Bank executives said this is step to broad-base set up and enhance quality of service for government business
Topics
Payment banks | RBI | Private banks
Abhijit Lele |
Last Updated at December 16, 2021 01:27 IST
Reserve Bank of India
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.
It has now been decided in consultation with the government of India, to make scheduled payments banks and scheduled small finance banks eligible to conduct such business, RBI said in a notification.
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. They can do so only when they comply with the overarching regulatory framework prescribed for these banks.
Bank executives said this is step to broad-base set up and enhance quality of service for government business. This is enabling provision and does not guarantee a certain business volume. These banks would have to work out priorities and strategy for business from governments – central and state.
Early this year in February the government had lifted the embargo put on further allocation of Government business to private sector banks. The embargo was clamped from September 2021. Subsequently, RBI reviewed and revised the framework (in May 2021) for authorising Scheduled Private Sector Banks as agency banks.
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First Published: Wed, December 15 2021. 23:00 IST
Bank executives said this is step to broad-base set up and enhance quality of service for government business Topics Payment banks | RBI | Private banks Abhijit Lele | Mumbai Last Updated at December 16, 2021 01:27 IST Reserve Bank of India 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. It has now been decided in consultation with the government of India, to make scheduled payments banks and scheduled small finance banks eligible to conduct such business, RBI said in a notification. 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. They can do so only when they comply with the overarching regulatory framework prescribed for these banks. Bank executives said this is step to broad-base set up and enhance quality of service for government business. This is enabling provision and does not guarantee a certain business volume. These banks would have to work out priorities and strategy for business from governments – central and state. Early this year in February the government had lifted the embargo put on further allocation of Government business to private sector banks. The embargo was clamped from September 2021. Subsequently, RBI reviewed and revised the framework (in May 2021) for authorising Scheduled Private Sector Banks as agency banks. Dear Reader, Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance. We, however, have a request. As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed. Support quality journalism and subscribe to Business Standard. Digital Editor First Published: Wed, December 15 2021. 23:00 IST