The Reserve Bank of India issued the Directions, 2026 governing conduct of Government business by Agency Banks (ABs), covering appointment, commission payment, reporting, and oversight. All eligible public, private, payments, and small finance banks can act as ABs subject to RBI approval and conditions such as not being under PCA or moratorium. The Directions clearly define transactions eligible for agency commission (like government receipts and payments) and exclude items such as prefunded schemes, bank’s own tax payments, and certain financial transactions. Updated commission rates apply (₹40 for physical receipts, ₹12 for e-receipts, ₹80 for pension payments, and 7 paise per ₹100 for other payments). Strict timelines for reporting, claim submission (within 60 days), and data uploads are mandated. RBI strengthens oversight through inspections, audits, and compliance checks, with penalties including penal interest for incorrect claims. The Directions aim to streamline government banking operations, ensure transparency, improve accountability, and standardize processes across Agency Banks.
Reserve Bank of India
RBI/DGBA/2026-27/400
CO.DGBA.GBD.No.S44/31.02.007/2026-27 | Dated: 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
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.
9. Performance of the ABs, on a matrix of various Government initiatives and schemes, will be reviewed from time-to-time by the Government in consultation with RBI. Basis such review, the permission given to the bank concerned to undertake Government business could be potentially withdrawn.
10. A CG Ministry/ Department (in consultation with CGA) and a SG Department [in consultation with the respective Accountant General’s (AG) Office], respectively, may engage any bank for implementation of any of the prefunded schemes without reference to RBI.
11. All ABs shall scrupulously comply with the instructions issued by Government (Central as well as States), without waiting for any further instructions from RBI. For queries related to such instructions, ABs shall take up directly with the respective Government. Similarly, for queries related to reporting to RBI, ABs shall take up with DGBA/ Central Accounts Section (CAS), Nagpur, RBI.
Chapter III: Payment of Agency Commission for Conduct of
Government Business by ABs
A. Government transactions eligible for Agency Commission
12. Transactions related to the following Government business undertaken by ABs are eligible for agency commission paid by RBI:
a. Revenue receipts on behalf of the CG / SGs
b. All payment transactions, including pension payments in respect of CG / SGs, handled by ABs, except those which are pre-funded or where compensation is paid by the Governments to the ABs
c. Any other item of work specifically advised by Reserve Bank as eligible for agency commission
13. Whenever ABs collect stamp duty through either physical mode or e-mode (challan based), they are eligible for agency commission, provided the ABs do not collect any charges from the public or receive remuneration from the SG for conduct of this work.
14. If the AB is engaged by the SG as Franking Vendor and it collects stamp duty from the public for franking the documents, it will not be eligible for agency commission, since the SG is paying commission to it. However, the AB, which collects the stamp duty paid by the Franking Vendor for credit to the Government Treasury through challan (in either physical or e-mode) for purchase of franking bar, would be eligible for agency commission since it is a regular payment of stamp duty as stated above.
B. Government transactions not eligible for Agency Commission
15. The following activities do not come under the purview of AB business and are, therefore, not eligible for agency commission:
i. ABs paying their own tax liabilities through their own branches or through authorised branches of any other AB, including State Bank of India (SBI) or offices of RBI, wherever they do not have their own authorised direct tax collection branch, should indicate the same separately in the scrolls
ii. Furnishing of Bank Guarantees (BGs) / Security Deposits, etc., through ABs by Government contractors/ suppliers, as they constitute banking transactions undertaken by banks for their customers
iii. Short-term/ long-term borrowings of SGs, raised directly from financial institutions and banks, as these transactions are not in the nature of general banking business. RBI pays the ABs separate remuneration, as agreed upon, for acting as agents for management of public debt
iv. The banking business of Autonomous/ Statutory bodies/ Municipalities/ Companies/ Corporations/ Local Bodies
v. Prefunded schemes, which may be implemented by a CG Ministry/ Department (in consultation with CGA) or a SG department
vi. Transactions related to Gold Monetisation Scheme (GMS), 2015
vii. Transactions arising out of Letter of Credit (LC) / BG opened by banks on behalf of Ministries/ Departments etc., as RBI reimburses the paid amount to the banks based on the mandate received from the Governments
viii. Any other item of work specifically advised by RBI/ CG / SG as ineligible for agency commission
16. ABs shall meticulously follow the instructions issued by RBI from time-to-time regarding transactions which are not eligible for agency commission.
