RBI New Rule: Private banks of the country will also be able to participate in government business. The Reserve Bank of India (RBI) has issued revised guidelines regarding this. That is, now private banks can earn more by starting a government business.
Now private banks will also do government work
In fact, till now the banking functions of the government were carried out only through the public sector banks, there was absolutely no involvement of private banks in this. Then in February 2021, the Finance Ministry announced the removal of the restrictions imposed in September 2012 on the allocation of government business to private sector banks. Finance Minister Nirmala Sitharaman had said in her social media post a few months ago that private banks too will now be able to participate in the banking operations of the government. The advantage of this will be that by removing the restrictions on private banks, the convenience of customers will increase, competition will increase and customers will get better service.
What are the new rules of RBI
According to the new guidelines issued by RBI, scheduled private banks can participate in government business after agreement with RBI, but those banks which will be in RBI’s PCA (Prompt Corrective Action) will not be allowed to do so. According to the Finance Ministry, now private banks will also be able to become equal partners in the development of the Indian economy, social sector work of the government and to increase the convenience of customers.
Now what will be the effect on customers
Private banks may also be involved in government-related banking transactions such as tax and other revenue payment facilities. This step will increase the convenience of customers, increase competition and will also raise the level of services of customers. Now there is no restriction on giving government banking works to private banks on RBI.
The industry welcomed
Industry veterans have described this move of the government as a good move. Uday Kotak, MD, Kotak Mahindra Bank said that I welcome this progressive reform. With this, the banking sector will be able to provide better service to the customers. Both the private and government sectors should work together for the sustainable development of the country