New Delhi, Jul 7 (IANS): The Ministry of Defence on Thursday said that it has assigned three private sector banks - HDFC Bank, ICICI Bank and Axis Bank - to provide letters of credit and direct bank transfer business for its overseas procurements.

The Ministry said that MoUs in this connection have been signed with each of these three banks recently by the PCDA, on behalf of MoD, a statement said.

Till now, only authorised public sector banks were utilised to provide these services to the MoD, and now for the first time, these private banks will be allowed to provide financial services for overseas procurement.

The selected banks may be allocated with LC business of Rs 2,000 crore, each on the capital and revenue side, for a period of one year on concurrent basis of Rs 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 statement said.