Private Sector Banks as Agency Banks of Reserve Bank of India (RBI)
CURRENTLY all public sector banks are eligible to conduct Government business as agents of RBI. However, only three private sector banks viz. ICICI Bank Ltd., HDFC Bank Ltd. and Axis Bank Ltd. were appointed by RBI as its agents to carry out limited general banking business of the Central Government and of those State Governments, which had entered into an agreement with RBI for the purpose. Of late, RBI has been receiving formal/informal requests from various Central Government Ministries/Departments, State Governments and from the banks themselves for granting authorization for additional/fresh business to these/other private sector banks for conducting Government business.
With a view to enhancing the quality of customer service in Government business through more competition, improving customer convenience by increasing the number of customer service outlets and broad basing the revenue collection and payments mechanism of Governments, the existing policy was recently reviewed and it has been decided that all private sector banks will now be considered eligible to handle any Central/State Government business (where RBI pays agency commission) at par with public sector banks, subject to certain conditions and procedures.