Private banks to make payments for foreign arms purchases, central government selects 3 banks
By Lokmat English Desk | Published: July 8, 2022 11:00 AM2022-07-08T11:00:31+5:302022-07-08T11:00:31+5:30
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The Ministry of Defense has now approved 3 new banks to pay for arms purchases from abroad. Until now, defense procurement deals were paid only through public sector (government) banks in the country. But now it will also have three private sector banks.
The government has selected 3 private banks for this purpose. These include HDFC Bank, ICICI Bank and Axis Bank. Once approved by the government, the three banks will be able to make payments for the purchase of military equipment.
According to PTI, the defense ministry has said that selected banks may be allowed to issue letters of credit for business (defense contracts) up to Rs 2,000 crore. Under the permission, banks will be able to disburse Rs 666 crore annually on both capital and revenue fronts.
The ministry said the performance of private banks would be monitored regularly for this purpose. This will allow you to take further steps as per the demands and needs of the time. Until now, only state-owned banks in the country were offering payment for defense deals.
India buys large quantities of military equipment from abroad. It also has a number of major military agreements with countries such as Russia, the United States, France and Israel. Recently, India has focused on boosting domestic production of defense weapons.
Many private sector companies have also joined it. The government has set up an indigenous defense program to maximize the use of domestically made weapons by the Indian Army. The central government wants to free all three Indian armies from foreign weapons.
The central government is now fully prepared to curb the sale and purchase of foreign weapons. About 70 per cent of the defense equipment is indigenous. This means that in the future, the three armies will get home-made rifles, tanks, missiles, helicopters, UAVs, drones, etc.
Under this program, weapons will be indigenized in four ways. The government will build defense equipment and weapons under MAC-1, Special Purpose Vehicle, IDEX and MAC-2. It also includes plans to export arms abroad by increasing private sector participation.
