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Bringing optimism in financial market, Finance Minister Nirmala Sitharaman stated that the Centre has lifted the embargo on the grant of government businesses to private banks. This will enable banks to participate in all developmental activities. She said ‘Private Banks can now be equal partners in development of the Indian economy, furthering the government's social sector initiatives and enhancing customer convenience’.

With the lifting of the embargo, all private sector now will be able to conduct government-related banking transactions such as taxes and other revenue payment facilities, pension payments and small savings schemes. The RBI could also, in due course, authorize private sector banks to undertake any other government businesses.

In 2012, the finance ministry had not allowed private banks, barring some, to undertake government business for three years. In 2015, the government had continued with the embargo, and allowed the private sector with existing government agency business to continue without any fresh authorisation to private banks.

Recently, Finance Minister Nirmala Sitharaman, in her budget speech, had stated that more public sector lenders would be privatised in the upcoming fiscal. As per a report, the government has filtered out four state-run banks - Central Bank of India, Bank of India, Bank of Maharashtra, and Indian Overseas Bank for privatisation.