All pvt banks to handle govt businesses as agents: RBI

The Reserve Bank of India (RBI) today said all private sector banks would now be eligible to handle central and state government business as agents of the central bank, at par with public sector banks.

So far, the facility was limited to only three private sector -- ICICI Bank, HDFC Bank and Axis Bank.

"...It has been decided that all private sector banks will now be considered eligible to handle any central/state government business [where RBI pays agency commission] at par with public sector banks," the RBI said in a circular.

It said the decision is aimed at enhancing the quality of customer service in government business through more competition.

The move will improve customer convenience by increasing the number of customer service outlets and broad basing the revenue collection and payments mechanism of governments, the central bank said.

The new rule comes with immediate effect, the RBI said.