Tag: central bank of India

Government has shortlisted these four mid-sized state-run banks for privatisation, under a new push to sell state assets and shore up government revenues, three government sources said. Two of those banks will be selected for sale in the 2021/2022 financial year which begins in April, the officials said. The shortlist has not previously been reported.

The government is considering mid-sized to small banks for its first round of privatisation to test the waters. In the coming years it could also look at some of the country’s bigger banks, the officials said.

Bank of India has a workforce of about 50,000 and Central Bank of India has 33,000 staff, while Indian Overseas Bank employs 26,000 and Bank of Maharashtra has about 13,000 employees, according to estimates from bank unions.

PM Modi’s office initially wanted four banks to be put up for sale in the coming fiscal year, but officials have advised caution fearing resistance from unions representing the employees. The actual privatisation process may take 5-6 months to start, one of the government sources said.

To facilitate the privatisation of public sector banks, the government is likely to bring amendments to two legislations later this year. Amendments would be required in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 for privatisation, sources said.

The government hopes that the Reserve Bank of India, the country’s banking regulator, will soon ease lending restrictions on Indian Overseas Bank after an improvement in the lender’s finances that could help its sale.

“The government should consider what gives it a better pricing without compromising its long-term goal of financing the growing Indian economy,” said Devendra Pant, chief economist at India Ratings, the Indian arm of Fitch ratings agency.

(With Inputs from Reuters)