The government is in the process of taking ‘advanced action’ to take forward the privatisation of public sector banks, top finance ministry officials asserted.
In the Union Budget for 2021-22, Union Finance Minister had announced privatisation of two PSBs besides IDBI Bank. However, this year’s Budget Speech had skipped the mention of the progress made for the privatisation of two PSBs.
Even as the NITI Aayog has suggested names of two PSBs for privatisation, the Centre is yet to make an enabling provision in the law for the divestment of the government’s stake sale below the 51 per cent threshold.
The government had listed the introduction of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, in the Winter Session, but the Bill was not tabled. The Aayog had reportedly suggested privatisation of Central Bank of India and Indian Overseas Bank.
According to the amendments to the Banking Companies Act moved last year, the government is looking to retain at least 26 per cent stake in PSBs post privatisation.
What will be the procedure for approval?
The approval to privatise the two PSBs is yet to be considered by the Core Group of Secretaries on Divestment (CGD) headed by Cabinet Secretary.
Once approved by the CGD, the proposal will be sent to the Alternative Mechanism (AM) that comprises Union Finance Minister Sitharaman and Union Minister of Roads Nitin Gadkari.
After their nod, the Cabinet will take up the proposal.