The government can form a panel to make a list of privatization of public sector banks ( PSU Banks ). The government also wants to consider its strategy regarding privatization of PSU banks.
In the last few months, there has been a lot of improvement in the health of banks, especially public sector banks. Many public sector banks have now become profitable. After the earlier privatization, the number of public sector banks has also reduced. Economic Times has given this news.
These banks were identified for privatization
In April 2021, NITI Aayog had recommended the privatization of Central Bank of India and Indian Overseas Bank to the Disinvestment Department. But, the final decision could not be taken in this regard. An official told ET, “A committee may be formed to identify banks for privatization. It will include medium and small-sized banks.
Based on their performance, a decision will be taken to sell the government’s stake in them.” During this time their bad loan portfolio including other parameters will also be taken care of.
Representatives of these departments will be in the panel
The panel could have officials from the Department of Investment and Public Asset Management (DIPAM), RBI and NITI Aayog. A government official said, “Privatization of banks is very high on the agenda. Now all the banks are profitable. So it is necessary to re-think which banks could interest potential investors.” It is expected that the process of privatization will focus on 12 small banks. These include Bank of Maharashtra and UCO Bank. At present, big banks will not be considered.
The finance minister had announced the privatization of two banks.
Finance Minister Nirmala Sitharaman in her budget speech of 2021 had announced the privatization of two banks under the disinvestment program of the government. The government had also prepared the Banking Laws (Amendment) Bill 2021. But, it has not yet been presented in the Parliament.
Plan to make big bank by merging small banks
The government has so far adopted the policy of merging small public sector banks to form big banks. Under this policy, many small banks have been merged with big banks in the last few years. Allahabad Bank, Andhrabank, Syndicate Bank are examples of this.
