Bank privatisation on course as per schedule, says FM Sitharaman

The privatisation of public sector banks will go ahead as planned, Finance Minister Nirmala Sitharaman has confirmed.

"About the bank privatisation, they will go on as per schedule. There is no change in it," Sitharaman said on May 29 in Mumbai.

The finance minister was addressing the media in the country's financial capital on the occasion of the Narendra Modi government completing nine years in power.

In her 2021 Budget speech, Sitharaman had announced that the goverment would look to privatise two public sector banks in 2021-22.

"Other than IDBI Bank, we propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22. This would require legislative amendments and I propose to introduce the amendments in this Session itself," Sitharaman had said in February 2021.

However, little progress has seemingly been made on this front. As per the latest reports, the government may set up a committee to prepare a fresh list of state-owned banks that can be privatised, with NITI Aayog having reportedly recommended the privatisation of the Central Bank of India and Indian Overseas Bank way back in April 2021.

"Bank privatisation is very much on the agenda but now all banks have turned profitable, so a reassessment is required as to which lender can be put on the block based on interest from potential investors and other such factors," the Economic Times reported on May 16, quoting an unnamed government official.

India currently has 12 public sector banks: Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Punjab & Sind Bank, Punjab National Bank, State Bank of India, UCO Bank, and Union Bank of India.