Reserve Bank of India (RBI) on Wednesday allowed scheduled payments institutions as well as small finance lending bodies to conduct government business.
“It has now been decided in consultation with the department of financial services, ministry of finance, to make scheduled payments banks and scheduled small finance banks eligible to conduct government agency business,” the RBI said in a notification.
Any payments bank or small finance bank, which wants to take up government agency business, may be appointed as an agent of RBI after the execution of a pact with the central bank, provided that the overarching regulatory framework prescribed for these banks is complied with, the order added further.
“The bank can participate in government and other large corporations issued request for proposals (RFP), primary auctions, fixed-rate and variable rate repos, and reverse repos, along with participation in marginal standing facility,” RBI said.
Also, these institutions will be eligible to partner in government-run financial inclusion schemes, it further said.