Section 45 of RBI Act : Section 45: Appointment Of Agents

Explanation using Example

Example Application of Section 45 of The Reserve Bank of India Act, 1934:

Imagine a scenario where the Reserve Bank of India (RBI) decides to enhance the convenience of banking services in rural areas where its direct presence is limited. To achieve this, the RBI, under Section 45 of the RBI Act, appoints the State Bank of India (SBI) as its agent in these areas.

As an agent, SBI is authorized to receive payments on behalf of the RBI that are required for government schemes. For instance, a farmer wants to repay a subsidized loan provided under a government scheme. Instead of traveling to a distant RBI office, the farmer can now go to the nearest SBI branch, which acts as an agent of the RBI, and make the repayment there. This not only saves the farmer time and travel expenses but also streamlines the process of repayment for the government.