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Bank Privatisation: Central Bank of India, Indian Overseas Bank May Be Privatized This Fiscal

Union finance minister Nirmala Sitharaman

Union finance minister Nirmala Sitharaman

Finance Minister had recently said 'interests of workers of banks which are likely to be privatised will absolutely be protected'.

The Centre could privatise the two-state run banks — Central Bank of India and Indian Overseas Bank soon, according to report by Times of India. NITI Ayog, the government think-tank has recently submitted a report to the core group of secretaries on Disinvestment mentioning the names of the two banks the would privatised this fiscal, news agency PTI mentioned.

In the Union Budget 2021, finance minister Nirmala Sitharaman announced privatising of two public sector banks (PSBs) and one general insurance company in 2021-22. According to the new Public Sector Enterprise policy for ‘Aatmanirbhar Bharat’, NITI Ayog has been entrusted with the task to suggest names of PSUs in strategic sectors to be merged, privatised, or made subsidiaries of other PSUs. The report further added that Bank of India could be a potential candidate for privatisation too, according to a report by Times of India.

The department of investment and public asset management (DIPAM) and department of financial services (DFS) will examine the proposal and discuss legislative changes needed for privatisation of banks.

Once the the core group of secretaries, headed by the Cabinet Secretary, clear the names, the report will go to alternative mechanism (AM) for its approval and eventually to the Cabinet headed by the Prime Minister for the final nod.

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Finance Minister had recently said “interests of workers of banks which are likely to be privatised will absolutely be protected whether their salaries or scale or pension all will be taken care of".

Explaining the rationale behind the privatisation, Sitharaman had said that banks in the country needed to be bigger, just like the State Bank of India (SBI).

“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. A lot of thought had gone behind the intention to privatise some public sector banks, she further added.

The Union government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institution. The amount is lower than the record budgeted Rs 2.10 lakh crore to be raised from CPSE disinvestment in the last fiscal.

(With inputs from PTI)

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first published:June 07, 2021, 14:39 IST