Central Bank of India, Indian Overseas Bank Will Be Sold To Private Firms: Niti Aayog Recommends

Central Bank of India and Indian Overseas Bank (IOB) will be the next in the Union Budget’s privatisation drive to be sold off to private investors.

NITI Aayog has further recommended Bank of India (BoI) to also be sold. 

What Happens Next

After this proposal, the next step is vetting to be conducted by disinvestment and financial services departments, as part of a multi-stage process of finalising candidates to be privatised.

Other candidates put forward by NITI Aayog include Central Bank, IOB, Bank of India, Bank of Maharashtra, Punjab & Sind Bank and UCO Bank.

Central Bank and IOB combined are worth Rs 44,000 crore and have been finalised for the govt to sell its stake in.

In the next step of the process, an inter-ministerial group of officers will review the proposal.

Then a group of ministers will also review the same. 

After that, an approval has to be sought by the Union Cabinet.

Financial Services Department and the Department of Investment and Public Asset Management (DIPAM) will examine the proposal and its consequent legislative changes as required for the privatisation.

These entities handle the government’s asset sales programme.

How Long Will The Process Take?

The overall timespan for the whole process is dependent on the prerequisite legislative changes which have to be discussed with the Reserve Bank of India (RBI).

This is so because the central bank provides “special dispensation for state-run banks in several areas”.

Govt’s Plans

Meanwhile, the sale of the centre’s stake in IDBI Bank should conclude this financial year

The plan was deferred due to the second wave of the pandemic in India but the centre has expressed confidence in meeting its target.

It also hopes to raise around Rs 1.75 lakh crore from the privatisation program and LIC’s public listing. 

Privatization Of This Govt Bank Starts: LIC, Govt Will Sell Their Stakes To Private Firms