Confirmed! Two Govt Banks Will Be Sold To Private Firms; Niti Aayog Submits Names

By Arpita Last updated Jun 4, 2021

Niti Aayog on Thursday submitted the list of public sector banks that are to be privatised in the current fiscal year to the Core Group of Secretaries on Disinvestment, news agency PTI reported.

The government think tank was responsible for the selection of the names of two public sector banks and one general insurance company for privatisation, as announced in the Budget 2021 – 2022.

“We have submitted the names (of PSU banks) to the Core Group of Secretaries on Disinvestment,” PTI, on Thursday, quoted a senior government official as saying.

The Core Group Of Secretaries On Disinvestment

The other members of the high-level panel are the economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprise’s secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.

The clearance from the Core Group of Secretaries will be headed by the Cabinet Secretary. The finalised names will go to Alternative Mechanism (AM) for its approval and eventually to the Cabinet headed by the Prime Minister for the final nod.

Changes on the regulatory side to facilitate privatisation would start after the Cabinet approval.

Banks In The Country Needs To Be Bigger!

Finance Minister Nirmala Sitharaman had recently said “interests of workers of banks which are likely to be privatised will be protected whether their salaries or scale or pension all will be taken care of”.

Explaining in the same way as the State Bank of India does (SBI). The justification for the privatisation, according to Sitharaman, was that the country’s banks needed to be bigger.

“We need banks which are going to be able to scale up… We want banks that are going to be able to meet the aspirational needs of this country,” Sitharaman had said, adding that a lot of thought had gone behind the intention to privatise some public sector banks.

During the current fiscal year, the government has allocated Rs 1.75 lakh crore from stake sales in public sector firms and financial institutions, including two PSU banks and one insurance business. The figure is lower than the previous fiscal’s budgeted amount of Rs 2.10 lakh crore for CPSE disinvestment.