committee to reduce commission of 0.5 per cent on SCSS and one per cent on PPF to zero.

It had also recommended reduction in commission under Mahila Pradhan Kshetriya Bachat Yojana (MPKBY) to one per cent in a phased manner from 4 per cent and halve the commission for all other schemes under SAS to 0.5

per cent.

Chidambaram, however, said the commission under the MPKBY continued to be four per cent for the time being and the matter would be reviewed in "due course".

"The main intention of these recommendations is to make these schemes more investor-centric than agent-centric," he said.

The Committee observed that it is advisable to pass on the benefit of market alignment of rates to investors rather than burdening the structure with higher administrative costs, he said.

"To this effect, the decision is pro-investor and also keeps in mind the interest of agents where required," he added.