FM reiterates Govt’s intent to privatise public sector banks in response to parliament question

Finance Minister Nirmala Sitaraman.

The finance ministry on July 18, reiterated commitment to privatization of state-run banks. Answering a question, Finance Minister said, “The Government had introduced New Public Sector Enterprise (PSE) Policy for Atmanirbhar Bharat which has been notified on 4th February, 2021 and is applicable to Central Public Sector Enterprises (CPSEs), Public Sector Banks (PSBs) and Public Sector Insurance Companies (PSICs). As per this policy, existing Public Sector Enterprises (PSEs) have been broadly classified under Strategic and Non-strategic Sectors.”

In Union budget 2020, Finance minister Nirmala Sitharaman had first mentioned about government plan to privatise public service banks (PSBs).

Nirmala Sitharaman in the budget speech of 2020 had announced that government intent to take up privatisation of two public sector banks and approval of policy of strategic disinvestment of public sector enterprises.

In the ongoing monsoon session, it has been mentioned that the details of the final list of PSUs in each of the strategic sectors that will not be disinvested or privatized but retained by the Government
New Public Service Enterprises (PSE) policy, enables growth of public sector enterprises through infusion of private capital thereby contributing to economic growth and jobs.

The government came out with detailed guideline regarding the norms of the new PSE policy in December 2021. Government has strongly advocated for privatisation for an Improved financial health and accordingly prepared a strong ground for the privatisation of public sector banks, a long pending financial sector reform.