New Delhi | Jagran Business Desk: The Finance Ministry on Wednesday lifted the embargo on the grant of government business to private banks, enabling them to participate in economic development ventures and social sector initiatives. Finance Minister Nirmala Sitharman, after the announcement, said, that all private banks in the country can now be equal partners in the development of the economy and can enhance customer inconvenience.

“The Government has lifted the embargo on private sector banks (only a few were permitted earlier) for the conduct of Government-related banking transactions such as taxes and other revenue payment facilities, pension payments, small saving schemes, etc,” a press brief released on Wednesday by the Department of Financial Services.

"Private banks can now be equal partners in the development of the Indian economy, furthering the government's social sector initiatives and enhancing customer convenience," Finance Minister Nirmala Sitharaman's office tweeted on Wednesday.

The decision will enable private banks to conduct government-related banking transactions, like taxes and revenue payment facilities. It will also enable them to make pension payments and small savings schemes. Also, the bar on RBI has also been removed for the authorisation of private sector banks (in addition to public sector banks) for government business.

According to a report by NDTV, the announcement resulted in a surge in the Nifty Bank index, which reached 36,493.90 points, while the BSE Sensex soared more than 1,050 points after the trading resumed on NSE post the technical glitch in the morning. Private banks reached the green spot with HDFC Bank, Axis Bank, ICICI Bank shares surging 4 to 5 per cent.

The National Stock Exchange (NSE) halted trading earlier in the day after live price quotes of spot Nifty and Bank Nifty indexes have stopped updating due to a technical glitch. The glitch occurred as rates on NSE stopped updating at 10.08 a.m. which led to the closure of the F&O segment by 11:40 am and the Cash market by 11:43 am. 

Posted By: Talibuddin Khan