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Govt to amend two Acts to enable privatisation of PSU banks

Govt to amend two Acts to enable privatisation of PSU banks
Image Source : PTI (FILE)

Union Finance Minister Nirmala Sitharaman

To facilitate privatisation of public sector banks, the federal government is probably going to deliver amendments to two legislations later this 12 months. Amendments can be required within the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources mentioned. These Acts led to nationalisation of banks in two phases and provisions of these legal guidelines have to be modified for privatisation of banks, they mentioned.

As the federal government has already introduced the checklist of legislative enterprise for the Budget session, it’s anticipated that these amendments could also be launched within the Monsoon session or later in the course of the 12 months, sources added.

The ongoing Budget session is scheduled to take up as many as 38 Bills together with the Finance Bill 2021, Supplementary Demands for Grants for 2020-21 and associated Appropriation Bill, National Bank for Financing Infrastructure and Development (NaBFID) Bill, 2021, and Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.

Finance Minister Nirmala Sitharaman whereas presenting Budget 2021-22 earlier this month had introduced privatisation of Public Sector Banks (PSBs) as half of disinvestment drive to garner Rs 1.75 lakh crore.

“Other than IDBI Bank, we propose to take up the privatization of two Public Sector Banks and one General Insurance company in the year 2021-22,” she had mentioned.

Later in a single of the submit Budget interactions, the Finance Minister had mentioned the federal government will work with the Reserve Bank for execution of the financial institution privatisation plan introduced within the Union Budget 2021-22.

“The details are being worked out. I have made the announcement but we are working together with the RBI,” she had mentioned, when requested concerning the proposal.

The authorities final 12 months consolidated 10 public sector banks into 4 and in consequence the entire quantity of PSBs got here down to 12 from 27 in March 2017. As per the amalgamation plan, United Bank of India and Oriental Bank of Commerce had been merged with Punjab National Bank, making the proposed entity the second largest PSB.

Syndicate Bank was merged with Canara Bank, whereas Allahabad Bank was subsumed in Indian Bank. Andhra Bank and Corporation Bank had been amalgamated with Union Bank of India.

In a primary three-way merger, Bank of Baroda merged Vijaya Bank and Dena Bank with itself in 2019. SBI had merged 5 of its affiliate banks – State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad- and in addition Bharatiya Mahila Bank efficient April 2017.

READ MORE: Govt to work with RBI for execution of bank privatisation plan: Nirmala Sitharaman

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