New Delhi : In a big boost for the banking sector, especially the private banks, the finance ministry has lifted the embargo on private sector banks for the conduct of government-related banking transactions. After this, there will be no bar on RBI for authorization of private sector banks for Government business, including Government agency business.
“The Government has lifted the embargo on private sector banks (only a few were permitted earlier) for the conduct of Government-related banking transactions such as taxes and other revenue payment facilities, pension payments, small savings schemes, etc. This step is expected to further enhance customer convenience, spur competition and higher efficiency in the standards of customer services” said a government release.
“Private sector banks, which are at the forefront of imbibing and implementing latest technology and innovation in banking, will now be equal partners in development of the Indian economy and in furthering the social sector initiatives of the Government” it added.
The Government has conveyed its decision to RBI.