Govt Will Change Critical Laws To Fasten Privatization Of Insurance Firms, Govt Banks
The central government is known to be in works for introducing some changes in the General Insurance Business (Nationalization) Act (GIBNA), along with two other banking acts, in order to expedite the privatisation process of a public sector general insurance company and two public sector banks.
In the Union Budget meet on February 1, FM Niramala Sitharaman announced the government’s plan to conduct privatisation of two more public sector banks, besides IDBI Bank, along with one general insurance company, in the financial year FY22.
It is anticipated that the amendments currently undergoing GIBNA will be presented in the upcoming monsoon session of the Parliament, as stated by a wire feed.
Changes Being Worked Upon in Major Bills
In August 2019, the government undertook a massive consolidation drive, merging ten public sector banks into four, thereby bringing down the total count from 27 to 12.
Now, the central government is known to be amending the General Insurance Business (Nationalization) Act, which dictates all the provisions for acquisition and transfer of shares of Indian insurance companies, in addition to undertakings of other existing insurers.
Established in 1972, GIBNA serves to alleviate the economy by securing the development of general insurance business in the country.
The said amendments may be put forth in the upcoming monsoon budget session.
The privatisation process will be a part of the government’s disinvestment drive of Rs 1.75 lakh crore.
Sources known to the matter have stated that amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980, would also be required for the privatisation process of the two public sector banks.
The Niti Aayog is rumoured to have taken into consideration some public sector banks, namely Central Bank of India, Indian Overseas Bank, Bank of Maharashtra and Bank of India, for privatisation.
Reportedly, as the public think tank Niti Aayog has almost finalised/shortlisted Bank of Maharashtra and Indian Overseas Bank for privatisation.
Besides, the initial public offering (IPO) of Life Insurance Corporation of India (LIC) and the stake sale of IDBI Bank is still scheduled for FY22.