Finance Minister Nirmala Sitharaman.The central government is likely to slash the non-performing loans of the two public sector banks that will be privatized this financial year, Economic Times reports.
Additionally, certain employees from these select banks will be transferred to other state-run lenders to make these entities further attractive prospect for prospective buyers.
The likes of Bank of Baroda, Canara Bank, Punjab National Bank and the State Bank of India that were recently a part of the consolidation process will not be considered for privatization as they are still dealing with their integration challenges. One of the senior government officials told ET, “We could clean up the balance sheet and then offer the bank for sale, if it would get better valuations… All options are open.”
The candidates for privatization will be identified by the finance ministry along with the Niti Aayog in the coming 10 days.
The foundation of this exercise will be laid soon that will include legal changes and also discussions with the Reserve Bank of India regarding the criteria for potential buyers. Meanwhile, bank employees will be offered the alternate option to shift to another PSB ahead of privatization, which will protect their interests.
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