Centre lifts restrictions on private sector banks for govt transactions

New Delhi: The Union Government has lifted the restriction on private sector banks for the conduct of Govt-related banking transactions.

Earlier only a few were permitted to conduct transactions such as taxes and other revenue payment facilities, pension payments and small savings schemes.

The government is of the view that 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.

This step is expected to further enhance customer convenience, spur competition and higher efficiency in the standards of customer services.

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.