Banking Arrangements

Prior to 1.4.86 SBI and one or more banks were authorised in each Commissionerate to collect Central Excise Revenue. This work was being done by more than 600 Focal Point Banks, 1500 Link branches and more than 5000 collecting branches in respect of 32 Central Excise Commissionerates.

The receiving branches were reporting the transactions to the Link branch of the bank at the same centre with relevant documents. The link branch consolidated all such transactions reported by receiving branches and forwarded the scroll to the Focal Point Bank. The Focal Point Bank used to send the scroll and challan etc. to the Pay and Accounts Officers and reported daily receipt to its main branch at New Delhi for settling with Reserve Bank of India.

The working of the old scheme created problems in the field of accounting, reconciliation, settlement, & prompt remittance of revenue to Government cash balances etc. as there had been undue delay in crediting CBEC revenue to Govt. Account. The delay in remittance was 13% for the years 1982 to 1985.

The entire system was reviewed by the "Working Group on Government Account" set up by Reserve Bank of India consisting of representatives of RBI, banks and senior officers of the Government. After deliberations the "Working Group" came to the conclusion that most of the maladies noticed in the old system were due to multiplicity of banks operating in each Commissionerate. It also observed that the State Bank of India had been burdened with very heavy load of Government Business and needed to be unloaded to the extent possible. The "Working Group" came to the conclusion that one public sector bank having a large net working of its branches in a particular Commissionerate could be selected for collection of Central Excise Revenues. The Government of India accepted the recommendations of the "Working Group" and thus the scheme of "One Bank-One Commissionerate" came into existence.

Under the scheme, the branches of the nominated bank for a Commissionerate render accounts through their Focal Point Branch at the Headquarters of the Commissionerate, which in turn settles the transaction with Reserve Bank of India directly through its link cell at Nagpur. Thus, there is only one focal point branch of the nominated bank for the entire Commissionerate. If the nominated Bank does not have a branch in a region of a particular range, then the bank can make sub-agency arrangements with any other PSB with the approval of Pr.CCA and RBI for the convenience of the assesses. For streamlining the grant of sub-agency arrangements, a committee was setup under the Chairman-ship of Additional Controller General of Accounts to prescribe norms and procedures. The present sub-agency system follows this committees recommendations. At present there are 52 Focal Point Branches and more than 5000 collecting branches.