Govt Determined To Sell Two Govt Banks To Private Investors: Are They Central Bank of India and Indian Overseas Bank?

The Center is planning the privatization of two public sector banks (PSBs) and is all set to take appropriate steps in the coming months, as per the latest updates.

Privatization Of PSB’s

Earlier, the government announced its intent to take up the privatization of two PSBs in the year during the announcement of the Union Budget for 2021-22.

It has approved a policy of strategic disinvestment of public sector enterprises.

With this development, it appears that the government is committed to the privatization of two public sector banks and it is on course, said the sources.

BPCL Disinvestment

Apart from this, the divestment of BPCL is also on the card and fresh bids will be invited, sources confirmed.

The government had to cancel the sale as only a single bidder was left in the fray, sources said.

As per this development, the center had planned to sell its entire 52.98 percent stake in Bharat Petroleum Corporation Ltd (BPCL).

 Further, they have invited Expression of Interest from bidders in March 2020. 

For BPCL, three bidders have shown interest  by November 2020 but only one remains now after the others withdrew from the race.

Basically, there are some issues On the strategic sale of Container Corporation of India (Concor) and sources said that the process would be undertaken after those are resolved.

Prior to this, during November 2019, the Cabinet had approved the strategic sale of a 30.8 per cent stake.

This included management control, in Concor out of the government equity of 54.80 per cent. 

Although, the government will retain 24% of stake post-sell-off but without any veto powers.

Disinvestment Of Banks And Insurance Company

On Disinvestment for privatization, the government think-tank, NITI Aayog has already suggested two banks and one insurance company to the Core Group of Secretaries.

 The Central Bank of India and Indian Overseas Bank are likely candidates for privatization, as per the information provided by sources.

Coming to the process, the Core Group of Secretaries, headed by the Cabinet Secretary, will send its recommendation to Alternative Mechanism (AM) for its approval.

Eventually, this will be sent to the Cabinet headed by the Prime Minister for the final nod.

Here the Core Group of Secretaries include 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.