Govt Determined To Sell These Govt Banks To Private Investors; Privatisation Bill This Monsoon Session?

The legislation for privatisation of select-public sector banks is likely to be introduced in the upcoming Monsoon Session of the Parliament, on July 11, according to sources. 

Privatization of Select-public Sector Banks

The Monsoon session for both the houses of Parliament will convene from July 18, and is scheduled to continue functioning till August 13.

The government is awaiting the views on the proposed PSB privatisation bill from the union law ministry, before tabling it in the Parliament, said the Persons privy to the development. 

It appears that the law ministry is studying the proposed banking law amendments with respect to privatisation. 

 The sources said that the government may lower the minimum stake in PSBs from 51 percent at present to 26 percent.

Centre’s Minimum Presence In Banking

Further adding that the Centre intends to retain minimum presence in banking as a strategic sector. 

Although, the government will exit only those PSBs which have been identified for privatisation, they claimed. 

Banks For Privatisation

The list of the banks that may get privatised include Indian Overseas Bank, Central Bank of India and UCO Bank reportedly. 

So far, the government’s stake in the three lenders stands at 96.38 percent, 93.08 percent and 95.39 percent, respectively.

Privatization of government banks in India is feasible and even desirable considering certain challenges, according to the banking sector experts. 

However, the entire sector being in private hands is an eventuality that is at least a decade down the line.

Experts said that the government will plan faster privatisation of banks depending largely on how successful the government is in selling its stake in IDBI Bank. 

For the stake sale, the Department of Investment and Public Asset Management has been holding roadshows.

Now, they are expected to call for bids by the end of the month. 

So far, State-owned Life Insurance Corporation of India (49.2 percent) and the government directly (45.5 percent) are the largest shareholders in IDBI Bank, which is planning to be diluted to 26 percent.