It appears that the center is not currently considering any merger of government banks as now they want to move forward with the target of privatization of public sector banks.
No More Bank Mergers
So, the government will not merge these banks, instead privatize them.
They are planning to start working on this scheme from the beginning of the financial year 2025.
Till date, the government has merged many public sector banks with each other and now they are planning to work on a new plan.
So far almost 15 banks have merged in the country since 2017 and with this there were 27 public sector banks which are now reduced to 12.
But, in its new plan, the government will not merge them, instead is making a new plan to make the banking sector strong and convenient.
It seems that merger of public sector banks is not seen as a better option to the government, hence they are now working on a new plan for these banks.
Improvement In Banks Condition
Prior to this, the media reported that if BJP returns, the Finance Ministry can merge government banks because the condition of the banks had improved due to the earlier bank merger.
And why not! As at the time of merger, the government also injected capital into these NPA banks, showcasing improvement in the condition of the banks.
In this latest development, the government is considering selling its stake in banks.
To be specific, the center is planning to first sell its stake in IDBI Bank in the financial year 2025, as per the media reports.
Interestingly, this news has been going on for almost 2 years.
When it comes to stakes, the government is holding 45 percent stake in IDBI Bank and LIC holds 49.24 percent stake.
The government wants to sell its and LIC’s stake, which means that together the government can sell 60.7 percent of this bank.
Once this happens, the bank will go completely private.
So far, the players such as Kotak Mahindra Bank, CSB Bank and Emirates NBD had shown interest in buying a stake in this bank.
