The Reserve Bank of India (RBI) has entered into an agreement with the Jammu & Kashmir government to act as the sole agent for investment of government’s funds and will carry out general banking business of the state government. The agreement would come into effect from April 1, RBI said today.
Jammu & Kashmir Bank would act as an agent for RBI to conduct general banking business of the state government.
“RBI has already been acting as a debt manager to the Jammu & Kashmir government, pursuant to an agreement entered into with the state government under Section 21 A of the Reserve Bank of India Act, 1934, with effect from September 1, 1972,” RBI said in a press release.
The move would take away the special status enjoyed by J&K Bank. Earlier, Jammu & Kashmir availed of overdraft facility from J&K Bank, even as all other state governments availed of it only from RBI. However, from April 1, the state would have to avail of the overdraft facility only from RBI.
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