Today News Online Service
New Delhi, February 24
The government today lifted curbs on the grant of government businesses to private banks. “Embargo lifted on grant of govt business to private banks. All banks can now participate,” posted Union Finance Minister Nirmala Sitharaman on Twitter.
This means all private banks will now be allowed to conduct government-related banking transactions such as taxes, revenue and pension payments, and small savings schemes.
“Private banks can now be equal partners in development of the Indian economy, furthering government’s social sector initiatives, and enhancing customer convenience,” she added.
The RBI is expected to authorise all private banks for government businesses, including government agency businesses.
So far only a few private banks such as Axis Bank were permitted to take part in government business.
“This move is expected to enhance customer convenience, spur competition and high efficiency in the standards of customer services,” said a statement by the Department of Financial Services.
“I welcome this progressive reform. It will enable the banking sector to serve customers better,” said Uday Kotak, CEO, Kotak Mahindra Bank.