Advance action on bank privatisation under way: DFS secy

In the Budget for 2021-22, the government had announced its intent to privatise two public sector banks and one general insurer.

In the Budget for 2021-22, the government had announced its intent to privatise two public sector banks and one general insurer.

The government is at an advanced stage of finalising plans to privatise two state-run banks in sync with the Budget announcement made last year.

Speaking at an event here on Monday, financial services secretary Sanjay Malhotra said, “In so far as bank privatisation is concerned, there is already a statement on the floor of the House by the finance minister for making enabling provision. Advance action on this is under way.”

In the Budget for 2021-22, the government had announced its intent to privatise two public sector banks and one general insurer. Sources had earlier said NITI Aayog had recommended Central Bank of India and Indian Overseas Bank as possible candidates to the core group of secretaries on disinvestment for privatisation.

The Banking Laws (Amendment) Bill, 2021, was listed as part of the legislative business for the winter session of Parliament that concluded on December 23, 2021. However, the government deferred the plan amid protests by bank unions.

Speculations about the government reviving the proposal gained traction after the assembly polls in key states, including Uttar Pradesh, concluded earlier this year.

The draft Bill may suggest the requirement that minimum government holding in PSBs be trimmed to 26% from 51%. The government may also be open to giving up its entire stake in select banks subsequently to garner investors’ interests.

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