Now, all pvt banks can take part in govt enterprise


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.

New guidelines

  • At present, only few large private sector banks are allowed to conduct government-related business
  • This step is expected to further enhance customer convenience, spur competition and higher efficiency in the standards of customer services

“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.



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