"India's government has shortlisted four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues... The four banks on the shortlist are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India," two officials told Reuters.
Meanwhile, Business Standard reported
on April 9 that senior officials of the Niti Aayog, the Reserve Bank of India (RBI), and the finance ministry’s financial services and economic affairs departments are expected to meet on April 14 (Wednesday) to discuss the potential candidates for privatisation.
"Four to five PSBs have been suggested by the Niti Aayog and they will be discussed in the meeting.. The names could include Bank of Maharashtra
and Indian Overseas Bank," the report added.
The Aayog is learnt to have prepared a report on PSBs based on their financials, debt and other issues, and accordingly short-listed them. The government may pump in some liquidity in those banks that are currently under the RBI’s prompt corrective action framework, and may consider them for either privatisation or merger once they are out of it.
The government is considering mid-sized to small banks for its first round of privatisation to test the waters and may go for large banks sometime later.
In her Budget speech, Finance Minister Nirmala Sitharaman had announced privatising two public sector banks and one general insurance company in 2021-22. According to the new Public Sector Enterprise policy for Aatmanirbhar Bharat, the Aayog is mandated to recommend the names of PSUs in strategic sectors to be privatised, merged, or made subsidiaries of other PSUs.
Strategic sectors in which the government intends to keep a “bare minimum” presence include atomic energy, space, defence, transport, telecommunications, power, petroleum, coal, banking, insurance, and financial services.
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