RBI allowed SFBs as Agency Bank to conduct Govt Business

The Reserve Bank of India (RBI) has thrown open the government agency business like tax collection to scheduled payment banks and scheduled small finance banks (SFBs). This is part of move to provide further scope to private banks to conduct government agency business.

In May this year, RBI has revised the existing guidelines on ‘Appointment of Scheduled Private Sector Banks as Agency Banks of RBI’ for authorizing Scheduled Private Sector Banks as agency banks of RBI for conducting govt business (Central and/or State).

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 and also in compliance with the regulatory framework prescribed for those banks.