Finance ministry allows all private sector banks to participate in government-related businesses – Business News , Firstpost

This step is predicted to additional improve buyer comfort, spur competitors and lift effectivity in buyer companies, a ministry assertion mentioned

File photograph of Union finance minister Nirmala Sitharaman. PTI

New Delhi: The finance ministry on Wednesday allowed all private sector banks to participate in government-related enterprise like assortment of taxes, pension funds and small financial savings schemes.

At the second, solely few giant private sector are allowed to conduct government-related enterprise.

This step is predicted to additional improve buyer comfort, spur competitors and better effectivity in the requirements of buyer companies, an official assertion mentioned.

“Embargo lifted on grant of Govt business to private banks. All banks can now participate. Private banks can now be equal partners in development of the Indian economy, furthering the government’s social sector initiatives, and enhancing customer convenience,” Finance Minister Nirmala Sitharaman mentioned in a tweet.

Private sector banks, that are on the forefront of imbibing and implementing newest know-how and innovation in banking, will now be equal companions in improvement of the Indian economic system and in furthering the social sector initiatives of the federal government, the assertion mentioned.

“With the lifting of the embargo, there is now no bar on RBI for authorization of private sector banks (in addition to public sector banks) for Government business, including Government agency business. The Government has conveyed its decision to RBI,” it added.

The authorities has already introduced its intent to privatise two public sector lenders, apart from IDBI Bank, in the Budget 2021-22.

Sitharaman, whereas presenting Budget 2021-22 earlier this month, had introduced the privatisation of Public Sector Banks (PSBs) as a part of the disinvestment drive to garner Rs 1.75 lakh crore.

“Other than IDBI Bank, we propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22,” she had mentioned.

The authorities final 12 months consolidated 10 public sector banks into 4 and in consequence, the overall variety of PSBs got here down to 12 from 27 in March 2017.

As per the amalgamation plan, United Bank of India and Oriental Bank of Commerce have been merged with Punjab National Bank, making the proposed entity the second-largest PSB.

Syndicate Bank was merged with Canara Bank, whereas Allahabad Bank was subsumed in Indian Bank. Andhra Bank and Corporation Bank have been amalgamated with the Union Bank of India.

In a primary three-manner merger, Bank of Baroda merged Vijaya Bank and Dena Bank with itself in 2019. SBI had merged 5 of its affiliate banks – State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad – and likewise Bharatiya Mahila Bank efficient April 2017.

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