Niti Aayog on Thursday submitted the final names of state-owned banks to be privatized in the current fiscal year to the central group of secretaries on divestment. The government think tank was given the task of selecting the names of two public sector banks and a general insurance company for privatization as in the 2021 Union budget.
“We have submitted the names (of the PSU banks) to the central group of secretaries on divestment,” said an official at Niti Aayog.
After the approval of the small group of secretaries, headed by the cabinet secretary, the final names will be forwarded to the Alternative Mechanism (AM) for its approval and ultimately to the cabinet headed by the prime minister for the final sign, the official added.
Regulatory changes to facilitate privatization would begin after Cabinet approval.
Members of the core group of secretaries include the Secretary of Economic Affairs, Secretary of Revenue, Secretary of Expenditure, Secretary of Corporate Affairs, Secretary of Legal Affairs, Secretary of the Department of Public Enterprises, Secretary of the Department of investment and management of public assets (DIPAM) and a secretary of the administrative department.
Recently, Finance Minister Nirmala Sitharaman said: “The interests of workers in banks that may be privatized will be absolutely protected, whether their wages, scales or pensions are all taken care of.”
Explaining the rationale for privatization, Sitharaman said the country’s banks need to be bigger, just like the State Bank of India (SBI).
“We need banks that are going to be able to develop … We want banks that are going to be able to meet the ambitious needs of this country,” Sitharaman said, adding that a lot of thought had been behind the intention. privatize some public sector banks.
The government budgeted ₹1.75 lakh crore from the sale of stakes in public sector companies and financial institutions, including two PSU banks and one insurance company, during the current fiscal year. The amount is lower than the budgeted record ₹2.10 lakh crore to be raised from the divestment of CPSE during the last fiscal year.
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