In a major policy shift, the banks promoted by the nationalised banks or banks having majority government shareholding can now conduct transactions with the government departments, state enterprises and corporations. This will be in addition to the nationalised banks. Based on the recent cabinet decisions, two regional rural banks (RRBs) comprising Maharashtra Gramin Bank and Vidarbha-Konkan Gramin Bank, the IDBI Bank and 15 District Cooperative Banks (DCCBs) have been allowed to hold transactions with the government departments, state enterprises and corporations.
The government on Thursday has issued a notification whereby the departments, state enterprises and corporations can deposit salaries and wages, allowances and pension with these banks also. The state government has also taken decision restricting departments to hold transactions with the private banks.
The Finance Department officer said although some banks are not actually nationalised banks, they are either run by nationalised banks or are owned by other public sector banks in terms of share capital as they have a large shareholding in the government. Such banks are therefore considered in the revised banking policy. ‘’ RRBs’ shareholding comprises 50% by Government of India, 35% by nationalised banks and 15% by state government. The government has selected Maharashtra Gramin Bank and Vidarbha-Konkan Gramin Bank,’’ he told Free Press Journal.
According to him, the government has given go-ahead to IDBI Bank. ‘’The Government of India has 46.46% equity while 51% held by LIC. Together 97.46% share capital is owned by the Government of India and therefore the government has given approval to IDBI Bank to conduct banking transactions,’’ he said.
Further, the government has also selected 15 financially viable and professional District Central Cooperative Banks allowing them to hold transactions with departments, state enterprises and corporations. "These banks were selected based on the scrutiny of the audit report for the last five years and their performance.
The officer informed that the government will enter into a proper agreement with two RRBs, the IDBI Bank and 15 District Central Cooperative Banks and thereafter departments, state enterprises and corporations can start transactions.