Government should make all public sector banks private except SBI, two big economists presented policy paper

Except State Bank of India (SBI), all other public sector banks in the country should be privatized. Two big economists have recommended this in a policy paper, they said that due to the better performance of SBI, the government can retain its ownership on it for the time being. This policy paper was written by Arvind Panagariya, former Vice Chairman of NITI Aayog and Professor of Columbia University, and Poonam Gupta, Director General of NCAER and a member of the Council which advises the Prime Minister on economic matters. This policy paper was presented in the India Policy Forum on Tuesday.

According to a Times of India news, the policy paper states, “In principle, the privatization case we have made is applicable to all public sector banks including State Bank of India. In the economic and political framework, no government would want that it does not have a state-run bank. Keeping this in view, we say that for the time being the target should be to privatize all banks except SBI.”

The paper further said, “Of course, if the environment becomes more favorable in favor of privatization after a few years, then changing the target, SBI should also be included in the list of privatization.” There will also be pressure on RBI to streamline the entire process, rules and laws, so that it will yield good results.

Privatization of two public sector banks has been announced

Finance Minister Nirmala Sitharaman, while presenting the budget last year, announced the privatization of two public sector banks along with IDBI Bank. Although the name of which these two banks would be, was not announced. According to sources, the government has decided to privatize Central Bank of India and Indian Overseas Bank.