The finance ministry on Monday said it will take a view on the proposed privatisation of some public sector banks (PSBs) after consultation with ministries and the Reserve Bank of India (RBI).
“Before such consideration for decision thereon, consultation is undertaken with the ministries and departments concerned and, where necessary, with the regulator concerned,” minister of state for finance Bhagwat Karad told the Lok Sabha in a written reply to a question on PSBs privatisation.
In the Union Budget for 2021-22, the government’s intent to take up privatisation of two PSBs and approval of a policy of strategic disinvestment of Public Sector Enterprises (PSE) was announced.
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The objectives of the PSE policy include the enablement of growth of public sector enterprises through the infusion of private capital, thereby contributing to economic growth and new jobs, and financing of social sector and development programmes of the government.
The government would minimise number of state-run firms in strategic sectors, including banking while fully exiting from non-strategic sectors.
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The government will need to either amend or repeal the Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980, usually referred to as nationalisation Acts, to remove the hurdle to privatization. However, The relevant Bills are yet to be introduced in Parliament.
Sources said the government may delay the proposed privatisation of some PSBs until the next general elections are completed in May 2024.
