The Reserve Bank of India, on November 1, has appointed Bandhan Bank as its agency bank. The bank is now an authorised agent for undertaking government business and matters on behalf of the RBI.

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"Since its launch six years ago, Bandhan Bank has been dedicated to bringing millions of Indians into the fold of formal financial services and catalysing the creation of sustainable livelihoods,” said Chandra Shekhar Ghosh, Managing Director and Chief Executive Officer, Bandhan Bank.

Bandhan Bank, one of India's youngest universal banks, joins the list of other private banks that are authorised to act on behalf of the RBI. The other private banks – ICICI Bank Ltd, UTI Bank Ltd, IDBI Bank Ltd and HDFC Bank Ltd - have been recognised as agents of the RBI as well.

An Agency bank of the RBI is authorised to handle transactions related to the collection of state taxes and revenue receipts such as GST and VAT, the collection of stamp duty and the collection of pension payments on behalf of the Central and state governments.

"The RBI’s decision to authorise Bandhan Bank to undertake government business as an Agency Bank will further help us contribute to nation-building, and we thank the RBI for this approval," Ghosh added.

Bandhan Bank was started in 2001 as a not-for-profit enterprise aimed at financial inclusion and women empowerment. The company turned into an NBFC later and then into an incorporated bank in 2015, the first microfinance entity to be transformed into a full-fledged bank. The bank now has an extensive network of branches especially in rural and semi-urban areas where it is bringing the latest products and services and digital banking capabilities.

Bandhan Bank has over 2.4 crore customers and now it will have the opportunity to serve the government, Ghosh added.