Preparation For Amendment Of Law For Banks Privatization
Preparation for amendment of law for bank privatization intensifies, the amendment is to be made in Banking Companies Act and Banking Regulation Act.
The Finance Ministry has stepped up preparations to implement the announcement of privatization of two public sector banks and an insurance company in the General Budget 2021-22.
Ministry officials do not want to take any offense in following the deadline given by Finance Minister Nirmala Sitharaman for the privatization of two banks and one insurance company.
Discussions are currently underway in the ministry regarding amendments to the Banking Companies Act and the Banking Regulation Act for privatization.
It is believed that if elections were not held in five states, then a bill in this regard would have been introduced in the current budget session itself.
At present, due to elections, the duration of the budget session is also being discussed. In such a case, an attempt will be made to bring the said amendment bill in the monsoon session.
According to sources in the ministry, the names of the two state-run banks and one government-run general insurance company are yet to be privatized.
Amendment of the law is the first condition to implement this declaration. After the completion of the amendment work, the privatization process can be completed at the appropriate time.
In the General Budget 2021-22, the central government has targeted to achieve Rs 1.75 lakh crore from disinvestment.
To achieve this goal, apart from the privatization of two public sector banks and one insurance company, it would be necessary to sell the government stake in Life Insurance Corporation of India and IDBI Bank.
In this way, the central government’s stake will be sold in five institutions under the Ministry of Finance. Sources say that possibly the entire process will be completed by the third quarter (December 2021) of the next financial year.
Preparation for amendment of law: No decision on the name yet.
Sources associated with the Finance Ministry’s preparations say that there is no truth in the news which has come out in the media about the privatization of Punjab National Bank, Bank of Baroda, Bank of India, or Bank of Maharashtra.
It has not been decided on what basis the banks will be privatized. It is certain that five-six big banks will continue to be under government control. There are currently a dozen state-run banks in India.
Among these, SBI, PNB, BoB, Canara Bank, Bank of India are five big banks. Union Bank of Idea, Central Bank of India, Indian Bank Medium Range, and Bank of Maharashtra.
UCO Bank, Punjab & Sind Bank, and Indian Overseas Bank are relatively small. Probably one bank each in the middle and small category will be privatized.
