Modi government plans privatization of banks
The central government plans to privatise many state-owned banks and fund a big budget by selling stakes in some banks
The Narendra Modi government at the Center has accelerated the privatisation process of at least 4 major state-run banks in the country. The government holds a large stake in Punjab and Sindh Bank, Bank of Maharashtra, UCO Bank and IDBI Bank and now wants to sell it. The central government's plan is to privatise many state-owned banks and fund a big budget by selling stakes in some banks.
According to a Reuters report, the PMO has asked officials to speed up the process of selling the stake of these banks.The government holds a large stake in Punjab and Sindh Bank, Bank of Maharashtra, UCO Bank and IDBI Bank and now wants to sell it. According to sources, the central government's plan is to privatize many state-owned banks and fund a big budget by selling stakes in some banks.
The reason for this is that the government banks are facing financial crisis due to the decrease in tax collection. A letter was written to the Finance Ministry from the PM office earlier this month, in which these 4 banks in this financial year are said to complete the process of privatization.
The source said that the process of privatization of banks has started and it is being discussed by the government. Although no official information has been given by the government in this regard so far, but in another report recently it was claimed that the government is working on a plan to privatize about half a dozen banks in the country.
According to economists, the government wants only 4 to 5 government banks in the country. Currently, there are 12 state-owned banks in India, of which the central government holds more than 51 percent. Apart from this, 47.11% stake is in IDBI Bank. Government insurance company LIC holds a 51 per cent stake in this bank.
The government wants to start this process of privatization of banks at a time when the country's major state-run banks are struggling with the NPA crisis. However, the situation regarding privatization process is still not completely clear and the government is constantly discussing in this regard.
Apart from this, some officials have suggested to the government that these banks should be restructured before privatization so that their losses can be reduced. Its privatization government can also offer VRS to additional staff. Under this, such branches in the country and abroad can be closed, which are running in deficit.Apart from banks, Modi government has been planning to privatize larger public entities like railways, Airlines and LIC.The government has been questioned by Congress and labour organizations against the large scale privatization in the country.