HDFC Bank Ltd., ICICI Bank Ltd. and Axis Bank Ltd. have been approved for overseas procurement by India's defence ministry.
The decision has been taken "in line with further opening of allocation of government business to private sector banks", the ministry said in a press release.
The selected banks have been allowed to provide letter of credit and direct bank transfer business for overseas procurement. They each may be allocated letter of credit business of Rs 2,000 crore on capital side and an equal amount on revenue side for one year on concurrent basis.
"The performance of these banks will be monitored regularly," the release said.
This is the first time private banks have been allowed to provide financial services for overseas defence procurement. Till now, only authorised public sector banks were utilised to provide these services to the Ministry of Defence.
Shares of all three private lenders gained, with ICICI Bank leading with a 2% rise.
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