In line with further opening of allocation of government business to private sector banks by the department of financial services, the ministry of defence has assigned three private sector banks, namely HDFC Bank, ICICI Bank and Axis Bank, to provide the letter of credit (LC) and direct bank transfer business for overseas procurement by the ministry. PCDA (Principal Controller of Defence Accounts), New Delhi, recently signed MoUs with each of these three banks on behalf of the MoD.
Until now, only authorised public sector banks provided these services to the MoD. For the first time, three private banks have been authorised by the MoD to provide financial services for overseas procurement.
The selected banks may be allocated with LC business of Rs20 billion, each on the capital and revenue side, for a period of one year on concurrent basis (Rs6.66 bn for each bank under both capital as well as revenue). The performance of these banks will be monitored regularly so as to take necessary further action as required.
