Revenue Collection Explained

How collection works

Fees and commissions on government collections

Last checked 24 October 2026 · 6 sources

Short answer

Governments pay banks for collecting revenue in two main ways: an interest-free float, where the bank holds the money for a few days, or a fee per transaction. An August 2011 IMF note calls float not transparent and names a fee per transaction as good practice 1. India publishes its rates. From 1 April 2025, the Reserve Bank of India pays agency banks ₹40 per physical receipt and ₹12 per e-mode receipt 2. Payer-side charges depend on the channel and country.
IMF good practice
Fee per transaction 1
Float in most Latin American countries
About 2 to 4 days, per the 2011 note 1
India, physical receipt
₹40 from 1 April 2025, was ₹50 from 1 July 2012 2,3
India, e-mode receipt
₹12 from 1 April 2025, same as from 1 July 2012 2,3
India, pension payment
₹80 from 1 April 2025, was ₹65 2,3

Float or fee

The IMF note says some countries pay banks through an interest-free float, which it calls not transparent. It names a fee per transaction as good practice 1. In many developing countries, it says, banks are still paid with interest-free days before deposit at the central bank. It puts this at about 2 to 4 days in most Latin American countries 1.

The 2010 IMF paper says banks that get a float invest the free money, which distorts the treasury single account 4. It describes the fee model as "a fee-for-service, based on the number of transactions that have been processed" 4. It reported that revenue banks in Colombia could keep collections for 15 days before remitting them 4.

The 2011 note says banks in some Asian countries competed for government business by offering negative fees 1.

India's published agency commission

The 2025 rates are in RBI circular RBI/2025-26/57 of 16 June 2025 2. The 2014 master circular says stamp duty collection earns commission only if the bank charges the public nothing and gets no payment from the state for it 3. Wrong claims carry penal interest at the Bank Rate plus 2 percent 3.

ItemRate from 1 July 2012Rate from 1 April 2025
Government receipt, physical mode 3₹50 per transaction 3₹40 per transaction 2
Government receipt, e-mode 3₹12 per transaction 3₹12 per transaction 2
Pension payment 3₹65 per transaction 3₹80 per transaction 2
Payments other than pension 35.5 paise per ₹100 of turnover 37 paise per ₹100 of turnover 2

Costs for the payer

A 2020 GSMA industry report says Cambodia's transport ministry shows the fee for each service, including the payment fee, on its platform 5. It says the cost of a passport payment in Pakistan fell from about US$2 to US$2.50 before digitisation to about US$1 after 5.

The same report lists sector-specific taxes on mobile services among the barriers that raise consumer costs 5.

Fees in aggregator contracts

Where a payment aggregator sits between the payer and the payee, India's 2025 Directions say the agreement with the merchant must be fair and must state settlement timelines transparently 6. Funds must sit in an escrow account, and interest is not paid on it except on a defined core portion 6.

Common questions

Do governments pay banks to collect taxes?

Yes. The IMF says most countries use commercial banks for collection on a remuneration basis 1.

What is float in government collection?

Days during which a bank holds collected revenue interest-free before passing it on, as the IMF note describes it 1.

How much does India pay banks per government receipt?

₹40 per physical receipt and ₹12 per e-mode receipt from 1 April 2025 2.

Why does the IMF prefer per-transaction fees?

It calls float not transparent, and its 2010 paper says banks invest the float, which distorts the TSA 1,4.

Rules and charges change. Check the official source linked on this page before you pay or travel. Spotted an error? Email [email protected].

Sources

  1. IMF Fiscal Affairs Department: Treasury Single Account, Technical Notes and Manuals 11/04, by Sailendra Pattanayak and Israel Fainboim (August 2011)
  2. Reserve Bank of India: Review of instructions issued vide Master Circular on Conduct of Government Business by Agency Banks, Payment of Agency Commission, RBI/2025-26/57 (16 June 2025)
  3. Reserve Bank of India: Master Circular on Conduct of Government Business by Agency Banks, Payment of Agency Commission, RBI/2014-15/109 (1 July 2014, updated 7 January 2015)
  4. IMF, Sailendra Pattanayak and Israel Fainboim: Treasury Single Account: Concept, Design, and Implementation Issues, Working Paper WP/10/143 (May 2010)
  5. GSMA, industry association report: Digitalising person-to-government payments, by Nicolas Fichers and Lamia Naji (October 2020)
  6. Reserve Bank of India: Reserve Bank of India (Regulation of Payment Aggregators) Directions, 2025, RBI/DPSS/2025-26/141 (15 September 2025)

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