Private sector lender CSB Bank on Tuesday said it has been empanelled as an 'agency bank' by the Reserve Bank of India (RBI) to undertake general banking business of central and state governments.

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This appointment will allow CSB Bank to undertake general banking business of the central and state governments which may be entrusted by the RBI, the bank said in a statement.

"As an agency bank of the RBI, CSB Bank is now authorised to enter into an agreement with different state governments and central government departments for businesses such as tax collections, pension payment, collection of stamp duty, etc.," the bank said.

It will also enable CSB Bank to handle a broad range of transactions related to government business, such as tax deducted at source (TDS), goods and services tax (GST), stamp duty, registration, property tax, value-added tax and professional tax, it said further.

Narendra Dixit, head (retail banking) at CSB Bank, said, "This is a good opportunity for us to offer our services to different government departments. With our extensive network of 562 branches across the country, this appointment will ease the routes between government-related payment services and our customers."

This facility shall provide the bank's customers with an efficient path to conduct payments to the government from their existing account with CSB Bank, Dixit added.

The south-based private sector bank said it has been expanding its business by adding new product lines and increasing the distribution channel through physical and digital channels.

Over 85 per cent of the transactions in the bank are conducted through the digital mode, CSB Bank said.