Finance Ministry allows all Private Banks in Government Business
Private Banks in Government Business:
The Finance Ministry allows all the Private Banks in Government Business. Currently, only some of the big private sectors are allowed to conduct government-related businesses. This article covers the important details about the Private Banks in Government Business and the Private banks in the implementation of government schemes and government businesses.
So, now the embargo has been lifted and this move will enhance the customer convenience and simulate the competition.
It will also stimulate higher efficiency in standards of customer services.
Private banks remain at the forefront of imbibing and implementing the latest technology and innovation in banking.
Now they have become equal partners in the development of the Indian economy.
Now, the bar has also been lifted on RBI to authorize the private sector banks along with the public sector banks for Government business and Government agency business.
Important Things:
At present only state-owned banks and large private sector banks are eligible to conduct government businesses.
This includes collecting revenues and disbursing payments under various government schemes.
While other private sector banks are allowed to open collection accounts for government departments, they were not allowed to do any cash management business, which formed a large chunk of the government business.
Reacting to the announcement, Kotak Mahindra Bank’s chief executive officer Uday Kotak tweeted “it will enable the banking sector to serve customers better.
Private and public sector must both work towards sustainable development of India.”
“Earlier other private sector banks had to go through PSU banks or large private sector banks for even servicing our customers for tax collections.
Government departments used to discriminate against the smaller private banks on the basis of having an extensive branch network requirement.
Now that is not relevant as many aspects of government are becoming tech-centric where smaller banks can play to their strengths,” said a senior banker with a small private sector bank.
These are the highlights and important things to know about Private banks in government businesses.