No bank will remain government, all will be private
There has been talk for a long time on privatizing some public sector banks. But according to new information, the government’s plan is to privatize all public sector banks (PSBs). If this plan is completed then not a single bank will remain government. Explain that the plan of the government is to amend the rules to facilitate the privatization of public sector banks. For this, the government will introduce a bill in the upcoming monsoon session of Parliament. Know more about the rest of the planning.
What will be the effect of the new bill Through one of the amendments under consideration, the central government will privatize banks and exit them completely. According to the report of ET, an official has said so. The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 requires the central government to hold at least 51% stake in public sector banks. Earlier, the government’s plan was to retain at least 26 per cent stake in banks during privatization. There was also a need to reduce it gradually.
IDBI Bank Sales According to another official, this bill will provide an enabled mechanism. The government can bring it up in the next session and then work can be done on resolving other issues. The change is based on IDBI Bank’s recent discussions with potential investors. Let us tell you that the government has been planning for a long time to sell IDBI Bank.
Ongoing talks with RBI The Finance Ministry is in talks with the Reserve Bank of India (RBI) on this issue. RBI is the regulator of the banking sector. So the issues of ownership and control of stake related to privatization are also under discussion. At present, promoters can hold a maximum of 26 per cent stake in private banks. Let us inform that the dates for the monsoon session of Parliament have not been announced yet.
The government had already listed the Banking Laws Amendment Bill, 2021 in the winter session of Parliament that was completed on December 22, 2021. But this amendment law was not introduced. The Bill proposed to amend the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 and the Contingent Amendment to the Banking Regulation Act, 1949.
Recommendation of NITI Aayog In April 2021, NITI Aayog had given its recommendations to the Department of Disinvestment on the banks that should be privatized. Central Bank of India and Indian Overseas Bank were included in this list. But the important thing is that their names were not made public. According to people with knowledge of the matter, there has been no significant progress since then. But it is necessary that the process of privatization of IDBI Bank is already going on. The bank was incorporated under the Companies Act, 1956 and its privatization does not require legal amendment. The government may soon ask for expressions of interest from investors to sell this bank.
