Two Large PSU Banks Will Be Merged Before Privatisation: Will This Lead To Job Loss?
As per sources in the Finance Ministry, there is a possibility that the government will discuss the merger of two public sector banks and then put them up for privatization.
Read on to find out all the details about this new decision of the government right here!
Two Public Sector Banks To Be Merged Before Privatization?
As per reports, the government will look into the balance sheet of banks in the first quarter of the next financial year. After this, the government will consider a merger of two public sector banks and then put them up with privatization.
However, the sources in the Finance Ministry have said that the government has not shortlisted any bank yet. The banks that will be merged will be finalized only after the balance sheet is examined by the government.
As per a senior official with the finance ministry, “Lots of names are floating but we have not shortlisted anything yet. It will be decided after taking into account performance of the Q4 (Jan- March 2021) and Q1 of FY22 ( April to June 2021) after consultation with the RBI. If required, the PSBs can be merged before privatisation.”
When Will These Banks Be Privatized?
In the budget speech, the finance minister, Nirmala Sitharaman, had announced that two state-run banks will be privatized in the next fiscal. She also said that other than IDBI Bank, privatization of two public-sector banks and one General Insurance company would be taken up in the year 2021-22.
Some other banks, such as Bank of India, Punjab, and Sind Bank have also been in rumors in various media reports. However, the official has stated that it may not be the “weakest” bank that will be put up for privatization.
The decision, as revealed by the official, will be taken on the basis of unlocking the valuation. The decision will not be taken on the basis of being the weakest bank. Apparently, a lot of factors will be taken into consideration in the decision making process and also on the appetite of the investor.
The process, however, will not be initiated in the first half of the next financial year.