New Delhi: The government has lifted the embargo on private sector banks to undertake Central and state government business, which is still a forte of the public sector banks and three large private players in a limited way — ICICI Bank, Axis Bank and HDFC Bank.
With the permission, all banks would be allowed to conduct 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, a government statement announcing the changes said.
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, the statement said.
