It is reported that Reserve Bank of India (RBI) has decided to allow private banks also to undertake the business of Central as well as State Government business. So far this was done by the Public Sector Banks and only three major private banks viz. ICICI, HDFC and Axis Banks. The present decision is taken, according to the RBI, to enhance the quality of customer service through more competition, improving customer convenience and broad basing the revenue collection. For this purpose, those private banks handling government business will have to be appointed as agents of RBI.

However, it is clear that this move is only a plan for further privatisation of the government business. The Public Sector Banks are doing a good job and they have kept the Indian economy to a certain safe from the global recession fall-out. The private banks have been putting much pressure of the government for including them also to deal with government business for some time.  This is part of the neo-liberalisation policy to weaken the PSU banks and transfer the major business to the private sector banks.

I hope that the PSU Bank employees’ unions will take up the issue seriously.