The government now wants to move forward with the target of privatization of public sector banks.
Government Banks: The government is not currently considering any merger of government banks. The government now wants to move forward with the target of privatization of public sector banks. Therefore, the government will not merge these banks but will privatize them. Work on this scheme can start only in the financial year 2025. Actually, the government has merged many public sector banks with each other. But now the government will work on a new plan.
There will be no merger of banks!
It is noteworthy that around 15 banks have merged in the country since 2017. In 2017, there were 27 public sector banks which are now reduced to 12. But now the government will not merge them. Now the government is making a new plan to make the banking sector strong and convenient. The government does not see merger of public sector banks as a better option, hence the government is now working on a new plan for these banks.
What is the new plan of the government?
According to the report of Live Mint, the government is not going to merge any bank now. However, earlier Informist media had said that if BJP returns, the Finance Ministry can merge government banks because the condition of the banks had improved due to the earlier bank merger. At the time of merger, the government also injected capital into these NPA banks, which showed improvement in the condition of the banks. But now the government is considering selling its stake in banks.
Who will be auctioned?
According to media reports, the government will first sell its stake in IDBI Bank in the financial year 2025. Although this news has been going on for almost 2 years. The government holds 45 percent stake in IDBI Bank and LIC holds 49.24 percent stake. The government wants to sell its and LIC’s stake, which means that together the government can sell 60.7 percent of this bank. After this this bank will become completely private. Kotak Mahindra Bank, CSB Bank and Emirates NBD had shown interest in buying stake in this bank.
Committee formed
Earlier also Mint had given detailed information about the government’s plan for privatization of banks. It was said in the Mint report that the NPA of the banks has reduced and they are also in profit. Therefore, the government is now preparing to privatize them. For this, a committee was also formed under the leadership of Finance Ministry, RBI, Niti Aayog. Although no bank has been privatized yet, work is going on to privatize IDBI Bank. However, in the coming time, the government may consider selling its stake in more banks. Finance Minister Nirmala Sitharaman, while presenting the budget for the financial year 2021-22, had also talked about privatization of two public sector banks and one general insurance company. After this, the news started increasing that the government is going to privatize the banks.
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