Maharashtra allows private banks to handle some state government transactions

The Maharashtra State Cabinet on Wednesday gave private sector banks in the state approval to handle state government transactions, but in a limited manner.

A press statement issued by the Chief Minister's office said that departmental bank accounts for salaries and allowances may be opened in private banks approved by the State Government. However, no funds other than salaries and allowances can be deposited in them. Retired state government employees can also voluntarily open a pension account in any private bank approved by the state government.

Private banks are required to enter into a separate agreement with the government in this regard, and it was decided that interested banks should submit such proposals to the Maharashtra Finance Department by February 28, the statement said.

The statement added, earlier, banking transactions in government offices, state public enterprises and corporations were carried out only through nationalised banks. Apart from this, nationalised banks also had the mandate to handle pension accounts of retired government employees. Today's decisions allow the government department to use computer technology-based systems and services with the help of private banks. The concerned departments will have to ensure that these banks do not levy any additional charges.