Employees' interest will be taken into account while privatizing PSU banks: Finance Ministry
FM Nirmala Sitharaman said private sector banks have evolved since their inception and play a major role in the economy
Amid the two-day strike by public sector bank unions, the government on Tuesday told Parliament it will give due consideration to employees’ interests while privatizing public sector banks.
“Once a view is taken with regard to an enterprise to be privatized, material issues pertaining to various stakeholders, including employees and the terms and conditions of their service, are considered. While considering employee matters, relevant factors such as their existing terms and conditions of employment, applicable laws and policies, employees’ interest, and the objective of the new policy of ensuring post-disinvestment growth of the enterprise through private capital etc. are duly taken into account while taking a decision in the matter," minister of state for finance Anurag Thakur told Rajya Sabha on Tuesday.
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Thakur was replying to a question by Trinamool Congress member of Parliament Santanu Sen on the future of the employees of two banks which will be privatized, with regard to salary and service conditions.
Finance minister Nirmala Sitharaman in her FY22 Budget speech announced the government’s intent privatize two public sector banks, a general insurance company and IDBI Bank.
According to the New PSE policy issued by the department of investment and public asset management, recommendations will be made by NITI Aayog with regard to central PSEs under strategic sectors, which include the banking, insurance and financial services sector. The recommendations will be considered for approval by an alternative mechanism headed by home minister Amit Shah.
Replying to a separate question in Rajya Sabha on participation of private banking sector in the Indian economy by Anil Desai of the Shiv Sena, Sitharaman said private sector banks have evolved since their inception and play a major role in the national economy.
“As reported by RBI in their report on Trend and Progress of Banking in India, the contribution of private sector banks in deposits and advances of scheduled commercial banks has increased from 12.63% and 12.56% in 2000 to 30.35% and 36.04% respectively in 2020. As regards to private sector lending, as on 31.03.2020, the amount outstanding under priority sector advances by private banks stood at ₹12,72,745 crore as against ₹23,14,242 crores for PSBs," she added.
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