Three Private Banks to Provide Overseas Procurement Financial Services to Indian MoD

The Indian Ministry of Defense has 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.

Memorandum of Understandings (MoUs) in this connection have been signed with each of these three banks recently by Principal Controller of Defence Accounts (PCDA) on behalf of MoD, an official release issued July 7 said.

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 selected banks may be allocated with LC business of INR 2000 Crore ($252.5 million), each on the capital and revenue side, for a period of one year on concurrent basis (INR 666 Crore or $84 million 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 said.