C. Transactions related to various Government Schemes
17. The ABs also undertake transactions related to Small Savings Schemes (SSS). The rates of agency commission for SSS transactions are decided and borne by GoI, while they are processed and settled at CAS. As per GoI Notification F. No. 7/10/2014-NS dated October 10, 2017, all PSBs, ICICI Bank Ltd., Axis Bank Ltd., and HDFC Bank Ltd., were authorised to receive subscriptions under National Savings Time Deposit Scheme, 1981, National Savings (Monthly Income Account) Scheme, 1987, National Savings Recurring Deposit Scheme, 1981, and National Savings Certificates (VIII Issue) Scheme, 1989, in addition to the existing SSS. All authorized ABs are paid agency commission for handling transactions relating to the above SSS as per the rates applicable for SSS decided by GoI. All the transactions, i.e., receipt, payment, penalty, interest, etc., shall be directly reported to the CAS on a daily basis similar to the transactions of Public Provident Fund (PPF) Scheme, in order to maintain uniformity in reporting, reconciliation and accounting. The settlement of commission on SSS is processed and settled at CAS. The ABs shall observe the rules and regulations of the respective schemes. Non-observance of rules and regulations will attract penal action. Pecuniary liabilities, if any, arising from such non-observance shall be borne entirely by the AB.
D. Reporting of transactions by ABs to RBI
18. After the operationalisation of NEFT 24×7 and RTGS 24×7, ABs authorised to collect Goods and Services Tax (GST), Customs and Central Excise Duties through Indian Customs Electronic Data Interchange (EDI) Gateway (ICEGATE), Direct Taxes under Tax Information Network (TIN) 2.0 channel, shall upload their luggage files in RBI’s Quantum Payments Exchange (QPX)/ e-Kuber on all days except the Global Holidays. Global Holidays are January 26, August 15, October 02, all non-working Saturdays, all Sundays, and any other day declared holiday by RBI for Government transactions. These luggage files shall be uploaded in RBI’s QPX/ e-Kuber at or before 1800 hours prescribed by the Office of Principal Chief Controller of Accounts (Pr. CCA), Central Board of Indirect Taxes & Customs (CBIC) and Central Board of Direct Taxes (CBDT). No extension in cut-off time beyond 1800 hours will be allowed for uploading of these luggage files in QPX/ e-Kuber.
19. The date of monthly balance transfer for SG transactions is fifth of the succeeding month. The SG transactions (electronic as well as physical mode) of previous month reported after fourth of the succeeding month and those pertaining to earlier months should be reported for accounting to RBI through a separate statement after confirmation by the competent authorities of the SG.
20. For CG transactions (electronic as well as physical mode), or any adjustments thereof, if reported after a gap of 90 days from the date of transaction, ABs must obtain prior approval from the respective Ministry/Department and submit the same to RBI separately at the time of reporting such transactions for settlement.
21. In order to maintain uniformity in reporting, reconciliation, and accounting, ABs shall report the GMS transactions, i.e., receipt, payment, penalty, interest, commission for mobilisation, handling charges, etc., directly through the Government account maintained for the purpose at CAS, on a daily basis as in the case of the transactions of Public Provident Fund (PPF) Scheme, 2019. Further, reimbursement of payments made by banks, relating to Medium Term and Long Term Government Deposit (MLTGD), will be made by CAS. Accordingly, banks shall make payment of interest to the depositors on the respective due dates and thereafter raise claim to Government through CAS.
E. Rates of Agency Commission
22. As per agreement with AB, RBI pays agency commission at rates determined by it. The rates applicable with effect from April 01, 2025, is given in Table 1:
Table 1: Agency Commission Rates
| Sr. No. | Type of Transaction | Unit | Rate | |
| a. | (i) | Receipts – Physical mode | Per transaction | ₹ 40/- |
| (ii) | Receipts – e-mode | Per transaction | ₹ 12/- | |
| b. | Pension Payments | Per transaction | ₹ 80/- | |
| a. | Payments other than Pension | Per ₹100 turnover | 7 paise per ₹100/- | |
23. In this context, the ‘Receipts-e-mode’ transactions indicated at Sr. No. a.(ii) in Table 1 above refers to those transactions involving remittance of funds from the remitter’s bank account through internet banking/ debit card/ credit card/ UPI, etc., as well as such transactions which do not involve physical receipt of cash/ instruments at all. For example, challan generated electronically and submitted to AB, along with cash/ instrument, should be treated as transaction under physical mode.
F. Treating single challan as single transaction
24. A Challan Identification Number (CIN), generated after successful processing of a single Common Portal Identification Number (CPIN), under GST payment process, should be treated as a single transaction, even if multiple major head/ sub-major head/ minor head of accounts are credited. To illustrate, CGST, SGST, IGST and Cess, etc., paid through a single challan would constitute a single transaction. All such records clubbed under a single challan, i.e., CPIN, must be treated as a single transaction for the purpose of claiming agency commission (effective July 01, 2017).
