Government stays the course on bank privatisation: Sources

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The government is on course with the privatisation of two public sector banks (PSBs) and will take appropriate steps in the coming months, sources said. In the Union Budget for 2021-22, the government announced its intent to take up the privatisation of two PSBs in the year and approved a policy of strategic disinvestment of public sector enterprises.

According to sources, the government is committed to the privatisation of two public sector banks and it is on course. Besides, sources also said the divestment of BPCL is also on the card and fresh bids will be invited.

The government had to cancel the sale as only a single bidder was left in the fray, sources said. The government had planned to sell its entire 52.98 per cent stake in Bharat Petroleum Corporation Ltd (BPCL) and invited Expression of Interest from bidders in March 2020. At least three bids came in by November 2020 but only one remains now after the others withdrew from the race.

On the strategic sale of Container Corporation of India (Concor), sources said, there are some issues and the process would be undertaken after those are resolved. The Cabinet, in November 2019, had approved the strategic sale of a 30.8 per cent stake, along with management control, in Concor out of the government equity of 54.80 per cent. The government will retain 24 per cent stake post-sell-off but without any veto powers.

The government think-tank NITI Aayog has already suggested two banks and one insurance company to the Core Group of Secretaries on Disinvestment for privatisation. According to sources, Central Bank of India and Indian Overseas Bank are likely candidates for privatisation.

As per the process, the Core Group of Secretaries, headed by the Cabinet Secretary, will send its recommendation to Alternative Mechanism (AM) for its approval and eventually to the Cabinet headed by the Prime Minister for the final nod. The members of the Core Group of Secretaries include economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.