In June, there were reports that the government has almost cleared the way for the privatization of two banks, the Central Bank of India and the Indian Overseas Bank. In the meeting chaired by the Cabinet Secretary, all the regulatory and administrative issues related to it were discussed.
The government has cleared the way for the privatization of two big public sector banks. There were many talks last month about the privatization of Indian Overseas Bank (IOB) and Central Bank of India on behalf of the government. Now a big step has been taken by the government in this direction. Recently, the Group of Ministers of Alternative Mechanism has held a meeting. Finance Minister Nirmala Sitharaman, Transport Minister Nitin Gadkari, Railway Minister Ashwini Vaishnav and Coal Minister were present in this meeting. It is this group that is responsible for taking the decision regarding the privatization of banks. Experts say that this decision will not affect the customers of banks. His service will continue as before
privatization was announced in the budget by the finance minister
In June, there were reports that the government has almost cleared the way for the privatization of two banks, the Central Bank of India and the Indian Overseas Bank.
In the meeting chaired by the Cabinet Secretary, all the regulatory and administrative issues related to it were discussed. Now it has been presented before the Group of Ministers constituted on Disinvestment or the Group of Ministers of Alternative Mechanism or Alternative Mechanism for its approval. Finance Minister Nirmala Sitharaman had announced the privatization of public sector banks in the budget speech of 2021.
In his budget speech, he had proposed to privatize two public sector banks (PSBs) and a general insurance company in the financial year 2021-22.
“Apart from IDBI Bank, we propose to privatize two public sector banks and one general insurance company in the year 2021-22,” he had said.
After this, NITI Aayog recommended the names of some banks for privatization to the Core Group of Secretaries headed by the Cabinet Secretary in April.
The government had set a target of raising Rs 1.75 lakh crore through disinvestment for the financial year 2021-22. In February this year, there were reports that the central government has shortlisted 4 mid-sized banks for privatization. These include the names of Bank of Maharashtra, Bank of India (BoI), Indian Overseas Bank and Central Bank of India. Two of these four banks will be privatized in the financial year 2021-22.
Bank employees unhappy with the decision of the government
The committee also deliberated on issues related to protection of interests of employees of banks prone to privatization. Once approved by the AM, the matter will be sent to the Union Cabinet headed by the Prime Minister for final approval. After the approval of the cabinet, necessary regulatory changes will be made for privatization. The bank union is opposing the privatization of these two banks. The United Forum of Bank Unions, a grouping of nine bank unions, had announced a nationwide bank strike on March 15 and 16 against the privatization of state-run banks.
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