Finance Minister Nirmala Sitharaman said that India needs large and world-class banks and that discussions are underway with the Reserve Bank of India (RBI).
While addressing the 12th SBI Banking and Economics Conclave 2025, Sitharaman said, “The government is looking at this, and work has already commenced. We are discussing with the RBI and with banks.”
Government, LIC move ahead with IDBI Bank privatisation plan
As part of the privatisation exercise, the government in January 2019 sold its controlling 51% stake in IDBI Bank to the Life Insurance Corporation of India (LIC). Subsequently, the government and LIC announced plans for the strategic sale of their remaining stake in IDBI Bank.
In October 2022, both shareholders invited Expressions of Interest (EoIs) from investors for privatising IDBI Bank by selling a total of 60.72% stake — comprising 30.48% held by the government and 30.24% by LIC.
In January 2023, the Department of Investment and Public Asset Management (DIPAM) received multiple EoIs for IDBI Bank.
SEBI clears LIC reclassification, paving way for IDBI Bank sale
Paving the way for the sale of IDBI Bank, SEBI in August 2025 approved the reclassification of LIC as a public shareholder from a promoter of the bank upon completion of the strategic divestment.
Besides, the government has undertaken a major consolidation exercise in the public sector banking space. In August 2019, it announced four major mergers of public sector banks, bringing down their total number to 12 from 27 in 2017.
Effective April 1, 2020, United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank; Syndicate Bank with Canara Bank; Allahabad Bank with Indian Bank; and Andhra Bank and Corporation Bank with Union Bank of India.
In 2019, Dena Bank and Vijaya Bank were merged with Bank of Baroda. Earlier, the government had merged five associate banks of the State Bank of India and Bharatiya Mahila Bank with SBI.
Sitharaman emphasised that infrastructure creation remains the government’s main focus, noting that capital expenditure has increased fivefold over the last decade.
With the inputs from PTI