NITI Aayog shortlists PSU banks for privatisation

NEW DELHI:  After months of deliberations, the Niti Aayog on Thursday submitted a recommendation on candidates for bank privatisation to Core Group of Secretaries on Disinvestment.

“Yes we have received a recommendation from the Niti Aayog. But, the list is not final. It needs to be discussed further,” a senior official from the finance ministry confirmed it.

Following the clearance from the Core Group of Secretaries, headed by the Cabinet Secretary, the finalised names will go to Alternative Mechanism (AM) the panel for strategic disinvestment for its approval and eventually to the Cabinet headed by the Prime Minister for the final nod.

Changes on the regulatory side to facilitate privatisation would start after the Cabinet approval.

While the official refused to divulge the names of the candidates at this point in time, multiple reports suggest that Bank of Maharashtra and Indian Overseas Bank are likely to be among the candidates.

Niti Aayog was entrusted with the task to identify the government-owned banks and insurance companies that can be made private.

The government is targeting to privatise these state-owned banks by FY22, as part of the government’s massive disinvestment process aimed at raising funds.

The government has a plan to raise Rs 1.75 lakh crore in the current financial year through disinvestment. However, given the Covid situation, this target seems far-fetched.

FY21, the government could raise only Rs 32,000 crore. According to Budget 2021-22, the Centre is looking to privatise two public sector banks and one general insurance company.