25. Similarly, in case of transactions not covered under GST, a single challan (electronic or physical) should be treated as single transaction only and not as multiple transactions, even if the challan contains multiple major head/ sub-major head/ minor head of accounts that will get credited. Therefore, records clubbed under a single challan processed successfully must be treated as a single transaction for the purpose of claiming agency commission.
G. Procedure for claiming Agency Commission
26. ABs shall submit their claims for agency commission in the prescribed format (with GST details) to CAS in respect of CG transactions, and to the respective RO of RBI for SG transactions, respectively. However, agency commission claims related to GST receipts, direct tax collection under TIN 2.0, and of indirect taxes collection through ICEGATE reported to Mumbai RO, RBI, will be settled at Mumbai RO. Accordingly, all authorized ABs shall submit their agency commission claims pertaining to these receipt transactions to Mumbai RO. The agency commission claim for CG transactions reported to CAS will continue to be settled at CAS.
27. ABs shall furnish their claims for agency commission to RBI within 60 calendar days, from the end of the quarter in which the transactions were conducted. If banks fail to furnish claims within the stipulated period, any subsequent submissions to the RBI must be accompanied by a formal explanation, detailing the reasons for the delay.
28. All ABs shall submit agency commission claims related to Special Deposit Scheme (SDS) transactions to CAS on a quarterly basis. These claims will be settled at CAS. However, ABs shall continue to claim reimbursement of both the interest paid and the withdrawals from the respective ROs of RBI in which the mirror accounts are maintained.
29. ABs shall ensure that agency commission claims are submitted in prescribed format and are accurate.
H. Documents required to be submitted by ABs for claiming Agency Commission
30. The format for claiming agency commission by ABs is given in Annex 2. The formats for certificates to be signed by the branch officials and Chartered Accountants / Cost Accountants are given in Annex 2A and Annex 2B, These certificates are in addition to the usual certificate from Executive Director (ED) / Chief General Manager (CGM)-in-charge of Government business, to the effect that there are no pension arrears to be credited / delays in crediting regular pension / arrears thereof.
31. The agency commission claims can also be certified by Concurrent Auditor / Statutory Auditor. In addition to this, ABs shall ensure that their internal inspectors/ auditors, during the course of their inspection/ audit, verify the agency commission claims submitted by their branches and confirm their accuracy.
32. ABs shall submit the agency commission claims, including applicable GST amount, as per prescribed agency commission rates, to respective ROs/ CAS as per extant instructions of RBI. TDS on GST shall be deducted as applicable by RBI at the time of paying agency commission in accordance with the Government instructions.
I. Clarifications on claiming of Agency Commission
33. ABs would be eligible to claim agency commission for pension transactions at the rate prescribed for pension payment transactions only when the entire work related to disbursement of pension, including pension calculation, is attended to by them. If the work relating to pension calculations, etc., is attended to by the respective Government department/ Treasury, and the bank only credits the pension to the pensioner’s account maintained with it by a single debit to Government account, such transactions are categorised as ‘other than pension payment’ transactions. ABs would, therefore, be eligible for agency commission at rates prescribed for ‘other than pension payment’ transactions.
34. The number of transactions eligible for agency commission should not exceed 14 per pensioner per Financial Year. This includes one monthly credit for payment of net pension and a maximum of two per year for payment of arrears on account of increase in Dearness Relief, if applicable. Cases involving payment of arrears on account of late start/ restart of pension qualifies as a single transaction for claiming of agency commission. In other words, any payment of arrears on account of late start/ restart of pension should be treated as a single credit transaction and not as separate monthly credits.
35. Agency commission is payable to an AB at the full rate provided the transactions are handled by the bank at all stages. However, wherever the work is shared between two banks the agency commission is shared between the banks in the proportion of 75%:25%. Thus, broadly, the agency commission is payable to the ABs as detailed below:
(a) At the full rate, in cases where the transactions are handled by the bank at all stages, i.e., up to the stage of dispatch of scrolls and challans/ cheques to the Pay and Accounts Offices, and treasuries/sub-treasuries
(b) At 75% of the applicable rate, where the dealing branch is required to account for the transaction by passing on the scrolls and documents to the local/ nearest branch of RBI or to any AB conducting Government business
(c) At 25% of the applicable rate, in case AB branch receives the scrolls and documents from dealing branches of other ABs and is responsible for accounting of these transactions and dispatching of the scrolls and documents to the Pay and Accounts Offices, Treasuries, etc.
36. All ABs should settle their agency transactions for both funds and agency commission directly with the respective RO of RBI instead of routing them through any other AB that acts as an aggregator in certain cases. Similarly, payments made by ABs, on behalf of SGs should be directly settled with the respective RO of RBI. Agency transaction details/ scrolls shall be forwarded directly by individual AB to the respective SG/ Treasury. This arrangement for settlement of SG funds on day-to-day basis (receipts and payments) directly with RBI is with effect from January 01, 2018.
