Private Firms Will Buy Central Bank of India and Indian Overseas Bank? Suggestions After High Level Meeting

A high-level panel led by the cabinet secretary briefly collaborated to work out numerous regulatory and administrative concerns so that the plan could be submitted to the group of ministers on disinvestment or Alternative Mechanism (AM) for approval.

Earlier the government announced plans to privatise two public-sector banks in its budget. 

NITI Aayog has been entrusted with the task of selecting the banks and one general insurance company for the privatisation.

The Shortlisted PSU Banks

NITI Aayog has suggested a couple of bank names for privatisation to the Core Group of Secretaries on Disinvestment headed by Cabinet Secretary in April, sources said.

The meeting of the high-level panel deliberated on the recommendation of the NITI Aayog on Thursday, June 24, sources said.

The panel after tying up all loose ends will send the names of the shortlisted PSU banks to AM for consideration, sources added.

“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.

Clearance From The Core Group Of Secretaries

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.

Following clearance from AM, it will go to the Union Cabinet headed by the Prime Minister for the final nod. Changes on the regulatory side to facilitate privatisation would start after the cabinet approval.

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 Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.

Banks To Be Probable Candidates For Privatisation

Central Bank of India and Indian Overseas Bank are reported to be probable candidates for privatisation.

The government has budgeted ?1.75 lakh crore from stake sale in public sector companies and financial institutions, including two PSU banks and one insurance company, during the current financial year.

 The amount is lower than the record budgeted ?2.10 lakh crore to be raised from CPSE disinvestment in the last fiscal.