Roadmap for financial sector reforms to be unveiled post polls
IFCI) and launch of the initial public offer (IPO) for India Infrastructure Finance Company Ltd (IIFCL) within weeks of new government taking charge. In the first 100 days, privatization of two PSBs, which has been on the back burner, may be revisited and plans laid out for stake sale in more than one general insurer, and possible merger of two or three general insurance companies after recapitalization, said the second person. Also planned is further consolidation of PSBs to create at least one mega-bank in the short-term.
Finance minister Nirmala Sitharaman has mentioned in an interview that India needs more banks that are “maybe three times the size of SBI (State Bank of India). Because SBI is also not in the top 10 (globally)." This would mean further consolation of PSBs on the lines of one in 2019 where as many as 10 PSBs were merged to create four large banks. The government will also cut its stake in five PSBs this fiscal to comply with Sebi’s listing guidelines that mandates 75% public float of shares of listed entities within a three-year period.
The plan is also to reduce stake in other listed financial institutions including GIC and LIC where tge government may look at issuing follow on public offers. "The financial services sector is growing at an exponential pace. These steps will attract more private capital thereby making the public sector undertakings more competitive.
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