The legislation for privatisation of select-public sector banks, which is considered to be in the offing for past few months, could be introduced in the upcoming Monsoon Session of the Parliament, sources told CNBC TV18 on July 11.
Both the houses of Parliament will convene for the Monsoon session from July 18, and are scheduled to continue functioning till August 13.
Persons privy to the development told CNBC TV18 that the government is awaiting the views on the proposed PSB privatisation bill from the union law ministry, before tabling it in the Parliament.
The law ministry is studying the proposed banking law amendments with respect to privatisation, the sources noted, adding that the government may lower the minimum stake in PSBs from 51 percent at present to 26 percent.
Also Read | India’s bank privatisation agenda may not enthuse investors as yet, say experts
The Centre intends to retain minimum presence in banking as a strategic sector, the sources told the news channel. They, however, claimed that the government will exit only those PSBs which have been identified for privatisation.
The banks that may get privatised include Indian Overseas Bank, Central Bank of India and UCO Bank, CNBC TV18 reported. The government's stake in the three lenders stands at 96.38 percent, 93.08 percent and 95.39 percent, respectively.
According to banking sector experts, privatisation of government banks in India is feasible and even desirable considering certain challenges, but the entire sector being in private hands is an eventuality that is at least a decade down the line.
Whether the government will plan faster privatisation of banks will also depend largely on how successful the government is in selling its stake in IDBI Bank, the experts added.
The Department of Investment and Public Asset Management has been holding roadshows for the stake sale, and is expected to call for bids by the end of the month. State-owned Life Insurance Corporation of India (49.2 percent) and the government directly (45.5 percent) are the largest shareholders in IDBI Bank, which has to be diluted to 26 percent.