RBI directive on agency banks functioning on March 31, 2026 (public holiday)

The Reserve Bank of India has issued a specific directive to all agency banks requiring them to keep their branches, which handle government receipts and payments, open for public business on March 31, 2026. This date, although notified as a public holiday, coincides with the final day of the Financial Year 2025–26, making it critical for closure of government accounts and accurate reporting of fiscal data.

This instruction arises from a request made by the Government of India to ensure that every transaction concerning government receipts and disbursements is properly reflected in the books for the Financial Year 2025–26, without any spillover into the subsequent year.

Background and purpose of the RBI circular

The circular bearing reference “Reserve Bank of India RBI/2025-26/204 DoR.CO.SOG(Leg) No.401/09.08.024/2025-26 | Dated: February 03, 2026” is addressed to All Agency Banks and signed by (Dr. Sudarsana Sahoo), Chief General Manager.

Key regulatory intent

The core objectives behind the directive may be summarised as follows:

  • Year-end fiscal accuracy: To ensure that all government-related receipts and payments pertaining to Financial Year 2025–26 are recorded within that same financial year.
  • Avoiding carry-forward of transactions: To prevent government transactions conducted on or around March 31, 2026 from being reported in the books of the next financial year, which could distort fiscal data.
  • Smooth closure of government accounts: To support timely finalisation of the Union and State government accounts and related financial reporting for the year ending on March 31, 2026.
  • Uninterrupted access for assessee and other stakeholders: To allow assessees, businesses, government departments and other entities to carry out crucial payment and receipt transactions on the last day of the financial year, despite it being a public holiday.

Important:
The directive applies only to those branches of agency banks that are authorised to handle government business, such as government receipts and payments, and not automatically to every branch of every bank.

Scope of the directive – who is covered?

Agency banks and their designated branches

The circular is specifically addressed to:

  • “All Agency Banks”

In regulatory and banking practice, agency banks are banks that have been authorised by the Reserve Bank of India to conduct certain government-related banking functions, including:

  • Collection of direct and indirect taxes
  • Handling non-tax receipts on behalf of the government
  • Making government payments (such as pensions, refunds, subsidies and other disbursements)
  • Facilitating other government-related banking operations

The circular clarifies that:

  • Only branches dealing with government receipts and payments are required to remain open.
  • These branches must be open for public transactions on March 31, 2026.

Thus, not every branch of an agency bank is automatically covered; it is specifically those engaged in government business that must operate despite the public holiday.

Nature of transactions covered

While the circular itself speaks broadly of “Government receipts and payments”, in practical terms, this typically includes:

  • Government receipts
    • Direct tax payments (such as income tax, corporate tax, etc.) through authorised branches
    • Indirect tax collections routed via banks where applicable
    • Non-tax receipts such as various government fees, charges and levies
  • Government payments
    • Disbursements such as refunds
    • Payments relating to schemes, subsidies or pensions, where processed through agency bank branches
    • Other authorised expenditure routed through designated branches