RBI to stop handling cash transactions of govt depts, ministries

The government departments are now identifying bank branches for opening deposit accounts with accredited agency banks. It is learnt that the central bank is helping them in the process.

Senior RBI officials said the move was under a broader plan to hive off many of its retail functions.

It is gathered that RBI wants to terminate its service to state governments too. ‘‘It is also palpable that state governments who have been availing (themselves) of RBI service — either cash transcations or transcations through cheques — are also being actively pursued by the bank to withdraw their operations through it,’’ said Samir Ghosh, general secretary of All India Reserve Bank Employees Association (AIRBEA), in a letter written to RBI Governor Y.V. Reddy.

‘‘RBI is best equipped for handling large and special accounts,’’ Ghosh said. ‘‘What was the necessity then to technologically upgrade the bank’s cash department, counters and public accounts department, which will remain underutilised,’’ Ghosh said in the letter, soliciting the governor’s attention.

The desire to withdraw from providing retail services has coincided with RBI’s effort to reduce staff strength over the years. According to the central bank’s latest annual report, total headcount in the bank is a shade below 25,000 as on December 31, 2003, compared to 28,884 a year ago.

There has been a reduction in headcount in RBI’s cash department as well. From around 10,000 persons in 1996, the cash department has only around 1,500 currently, AIRBEA said.