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HDFC Bank, Axis Bank, and ICICI Bank are the first private banks to provide financial services in overseas procurement for Defence Ministry. Up till now, only public sector banks were allowed to offer these services for the ministry.
However, in line with further opening of allocation of government business to private sector banks by the Department of Financial Services, the Defence Ministry on Thursday assigned three private sector banks viz HDFC Bank Ltd., ICICI Bank, and Axis Bank to provide the Letter of Credit and Direct Bank Transfer business for overseas procurement by the ministry.
On behalf of the Defence Ministry, PCDA, New Delhi has signed a memorandum of understanding (MoU) with each of these three banks recently.
"Till now, only authorised public sector banks were utilised to provide these services to MoD. With this for the first time three Private Banks have also been allowed to provide financial services for overseas procurement by MoD," the ministry said.
Further, as per the ministry, the three private bank giants may be allocated with LC business of ₹2,000 crore each on the capital and revenue side, for a period of one year on a concurrent basis ( ₹666 crore 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," the ministry added.
HDFC Bank is the largest bank in terms of market valuation, while ICICI Bank, SBI, Kotak Bank, and Axis Bank follows. HDFC Bank, ICICI Bank, and SBI are in the top 10 most valued companies on BSE.
On BSE, HDFC Bank shares closed at ₹1394.45 apiece up by 1.67%. It has a market valuation of ₹7,74,554.61 crore currently and is the third most valued firm on BSE.
ICICI Bank shares ended at ₹741.20 apiece up 2.09%. The bank's market cap stood at ₹5,15,605.02 and is the sixth most valued firm on BSE.
Axis Bank shares finished at ₹659.30 apiece marginally up on the same exchange. The market valuation of the bank stood at ₹2,02,496.43 crore at the latest closing price.