Privatization of banks Current Update: Regarding privatization, the nation is working quickly. Additionally, two national government banks will be privatized (bank privatization 2022). Two of the nation’s top economists contend that, with the exception of the State Bank of India, all public sector banks should be turned over to private ownership. Update Ajante, shall we?
Privatization of banks The administration is moving quickly to privatize the nation. Two public sector banks will shortly be privatized by the government, and preparations for this are nearly finished. Likewise, bids have begun for numerous businesses. According to sources, privatization could begin by September of this year. However, two of the nation’s top economists argue that the government should turn over all public sector banks, with the exception of the State Bank of India, to private ownership in the meantime, despite the fact that government workers are also constantly on strike in protest of this.
All banks will be sold out.
Two prominent economists in the nation have stated that, with the exception of the state bank of India, all public sector banks should be privatized, despite opposition to this idea. Poonam Gupta, Director General of NCAER and member of the Council to Advise the Prime Minister on Economic Matters, and Professor Arvind Panagariya of Columbia University have provided this significant recommendation to the government.
In a policy paper they presented at the India Policy Forum, Panagariya and Gupta stated that “Privatization of public sector banks is in the interest of all.” The Reserve Bank of India will face increased pressure to simplify all procedures, rules, and laws so that they can produce positive outcomes when the majority of banks move into the private sector.
All public sector banks, including the State Bank of India, should be privatized in principle, according to the research provided by ncaer.org. However, none of India’s governments would want it to lack a government bank given the country’s economic and political structure. Given this, the objective at this time should be to privatize all other banks other than SBI. After a few years, if the situation still seems good, SBI should also be privatized. In other words, both economists fully endorse making the banks private.
What strategy does the government have?
It is important to note that IDBI Bank and two other public sector banks will be privatized in FY 2022, as indicated by Finance Minister Nirmala Sitharaman when presenting the budget for the current fiscal year. In addition, two PSU banks have been shortlisted for privatization by NITI Aayog. Although there have been ongoing protests, the administration has already made clear where it stands on privatization. Also mentioned by the Finance Minister was the sale of an insurance company during the current fiscal year.
The question now is which two banks will be privatized first, if at all. The Central Bank of India and Indian Overseas Bank were chosen as potential privatization candidates, per the information provided by the sources. The two banks that can be privatized first are the Indian Overseas Bank and the Central Bank of India.
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