The Centre has lifted the embargo on grant of government business to private banks, enabling banks to participate in all developmental activities. "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 tweeted on Wednesday.
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 Govt's social sector initiatives, and enhancing customer convenience. @FinMinIndia@DFS_India— NSitharamanOffice (@nsitharamanoffc) February 24, 2021
With the lifting of the embargo, private banks will be able to conduct government-related banking transactions such as taxes and other revenue payment facilities, pension payments and small savings schemes. The RBI could also, in due course, authorize private sector banks to undertake any other government businesses.
The Nifty Bank index surged nearly per cent to 36,493.80 on the back of the announcement by the Finance Minister as the markets resumed trading resumed post the technical snag on NSE. Private sector banks are in the limelight, with HDFC Bank, Axis Bank, ICICI Bank have surged 4-5 per cent. The BSE Sensex soared more than 1,050 points as a result.