Bank privatization review on the cards
NEW DELHI : The government plans to review the list of state-run banks slated for privatization amid improved profitability and a significant drop in non-performing loans. A new panel with representatives from the finance ministry, NITI Aayog and the Reserve Bank of India (RBI) is being considered to draw a fresh list of candidates for privatization, two people close to the matter said on condition of anonymity. In the 2021-22 budget, finance minister Nirmala Sitharaman announced plans to privatize two state-run banks, along with IDBI Bank and a general insurance company in the fiscal year.
NITI Aayog recommended two government-owned banks for privatization, and its suggestions were also put before the finance ministry. Unverified media reports suggested that the two banks were Central Bank of India and Indian Overseas Bank. However, the privatization exercise was stalled because of delays in implementing the required legislative changes.
With elections in 2024, it is now expected that privatization efforts can only be resumed after a new government is formed at the Centre. “A panel is being considered to identify probable candidates from among mid- and small-sized banks for privatization. The panel may also decide the quantum of shareholding that the government would dilute in banks while deciding weightage to be given to banks with improved financial parameters and lowered bad loans," said one of the two persons cited earlier.
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