Central government employees, pensioners? How this FM Nirmala Sitharaman latest news today may impact you | EXPLAINED

Government of India (GoI) has lifted the embargo on private sector banks for the conduct of government related transactions.

Private sector banks will now be able to execute taxes and other revenue payment facilities, pension payments, small saving schemes, etc. Photo: Reuters

The latest news today is that the Government of India (GoI) has lifted the embargo on private sector banks for the conduct of government related transactions. Finance Minister Nirmala Sitharaman informed about the decision from her official Twitter handle yesterday. Means, the private sector banks will now be able to execute taxes and other revenue payment facilities, pension payments, small saving schemes, etc. So, from the central government employees perspective, from now onwards, the central government employees can now have salary and pension accounts in private banks too, provided their recruiter allows it.

Nirmala Sitharaman Office informed about the lifting of embargo on private sector banks via tweet, "Govt agency biz for Pvt banks now open! Embargo removed. Tax payment & receiving pension made easy. Enhancing Cust. convenience #EoDB & Cust Service. Pvt Banks to be equal partners in Govt.’s Economic & Social agenda. @RBI to authorize Pvt banks."

See Nirmala Sitharaman Office tweet below:

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निजी बैंक अब सरकारी बैंकों के साथ बनेंगे देश के विकास में बराबर के साथी। निजी बैंकों के ऊपर सरकारी व्यवसाय पर लगी रोक हटी। उपभोक्ताओं को मिलेगी बेहतर सेवाएँ व सुविधाएं। सरकार के सामाजिक और वित्तीय समावेश योजनाओं में निजी बैंक भी होंगे भागीदार। @FinMinIndia https://t.co/ITtxalwNbx

— NSitharamanOffice (@nsitharamanoffc) February 24, 2021

Speaking on the impact of this decision on the central government employees Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "The decision taken by the center is a welcome move as it would provide equal business opportunity to the private sector banks. However, from the central government employees' and pensioners perspective, they will now be able to open their salary and pension account in private sector banks provided their recruiter chooses a private sector bank for such transactions."

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Jhaveri went on to add that allowing employees and pensioners to open their salary account and pension account in a private sector bank is completely a discretionary power vested with the recruiter. The common practice is to choose one or two banks for their pension payments and salary payments. Now, they will be able to choose private sector banks for these purposes too. In that case, they might ask the central government employees and pensioners to go for the private sector banks for the same.

Nirmala Sitharaman Office also shared a press brief that says, "With the lifting of the embargo, there is now no bar on RBI for authorization of private sector banks (in addition to public sector banks) for Government business, including government agency business. The Government has conveyed its decision to RBI." The press brief also claimed that the step is expected to further enhance customer convenience, spur competition and higher efficiency in the standard of customer services.

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