Conduct of Government Business by Agency Banks - Payment of Agency Commission and Oversight of ABs Directions, 2026

RBI/DGBA/2026-27/400 CO.DGBA.GBD.No.S44/31.02.007/2026-27 April 30, 2026

Reserve Bank of India [Conduct of Government Business by Agency Banks (ABs) – Payment of Agency Commission and Oversight of ABs] Directions, 2026

Table of Contents

Chapter I: Preliminary A. Short Title and Commencement B. Applicability Chapter II: Agency Business Arrangement - Appointment of ABs Chapter III: Payment of Agency Commission for Conduct of Government Business by ABs A. Government transactions eligible for Agency Commission B. Government transactions not eligible for Agency Commission C. Transactions related to various Government Schemes D. Reporting of transactions by ABs to RBI E. Rates of Agency Commission F. Treating single challan as single transaction G. Procedure for claiming Agency Commission H. Documents required to be submitted by ABs for claiming Agency Commission I. Clarifications on claiming of Agency Commission J. Penal interest for wrong claims of Agency Commission Chapter IV: Oversight of Government Business in ABs Chapter V - Repeal and other provisions A. Repeal and saving B. Application of other laws not barred C. Interpretations Annex 1 Annex 2 Annex 2A Annex 2B Annex 3 Annex 4 Annex 5 Annex 6 Annex 7

In terms of Sections 20, 21 and 21A of the Reserve Bank of India Act, 1934, the Reserve Bank of India (hereinafter referred to as ‘RBI’ or ‘Reserve Bank’) acts as banker to the Central and State Governments. RBI carries out the general banking business of the Central and State Governments through its own offices and through the offices of the Agency Banks appointed under Section 45 of the Reserve Bank of India Act, 1934, by mutual Agreement, having regard to public interest and convenience of banking development. The Reserve Bank, in its role as banker to the Central Government and State Governments, hereby issues the following instructions/directions, to the Agency Banks, for the seamless conduct of Government business.

Chapter I: Preliminary

A. Short Title and Commencement

1. These Directions shall be called the RBI [Conduct of Government Business by Agency Banks (ABs) – Payment of Agency Commission and Oversight of ABs] Directions, 2026.

2. These Directions shall come into effect immediately upon its issuance, unless indicated otherwise.

B. Applicability

3. These Directions shall be applicable to ABs.

C. Definitions

4. In these Directions, unless the context states otherwise, the terms herein shall bear the meanings assigned to them as below:

(a) ‘ABs’ means all Public Sector Banks (PSBs), scheduled Private Sector Banks (PVBs), scheduled Payments Banks (PBs), and scheduled Small Finance Banks (SFBs) appointed by RBI under Section 45 of the RBI, Act, 1934, by mutual agreement, to carry out Government Banking business of Central Government (CG) / State Governments (SGs).

(b) ‘Agency Commission’ means the remuneration paid by the RBI to an AB in consideration of it acting as an agent of the RBI in conduct of general banking business of the CG and the SGs at the places and in the manner specified in the agreement entered between RBI and the bank, with the exception of the functions relating to the management of the public debt.

(c) ‘Prefunded scheme’ means an arrangement where funds are paid in advance by Government to the AB to cover future liability, obligation or settlement.

(d) ‘Scrolls’ means ‘payment scroll’ or ‘receipt scroll’:

(da) ‘Payment scroll’ means a physical or electronic statement submitted by an AB that lists the payments made and claimed from the Government account at the RBI for a Ministry or Department on a given date, used for accounting and reconciliation.

(db) ‘Receipt scroll’ means a physical or electronic statement submitted by an AB that lists the receipts collected and remitted to the Government account at the RBI for a Ministry or Department on a given date, used for accounting and reconciliation.

(e) ‘Luggage file’ means an electronic form of file in ‘eXtensible Markup Language (XML)’ format reported by banks to RBI containing details of the transactions.

5. All other expressions, unless defined herein, shall have the same meaning as have been assigned to them under the applicable Acts, Rules/ Regulations made thereunder, or any Statutory modification or re-enactment thereto, or Glossary of terms published by RBI as used in common or commercial parlance, as the case may be.

Chapter II: Agency Business Arrangement - Appointment of ABs

6. All PSBs are eligible to conduct Government business as agents of RBI. With effect from February 22, 2003, RBI authorized four PVBs for conduct of Government business (including SG business). With effect from January 31, 2012, all scheduled PVBs were made eligible to conduct any CG / SG business (where RBI pays agency commission) at par with PSBs. Further, with effect from December 15, 2021, it was decided, in consultation with the Department of Financial Services (DFS), Ministry of Finance (MoF), Government of India (GoI), to also make scheduled PBs and scheduled SFBs eligible to conduct Government business. Currently, all PSBs, scheduled PVBs, scheduled PBs and scheduled SFBs are eligible to conduct Government business as agents of RBI. The list of ABs is given in Annex 1.

7. Any eligible bank which intends to handle Government business will be appointed as an AB upon execution of an agreement with RBI. The guidelines/ framework for authorising an eligible bank as an AB are as follows:

7.1 For CG / Union Territory (UT) business: The respective Civil/ Non-Civil Ministry/ Department will work out a proposal with the applicant bank and forward the same to the Office of the Controller General of Accounts (CGA) for examination. The CGA, in turn, will forward its recommendation on the proposal to the Department of Government and Bank Accounts (DGBA), Central Office (CO), RBI. RBI will examine the proposal and, if found eligible, formally appoint the applicant bank as an AB, on execution of an agreement.

7.2 For SG business: The respective department of the SG will work out a proposal with the applicant bank and forward the same to the Finance Department of the SG for examination. The Finance Department of the SG, in turn, will forward its recommendation on the proposal to the respective Regional Office (RO) of the RBI. Thereafter, RO will examine the proposal and forward the same with its comments to DGBA, which will examine the proposal and, if found eligible, formally appoint the applicant bank as an AB, on execution of an agreement.

7.3 Any approval for authorising an AB for CG / UT / SG business, will be subject to the condition that the applicant bank is placed under neither Prompt Corrective Action (PCA) framework nor moratorium at the time of making the application/signing of the agreement with RBI.

8. Accreditation of an AB for Government business:

8.1 The choice of accrediting an AB for any particular Government business rests solely with the respective CG department / UT / SG. The process for accreditation of an AB would be same as elaborated in Para 7.1 (for CG / UT business) and Para 7.2 (for SG business), respectively. Further, CG / UTs / SGs have the option to discontinue the accreditation after giving notice to the AB concerned, keeping RBI informed.

8.2 Once RBI authorises a bank for transacting any Government business, no further approval is required with regard to either mode (physical or e-mode) or area of operations. These will be decided by the Office of CGA (for CG / UT) or the Finance Department of the SG (for SGs), as applicable, keeping RBI informed.