Summary of this article
RBI directs agency banks to operate on March 31
Order applies only to branches handling government transactions
Move ensures receipts and payments booked within financial year
The Reserve Bank of India (RBI) has ordered banks handling government business to continue functioning on March 31, 2026, despite the fact that this day has been observed as a public holiday in various parts of the country.
In a notification issued on February 3, 2026, the central bank stated that the Government of India has requested that the banks attending to receipts and payments of the central government remain open to complete all transactions for the financial year 2025-26, which ends on the same day.
March 31 will be observed as a public holiday in many regions, including a regional holiday of Mahavir Jayanti. As per RBI's bank holiday calendar, normal banking operations would otherwise remain shut in parts of the country. However, the special arrangement applies only to banks and branches that conduct government-related business.
What The RBI Notice Says
According to RBI, the agency banks remaining open on March 31 will allow for ensuring that the entire receipts and payments by the government are accounted for within the same financial year. This is important for closing government accounts and finalising fiscal data for the year.
In its official notification, RBI has also directed the banks to give wide publicity to the availability of banking services on March 31. This is meant to ensure that government departments, taxpayers and other stakeholders have awareness that transactions related to government business are possible without disruption.
The central bank has made it clear that the instruction is to be followed by those branches which deal with the receipt and payment of government funds and not necessarily all branches of the bank.
What Is An Agency Bank
An agency bank is a bank authorised by the RBI to perform banking work of the government on its behalf. This involves the collection of direct and indirect taxes, processing payments of the government, and other transactions on behalf of the central and state governments.
At present, all the public sector banks and a few private sector banks work as an agency bank for the RBI. However, only designated branches of these banks are allowed to do government banking business.
Banks like State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, UCO Bank, HDFC Bank, ICICI Bank, IDFC First Bank, IndusInd Bank, and Bandhan Bank are some of the banks that conduct agency banking through select branches.
Bank Holidays In March
March has several RBI-declared bank holidays, which depend on the region, and also on the local festivals and observances. These holidays have a strong impact on services that require a physical visit to a bank branch, whereas digital banking services generally continue to be available.
The latest instruction of the RBI ensures that banking work pertaining to government duties will continue on March 31, so that the financial year 2025-26 can be closed with all receipts and payments duly recorded.
