RBI Sets Norms for Agency Banks Handling Government Business

Notification No. CO.DGBA.GBD.No.S44/31.02.007/2026-27, Dated: 30.04.2026

The Reserve Bank of India (RBI) has laid down a comprehensive framework governing the conduct of Government business by Agency Banks, covering agency commission, operational norms, and oversight mechanisms.

1. Scope of the Framework

• Applicable to agency Banks handling Government transactions
• Covers:

1. 1. Collection and payment services
   2. Commission claims and compliance requirements

2. Key Provisions

2.1 Eligible and Ineligible Transactions

The framework clearly defines:

• Transactions eligible for agency commission
• Transactions excluded from commission claims

2.2 Agency Commission Structure

• Specifies applicable commission rates for different Government transactions
• Ensures uniformity and clarity in remuneration to banks

2.3 Timelines for Claims

• Banks must submit agency commission claims within prescribed timelines
• Delays may impact eligibility for reimbursement

2.4 Reporting Requirements

Banks are required to:

• Maintain accurate records
• Submit periodic reports to RBI

2.5 Audit and Oversight

• The framework mandates audit checks and verification processes
• Ensures:

1. 1. Proper utilisation of public funds
   2. Compliance with regulatory norms

3. Accountability and Penal Provisions

• Banks are responsible for accuracy of commission claims
• In case of incorrect or excess claims
• RBI may levy penal interest

4. Objective of the Framework

The directions aim to:

• Enhance transparency and accountability
• Ensure efficient handling of Government transactions
• Strengthen financial discipline among Agency Banks

5. Conclusion

The framework establishes a structured and accountable system for Agency Banks, ensuring that Government business is conducted with accuracy, compliance, and proper oversight, while safeguarding public funds.

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