Modi Government is up to do privatization of some public sector banks and decrease the number of public sector banks from 12 to five
PSU banks to decrease in India, Privatisation of banks on card of government
Preparations are on to bring the number of public sector banks in the country from 12 to five. The first step in this direction can be taken to sell the government stake in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab and Sindh Bank. Government and banking sector sources have given this information.
According to sources, the government is of the view that there should be only four to five government banks in the country. An official said that the government is making a new proposal regarding privatization. There will be a plan to reduce the number of banks in this proposal. It will be placed before the cabinet first. The Finance Ministry has not commented in this regard.
Sources said that the country is currently struggling with shortage of funds due to slowing economic activity. In such a situation, the government is working on a plan for privatization to raise money by selling assets in non-core companies and sectors. Many government committees and the Reserve Bank say that there should be no more than five government banks in the country. On the other hand, the government has said that there will be no more mergers in state-owned banks. In such a situation, there is an option to sell stake in some public sector banks.
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Last year, the government decided to merge 10 state-run banks into four large banks. An official said that now the government is preparing to sell the stake of banks which have not been merged. The government’s plan to privatize banks is coming at a time when the NPA of banks is expected to increase due to Corona epidemic. Sources say that in view of the prevailing situation, there will probably be no move towards privatization of banks this financial year. The economy is at a standstill due to the current crisis, which is expected to double the NPAs of banks.
# business# biz# India# PSU banks# number of PSU banks in India# privatise of PSU banks# overhaul of the banking industry# banking# majority stakes sale# economic growth# RBI# divestment plans# NPAs# bad loans# Business