of outstation receipts for settlement of funds. in order to ensure expeditious credit to government account by the dealing branches, a deterrent measure has been put in place. accordingly, any delay in crediting the receipts to government account beyond the stipulated period ( of 15 days in case of delayed remittances over rs. 1 lakh and one month in other cases ) attracts penal interest. as compared to public sector banks, the newly inducted private banks are allowed merely 5 days for settlement. this is based on the distinction in regard to the degree of computerization of public sector banks vis - a - vis private banks. with the upgradation of payment systems in the country and electronic connectivity, the cut off limits needs to be made more stringent with the ultimate goal of achieving real time settlement in government account, with cas, nagpur. possible improvements by government submission of scrolls in electronic form at present, the scrolls are submitted in paper form separately for receipts and payments. with the computerization of bank branches and government departments, the scrolls in magnetic media ( floppy form ) should be acceptable to government departments. a switch over to submission of scrolls on magnetic media, will necessitate delinking of paid instruments and the payment scrolls. the reserve bank has introduced'electronic clearing service'( ecs ) for bulk receipts / payments which involve multiple credits with a single debit or vice - versa. ecs is customer friendly and remains untapped by government. government should use ecs for bulk and repetitive transactions like salary, pension, income tax refund orders etc. as recommended by the committee on technology upgradation in the banking sector, the government may examine the feasibility of introducing a variant of an electronic funds transfer system to facilitate collection of taxes, beginning with direct taxes. elimination of paper - based reporting system under the present system, it is a government requirement that all deposits in the government account should be accompanied by an appropriate challan. the challans are in multiple copies, different shapes and sizes. this requirement of the government has constrained the process of electronic banking in government business. over the years, despite the deliberations in various fora, it has not been possible to reduce the number of copies of challan. with the swift progress in banking, and the electronic connectivity as envisaged, it would become possible for the assessees to deposit the government dues in any designated bank by using a simple pay - in slip as in the case of bank

the non - banking treasuries / sub - treasuries, which handle the cash business itself, could be gradually converted into banking treasuries by transferring their cash business to banks. second, states may weigh the option of introducing separation of audit and accounts and departmentalization of accounts on the lines of centre gradually. third, as cheques for various reasons are preferable to bills, it is desirable to encourage wider use of cheques. the treasury is the primary accounting unit and its cash accounts are prepared and rendered to accountant general. fourth, in order to cut short delays, many treasuries, sub - treasuries and pay and accounts offices have made arrangements for disbursing small amounts in cash without the intervention of the bank, even when they are served by the public sector banks as agents. it may be advantageous to raise the monetary limit for payments across the counters, without requiring the payees to visit the banks. rationalising agency charges the agreements entered into by bank with the state governments provide that the bank shall not be entitled to any remuneration for the conduct of ordinary banking business of the government other than such advantage that may accrue to it from holding of cash balances free of obligation to pay interest thereof. the minimum balances by no means compensate the bank for the cost of conducting government business. on the contrary, the bank has been remunerating the agency banks for conducting the government business on its behalf at a rate related to the costs incurred by them for conducting government business. the rate is revised from time to time quinquennially after ascertaining the actual cost of conducting the government business and the present rate is 11. 80 paise per rs. 100 of government turnover. agency banks requested for a revision of the methodology of determining the rates and an expert committee was constituted to study their request. recently in its report, the expert group on revising the methodology for determining the cost of conducting government business, has observed that in most of the countries, the cost is borne by the respective governments and not the central bank. the cost of conducting government business has been rising in the recent years. a possible way of rationalising the agency charges from the present cost plus system could be to move over to a system of bidding for government business by agency banks. reducing lags in credit at present, banks have been allowed a transit time of 5 days in respect of local receipts and 9 days in respect