Bank privatisation: Potential candidates yet to be chosen, says Finance Minister

Bank unions have already called for a two-day strike this week to protest against the privatisation bid.

bank privatisation

A key panel hasn’t yet zeroed in on potential candidates among state-run banks for privatisation, finance minister Nirmala Sitharaman told the Lok Sabha on Monday.

The statement comes amid mounting speculations that the privatisation of two public-sector banks (PSBs), proposed in the Budget for 2021-22, will be pushed to the next fiscal. Bank unions have already called for a two-day strike this week to protest against the privatisation bid. Of course, the government intends to introduce the Banking Laws (Amendment) Bill, 2021, in the ongoing winter session of Parliament to facilitate the sell-off.

Replying to a question, Sitharaman said: “Consideration of various issues related to disinvestment, which inter alia, include selection of the bank(s) is entrusted to the Cabinet committee designated for this purpose. Decision by the Cabinet committee concerned for privatisation of PSBs has not been taken in this regard.”

According to sources, Niti Aayog has already recommended the sell-off of Indian Overseas Bank and Central Bank of India to the core group of secretaries on disinvestment, headed by the Cabinet secretary. This core group will send its recommendation to the alternative mechanism (AM), headed by the finance minister, for its approval. Finally, it will be cleared by the Cabinet.

The new Bill proposes to “effect amendments in Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and incidental amendments to Banking Regulation Act, 1949 in the context of Union Budget announcement 2021 regarding privatisation of two public sector banks”, according to the list of legislative business for the winter session of Parliament.

These laws had led to the nationalisation of banks, so relevant provisions of these laws have to be changed to pave the way for the privatisation.

PSBs ask staff to refrain from strike

Meanwhile, several state-run banks — including State Bank of India (SBI), Punjab National Bank (PNB), Canara Bank, Bank of India, Indian Bank, Union Bank, Central Bank of India, Uco Bank and Punjab & Sind Bank — have exhorted their staff not to join in the strike this week at the behest of bank unions, keeping larger interest of customers in mind.

The United Forum of Bank Unions has called a two-day strike from December 16 to protest against the attempt to privatise two PSBs. This has raised fears of a severe disruption in banking services across the country.

In a statement, SBI said: “We request our staff members to reconsider their decision and refrain from participating in the proposed strike on 16th and 17th December 2021 in the interest of our customers, investors and the bank. Furthermore, considering the ongoing pandemic situation, resorting to a strike will cause great inconvenience to the stakeholders.” PNB, too, made an appeal to its officers’ association and workmen union to “withdraw the proposed strike”.

Canara Bank has convened a meeting with various unions and other relevant stakeholders on Tuesday to discuss the issue. “The bank has made necessary arrangements to ensure normal functioning of its branches and offices,” it said.

Crypto Bill being finalised

Separately, minister of state for finance Pankaj Chaudhary said the government is finalising a bill on cryptocurrency. “A Bill on the Cryptocurrency and Regulation of Official Digital Currency is under finalisation for consideration of the Cabinet,” he said in a reply in the Lok Sabha. The government wants to introduce this Bill in the current session of Parliament, which will be over by December 23.

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