RBI’s Strong Directive: Agency Banks Must Open on March 31 for Crucial Government Transactions

The Reserve Bank of India (RBI) has issued a directive to agency banks to keep their branches open on March 31, 2024. This decision comes in response to a request from the Government of India to ensure the smooth processing of government transactions for the fiscal year 2023–24.

Why the Special Arrangement?

March 31, 2024, falls on a Sunday, a day when banks in India are typically closed. Additionally, banks are also closed on all Sundays and the 2nd and 4th Saturdays of each month. However, given the importance of ensuring that all government transactions for the fiscal year are duly recorded, the government has requested that agency banks make an exception and remain open on this day.

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What Are Agency Banks?

Agency banks are financial institutions authorized by the RBI to conduct banking transactions on behalf of the central and state governments. These banks play a crucial role in handling government receipts and payments, ensuring the smooth functioning of fiscal operations.

List of Agency Banks

The RBI’s directive applies to a wide range of scheduled public sector, private sector, and foreign banks authorized to conduct agency business. Here is the complete list of agency banks affected by this directive:

Scheduled Public Sector Banks (post-amalgamation):

1. Bank of Baroda
2. Bank of India
3. Bank of Maharashtra
4. Canara Bank
5. Central Bank of India
6. Indian Bank
7. Indian Overseas Bank
8. Punjab and Sind Bank
9. Punjab National Bank
10. State Bank of India
11. UCO Bank
12. Union Bank of India

Scheduled Private Sector Banks: 13. Axis Bank Ltd.

14. City Union Bank Ltd.
15. DCB Bank Ltd.
16. Federal Bank Ltd.
17. HDFC Bank Ltd.
18. ICICI Bank Ltd.
19. IDBI Bank Ltd.
20. IDFC FIRST Bank Ltd.
21. IndusInd Bank Ltd.
22. Jammu and Kashmir Bank Ltd. (Approved for limited agency business)
23. Karnataka Bank Ltd.
24. Karur Vysya Bank Ltd.
25. Kotak Mahindra Bank Ltd.
26. RBL Bank Ltd.
27. South Indian Bank Ltd.
28. Yes Bank Ltd.
29. Dhanlaxmi Bank Ltd.
30. Bandhan Bank Ltd.
31. CSB Bank Ltd.
32. Tamilnad Mercantile Bank Ltd.

Foreign Banks: 33. DBS Bank India Limited (Scheduled foreign bank issued license by RBI for carrying on banking business in India through Wholly Owned Subsidiary mode).

Circular from RBI

The RBI issued Circular No. RBI/2023-24/137 on March 20, 2024, addressing all agency banks. The circular instructed all agency banks to keep their branches dealing with government business open on March 31, 2024, to accommodate government transactions for the fiscal year 2023-24.

Conclusion

The RBI’s decision to keep agency banks open on March 31 reflects the commitment to ensuring the efficient functioning of government transactions. By accommodating the government’s request, agency banks play a vital role in maintaining financial stability and facilitating fiscal operations.