Finance minister Nirmala Sitharaman in a tweet said that private banks can now be equal partners in development of the Indian economy, furthering government social sector initiatives, and enhancing customer convenience.
“Embargo lifted on grant of Govt business to private banks. All banks can now participate,” she said in a tweet.
In a statement the finance ministry said that the government has conveyed its decision to the Reserve Bank of India or RBI. At present besides state run lenders only a few selected private sector banks are allowed to conduct government related banking transcations.
“With the lifting of the embargo there is now no bar on RBI for authorisation of private sector banks for government buisness including government agency buisness, ” the statement noted.
Government related banking transcations include taxes and other revenue payment facilties, pension payments and small savings schemes.