Bank Privatisation: Public sector banks have performed better and given fewer problematic loans overall. The administration is working hard to start fresh privatisation plans in the meantime. The Finance Ministry and members of the Reserve Bank of India are planning to review the list of public sector banks.
Exploration of a New Panel
A new panel comprising representatives from the Reserve Bank of India, NITI Aayog, and the Finance Ministry is reportedly being explored to create a fresh list of potential privatisation candidates, according to a Live Mint article.
Two public sector banks should be privatised, according to NITI Aayog’s recommendations, which have also been presented to the Finance Ministry. The Indian Overseas Bank and the Central Bank of India are identified as these two banks.
Budget Discussion Highlights
According to the article, Nirmala Sitharaman, the finance minister, spoke about these two banks during the 2021–2022 budget discussion. In addition, the announcement was made regarding the privatisation of IDBI Bank and a general insurance company. But for a variety of reasons, this plan was put on hold, and as of right now, 2024 is when it is anticipated to resume.
Formation of Privatization Panel
The panel that will identify some medium-sized and small-sized banks for privatisation is being considered by the central government. The article claims that the panel has the authority to determine the amount of the government’s bank stake that will be reduced. Additionally, a choice can be made about the weight assigned to banks with stronger financial standards and a decrease in problematic loans.
Consolidation for Fortification
In order to fortify smaller banks, banks have combined weaker banks into larger ones prior to the planned privatisation process. Beginning on April 1, 2020, ten public sector banks combined into one. India now has 12 public sector banks, compared to 27 in 2017.
These are the banks
State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank, Bank of India, Bank of Maharashtra, Central Bank of India, UCO Bank, Indian Overseas, Indian Bank, Union Bank of India, Bank of India, and Bank of India are among the twelve PSB banks.
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