37. In many states AB collects e-stamp/ e-court/ e-registration fees on behalf of entity engaged for the service by SG (such as Stockholding Corporation of India Ltd), and subsequently, reports these transactions to the respective RO of RBI for settlement, based on the mandate provided by Government. As stated above, transactions which do not involve physical receipt of cash/ instruments should be treated as ‘Receipts-e-mode’. ABs should not claim commission for such transactions, as applicable for physical receipts, on the basis that mandate to transfer the amount to Government was submitted physically.
J. Penal interest for wrong claims of Agency Commission
38. As per the agreement between the AB and the RBI, violation or non-compliance of instructions issued by Government and/or RBI shall attract imposition of penalty. ABs will be liable to pay penal interest at Bank Rate (as notified by RBI) plus 2% for any settled wrong agency commission claims.
Chapter IV: Oversight of Government Business in ABs
39. In terms of the agency agreement entered with ABs, the RBI carries out periodical inspection of conduct of Government business. The system of oversight of Government business includes, among others, the following:
(a) The scope of the inspection covers Government business conducted at various branches, Central Pension Processing Centres (CPPCs), as well as the Head Offices of ABs. Offices/ branches will be advised of action points, if any, arising out of inspection with a copy to its controlling office
(b) Comments in respect of action points marked as ‘Major’ should be submitted to the ROs of RBI, under which the branch/ office falls, within 30 days from the date of communication of the action points
(c) For ‘Other’ action points, necessary rectification should be ensured by the bank itself. The quality and sustenance of compliance to such ‘other’ action points should also be examined and commented upon by internal audit
(d) As a part of offsite monitoring of Government business, ABs should report details of their Government business as per the formats enclosed in Annex 3 and Annex 4. The completed statements should be e-mailed to dgbaomc@rbi.org.in, with a copy to the RO of RBI under whose jurisdiction the bank falls. A list of ABs and the respective RO of the RBI under which it falls is given in Annex 5
(e) Periodical interactions with senior executives of ABs will be held by the ROs, except SBI, for which the meetings will be held at DGBA, CO, RBI. The purpose of the meetings would be to maintain a line of communication with the AB, and gather first-hand information and feedback on Government business conducted by AB. The agenda for discussion would broadly depend on the bank’s size and nature of Government business handled. The discussions would, at a minimum, include the following:
(i) Developments in the AB’s Government business since previous inspection;
(ii) Sustenance of compliance with inspection findings;
(iii) Progress in examination of large frauds relating to Government business;
(iv) Position with regard to complaints;
(v) Pension payment related issues;
(vi) Issues raised by CG and SG departments such as delays in remittance of Government funds, penalties imposed, etc.
(vii) Issues raised by the Office of Comptroller and Auditor General (C&AG) and other Government agencies in their periodical audit/inspection reports, and
(viii) Other related issues
40. Systems and controls for conduct of Government Banking: In addition to the existing instructions, ABs shall ensure that internal/ concurrent audit at bank branches verifies whether Government business is being conducted as per rules and regulations prescribed by Government/ RBI, including examination of, among other things, agency commission claims, pension payments, etc. A checklist shall be provided to the inspecting officers/auditors, which shall, at a minimum, include the illustrative items given at Annex 6.
Chapter V – Repeal and other provisions
A. Repeal and saving
41. With the issue of these Directions, the existing Directions, instructions, and guidelines for Government Business stand repealed, as given in Annex 7. The instructions and guidelines already repealed shall continue to remain repealed.
42. Notwithstanding such repeal, any action taken or purported to have been taken, or initiated under the repealed Directions, instructions, or guidelines shall continue to be governed by the provisions thereof. All approvals or acknowledgments granted under these repealed lists shall be deemed as governed by these Directions. Further, the repeal of these Directions, instructions, or guidelines shall not in any way prejudicially affect:
(a) any right, obligation or liability acquired, accrued, or incurred thereunder;
(b) any, penalty, forfeiture, or punishment incurred in respect of any contravention committed thereunder; and
(c) any investigation, legal proceeding, or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture, or punishment as aforesaid; and any such investigation, legal proceedings or remedy may be instituted, continued, or enforced and any such penalty, forfeiture, or punishment may be imposed as if those Directions, instructions, or guidelines had not been repealed.
B. Application of other laws not barred
43. The provisions of these Directions shall be in addition to, and not in derogation of the provisions of any other laws, rules, regulations or Directions, for the time being in force.
C. Interpretations
44. For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the Reserve Bank̥ may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the Reserve Bank shall be final and binding.
(Sivakumar Bose)
Chief General Manage
