Prime Minister Narendra Modi with Finance Minister Nirmala Sitharaman.Public sector banks (PSBs) that were involved in the previous consolidation round along with the State Bank of India (SBI) have been kept out of the privatization plans by the NITI Aayog.
The five concerned PSBs are the Punjab National Bank, Indian Bank, Bank of Baroda, Canara Bank and the Union Bank of India.
As announced in Union Budget 2021, the central government is set to take a decision with regards to the privatization of two banks along with a general insurer in the coming fiscal year.
In August 2019, the Prime Minister Narendra Modi-led government had merged 10 PSBs into four and thus brought down the number of existing PSBs from 27 to 12.
As these banks are still in the consolidation process, privatising them could be disruptive to the same. The Union Finance Ministry is also eager to ensure swift integration of these banks and the Ministry too reportedly shares Niti Aayog's view of not including them in the current divestment target, Economic Times reports.
Once finalised, the Department of Investment and Public Asset Management (DIPAM) will take the concerned proposal to a select group of ministers.
The central government had set a Rs 1.75 lakh crore disinvestment target for FY 22 and banking is one of the crucial strategic sectors that will be focused on as a part of this process.
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