MANU/RMIC/0060/2016

Ministry : Reserve Bank of India

Department/Board : Department of Government and Bank Accounts

Circular No. : DGBA.GAD.No-3147/44.01.001/2015-2016
                   RBI/2015-2016/361

Date : 07.04.2016

The Chairman/ Managing Director/ Chief Executive Officer/
Agency Banks

Dear Sir/ Madam

Oversight of Government Business in Agency Banks

As you are aware, in terms of the agency agreement entered into with agency banks for conduct of government business, the Reserve Bank of India carries out periodical review/inspection of government business. We have so far been conducting such review/inspection at select branches, including Focal Point Branches and Centralised Pension Processing Centres (CPPCs). Relative reports were being issued to the branch/office concerned at the end of the review/inspection.

2. It has since been decided to put in place a new system of oversight of government business. Accordingly, the following will be the main changes:

a. The scope of the review/inspection will now also cover government business at the Head Offices of agency banks. Various branches and CPPCs will continue to be visited as hitherto.

b. The current practice of issuing reports at the end of the review/inspection will be discontinued. However, the offices/branches will be advised of action points, if any, with a copy to its controlling office.

c. Comments in respect of action points marked as "Major" may be submitted to the Regional Offices of the Reserve Bank under which the branch/office falls.

d. As regards other action points, necessary rectification may be ensured by the bank itself. However, its quality and sustenance may be examined and commented upon by internal audit.

3. As a part of the new arrangements, it has been decided to introduce offsite monitoring of government business. Accordingly, agency banks may report details of their government business as per the formats enclosed in