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BANKER TO GOVERNMENTS AND BANKS

Like individuals, businesses and banks, the Governments also need a banker to carry out their financial transactions in an efficient and effective manner. Managing Government banking transactions is a key function assigned to the Reserve Bank. On the other hand, banks need their own mechanism to transfer funds and settle inter-bank transactions such as borrowing from and lending to other banks and customer transactions. As the Banker to banks, the Reserve Bank fulfills this role.

(251 kb)
Date : Dec 15, 2021
Government Agency Business Arrangement – Appointment of Scheduled Private Sector Banks as Agency Banks of Reserve Bank of India (RBI)

RBI/2021-22/140
CO.DGBA.GBD.No.S1112/42-01-033/2021-2022

December 15, 2021

All Scheduled Payments Banks and Scheduled Small Finance Banks in India

Dear Sir / Madam

Government Agency Business Arrangement – Appointment of Scheduled Private Sector Banks as Agency Banks of Reserve Bank of India (RBI)

Please refer to RBI Circular RBI/2021-22/36; CO.DGBA.GBD.No.S77/42.01.033/2021-22 dated May 10, 2021 on the captioned subject.

2. It has now been decided in consultation with the Department of Financial Services, Ministry of Finance, Government of India, to make scheduled payments banks and scheduled small finance banks eligible to conduct Government agency business. Any payment bank or small finance bank that intends to undertake Government agency business may be appointed as an agent of RBI upon execution of an agreement with RBI, provided that the overarching regulatory framework prescribed for these banks is complied with.

3. All the instructions/conditions prescribed in our aforesaid Circular dated May 10, 2021 will henceforth be applicable to the scheduled payments banks and scheduled small finance banks also.

Yours faithfully

(R. Kamalakannan)
Chief General Manager
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