**Policy Summary: Direct Settlement of Agency Transactions with Reserve Bank of India**
This Reserve Bank of India (RBI) directive, reference number DGBA.GBD.No149831.02.007/2017-18, issued on December 7, 2017, outlines a revised procedure for agency banks settling state government transactions. Effective January 1, 2018, all agency banks are required to directly settle both funds and agency commission related to state government transactions with the concerned Regional Office of RBI. This replaces the existing practice in certain states where some agency banks routed transactions through an aggregator bank. The agency commission claims beginning with the quarter ending March 31, 2018 will be settled directly with the concerned Regional Office of Reserve Bank of India.
The move aims to enhance efficiency, security, and speed in state government banking by leveraging Core Banking Solutions (CBS) and RBI's e-Kuber system. This direct settlement process establishes RBI as a single point of contact for settling state government receipts and payments, facilitating improved cash management by state governments and reduced inefficiencies.
Agency banks currently settling transactions directly with RBI may continue to do so. Banks previously reporting through aggregator banks must now settle directly with RBI. Agency transaction details/scrolls should be sent directly by individual agency banks to the concerned State Government/Treasury.
For further information, contact D. J. Babu, Deputy General Manager, Department of Government Bank Accounts, Central Office, Reserve Bank of India, Opp. Mumbai Central Railway Station, Byculla, Mumbai 400 008. Telephone: 022 2308 4121, Fax No. 022 2300 0370/2301 6072/2301 0095, email: pcgmdgba@rbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system and managing the country's currency.
Agency Banks: Banks authorized to conduct government transactions on behalf of the Reserve Bank of India.
State Governments: The governments of the individual states within India, whose financial transactions are facilitated by agency banks.
Regional Office of Reserve Bank: The local branch office of RBI with which the agency banks will be directly transacting.
eKuber: CBS (Core Banking Solution) of RBI which facilitates settling state government funds receipt/payment.
Mumbai: City in Maharashtra, location of the Central Office, Department of Government Bank Accounts of RBI.
Department of Government Bank Accounts: A department within the Reserve Bank of India responsible for managing government banking transactions.
Agency Commission: Commission paid to agency banks by RBI for handling government transactions.
भारतीय �रज़व र् बक�
_______________________ RESERVE BANK OF INDIA _______________________
www.rbi.org.in
RBI/2017-18/107
DGBA.GBD.No-1498/31.02.007/2017-18 December 7, 2017
The Chairman/ Managing Director/ Chief Executive Officer/
Agency Banks
Dear Sir/ Madam
Settlement of Agency transactions in certain cases (for Funds and Agency
Commission) directly from Reserve Bank of India
As per the existing arrangements in certain states, in certain cases, some agency banks
are routing their agency transactions of state governments through another agency bank,
that acts as an aggregator, that in turn settles these agency transactions with concerned
Regional Office of RBI for both receipts and payments. In such scenario, both agency
bank acting as aggregator and other agency bank share the eligible agency commission
on such transactions.
2. In the age of prevailing Core Banking Solutions/e-banking systems in all the
agency banks, Reserve Bank is committed to provide fast, efficient and secure banking
facility to the State Governments by implementation of standardised e-receipts and e-
payments with its CBS (e-Kuber), enabling RBI to act as single point of contact for
settling state government funds (receipts/payment). This will also facilitate better cash
management by the State Governments.
3. Therefore, on review, it has been decided that all agency banks should settle their
agency transactions for both funds and agency commission directly with the concerned
Regional Office of Reserve Bank instead of routing them through any other agency bank
that acts as aggregator in certain cases. It effectively makes all agency banks to report
government receipts directly to RBI instead of reporting them through any other agency
bank. So also for payments made by all agency banks on behalf of state government/s
get directly settled with the concerned Regional Office of RBI. Agency Transaction
details/scrolls may be sent directly by individual agency bank to the concerned State
Government/Treasury. This arrangement is expected to improve management of State
Government funds apart from reducing inefficiencies in the system.4. Agency Banks that are already settling their state government transactions with
RBI directly may continue to do so. Agency Banks that are hither to settling their
transactions with other aggregator agency bank may stop such reporting. Such banks
should settle their agency transaction hereafter with RBI directly. The new arrangement
for settlement of state government funds on day to day basis (receipts and payments)
directly with Reserve Bank will be with effect from January 1, 2018. Thereby, all agency
commission claims beginning with the quarter ending March 31, 2018 will be settled
directly with the concerned Regional Office of Reserve Bank of India.
Yours faithfully
(D. J. Babu)
Deputy General Manager
सरकार� एव ं बक� लेखा �वभाग, केन्द्र�य कायार्लय, मुंबई स�ट्रल रेल्व े स्टेशन के सामन,े भायखला, मुंबई - 008 400
Department of Government & Bank Accounts, Central Office, Opp. Mumbai Central Railway Station, Byculla, Mumbai - 400 008
Telephone: (022) 2308 4121, Fax No. (022) 2300 0370/2301 6072/2301 0095, e-mail : pcgmdgbaco@rbi.org.in
�हन्द� आसान है, इसका प्रयोग बढ़ाइए ।