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Govt to compile a list of small public sector banks for privatisation
ECONOMY & POLICY

Govt to compile a list of small public sector banks for privatisation

The government is likely to form a committee of experts to compile a list of Public Sector Banks (PSBs) that can be privatized. After multiple rounds of consolidation, PSBs have grown larger, more profitable, and less numerous, therefore the government is searching for methods to privatize them.

NITI Aayog has previously advised the disinvestment department to suggest the disinvestment of two state-run banks in April 2021. The Central Bank of India and the Indian Overseas Bank were subsequently selected for the job. The report said that no additional actions were taken in this direction.

The Reserve Bank of India, the NITI Aayog, and representatives from the Department of Investment and Public Asset Management are likely to be on the panel.

A government representative who addressed the issue stated that the government's policy included bank privatization. However, a new analysis of the situation is necessary now that all public sector banks are profitable.

The Nifty PSU Bank Index, which measures the performance of PSU bank shares on the stock market, increased 65.4% in the last 12 months. Nifty50, an indicator that measures the whole Indian stock market, barely increased by 16% in comparison.

See also:
India needs major banks to meet economic shift: Finance Minister
NITI Aayog lists 12 PSUs for privatisation


The government is likely to form a committee of experts to compile a list of Public Sector Banks (PSBs) that can be privatized. After multiple rounds of consolidation, PSBs have grown larger, more profitable, and less numerous, therefore the government is searching for methods to privatize them. NITI Aayog has previously advised the disinvestment department to suggest the disinvestment of two state-run banks in April 2021. The Central Bank of India and the Indian Overseas Bank were subsequently selected for the job. The report said that no additional actions were taken in this direction. The Reserve Bank of India, the NITI Aayog, and representatives from the Department of Investment and Public Asset Management are likely to be on the panel. A government representative who addressed the issue stated that the government's policy included bank privatization. However, a new analysis of the situation is necessary now that all public sector banks are profitable. The Nifty PSU Bank Index, which measures the performance of PSU bank shares on the stock market, increased 65.4% in the last 12 months. Nifty50, an indicator that measures the whole Indian stock market, barely increased by 16% in comparison. See also: India needs major banks to meet economic shift: Finance MinisterNITI Aayog lists 12 PSUs for privatisation

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