You are here: Home » Finance » News » Banks
Business Standard

Payments banks may also join private banks to offer tax, pension services

The finance ministry has now made it clear that there is now no bar on the RBI's authorisation of private-sector banks to offer government business

Topics
payments banks | Reserve Bank of India | PSBs

BS Reporter 

Photo: Shutterstock
Photo: Shutterstock

The government is open to the suggestion to include in the list of lenders that can offer services like tax and pension payments. A day after the ministry lifted an embargo on private-sector offering government-related banking transactions, officials said they were also open to including on the list. They are examining whether the capital structure of the would be sufficient to offer such services without any disruptions.

On Wednesday the ministry announced that not just designated private-sector banks but all private-sector universal banks could offer taxes and other revenue payment facilities, pension payments and small savings schemes to their customers. “This step is expected to further enhance customer convenience, spur competition and higher efficiency in the standards of customer services. 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”, a ministry release noted.

So far, this business was mostly confined to government-run banks. In 2017, the (RBI) had announced that no financial entity other than the designated banks could offer these fee-based services. The ministry has now made it clear that there is now no bar on the RBI’s authorisation of private-sector banks to offer government business. In India, state and central government entities offer a range of services for a fee that is to be paid made through bank challans. While all challans have been made paperless, the public in urban areas, more accustomed to banking with private-sector banks, now wanted the facility to be extended to these banks as well.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, February 25 2021. 11:14 IST
RECOMMENDED FOR YOU
.