After consultation with Finance Ministry, Niti Ayog has started finalizing the names of public sector banks that will privatise soon in this fiscal. Niti Ayog entrusts the selection of names of the two public sector banks along with one general insurance company for privatization for the Budget 2021-22.
As per the sources, several aspects were considered including HR Management, regulatory issues, financial health, etc. before making a conclusion. Once Niti Ayog proposes its recommendations, the Core Group of Secretaries on Disinvestment headed by the Cabinet Secretary will examine them. Few other members of the high-level panel are Revenue Secretary, Economic Affairs Secretary, Corporate Affairs Secretary, Expenditure Secretary, Secretary Department of Public Enterprises, Secretary Legal Affairs, Secretary Department of Investment Public Asset Management, and the Secretary of the administrative department.
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What Finance Minister had said?
Earlier, the Indian Finance Minister Nirmala Sitharaman had said that “interests of workers of banks which are likely to be privatised will be protected whether their salaries or scale or pension all will be taken care of.“
Explaining the rationale for bank privatization, she said that banks in the country need to be better and bigger, just like the State Bank of India. Moreover, she added that the country needs banks that meet the country’s aspirations and ability to scale up.
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Meanwhile, RBI also said there is a discussion with the government over the privatisation of public sector banks. The government also has budgeted Rs 1.75 lakh crore from the sale of a stake in public financial institutions and sector companies. It also includes one insurance company and 2 PSU banks, during this fiscal year. However, the budgeted amount is lower than the record budgeted Rs 2.10 lakh crore that to be elevated from CPSE disinvestment during the last fiscal year.