Private Sector Banks as Agency Banks of RBI can handle Govt. business

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Reserve Bank of India has said that all private sector banks will now be considered eligible to handle any Central or State Government at par with public sector banks.

Till now, only three private banks, namely ICICI Bank Ltd, HDFC Bank Ltd and Axis Bank Ltd were appointed by RBI as its agents to carry out limited general banking business.
In a notification issued from Mumbai on Tuesday, RBI said that this move would improve customer convenience by increasing the number of customer service outlets. It will also broadbase the revenue collection and payments mechanism of Central and State governments.
In this connection, all banks intending to handle Government business need to send a proposal to the Controller General of Accounts for examination.
For State Government business, the concerned Department of the State may work out the arrangement and approach the Finance Department of the State which will recommend the proposal to the Regional Director of RBI for the State. These revised guidelines have come into effect immediately.