Government shortlisted four mid-sized state-run banks for privatisation. The decision came as a new push to sell state assets and shore up government revenues. The four banks shortlisted are Bank of Maharashtra, Bank of India, Indian Overseas Bank and the Central Bank of India. Two of which will be selected for sale in the 2021/2022 financial year.
The government is considering mid-sized to small banks for privatisation. Perhaps the country may also look at bigger banks in future for privatisation as well. The government will continue to hold a majority stake in India’s largest lender State Bank of India. Government also wants to overhaul a banking sector which currently suffers from heavy load of non-performing assets. And these have gone up due to pandemic.
Meanwhile workers began a two-day strike opposing the government’s move to privatise banks and thereby sell stakes in insurance. It is said that the actual privatisation process may take 5-6 months. The government hopes that the Reserve Bank of India will soon take away lending restrictions on Indian Overseas Bank after an improvement in the lender’s finances. This may also help its sale.