News - Privatization of Banks?

 Privatization of Banks

The Union Budget 2020-2021 included the privatization of at least 2 Public Sector Banks(PSB). In 2019 the government sold its stake in IDBI Bank to LIC. Also, lead a massive task of the consolidation exercise merging 10 PSBs into 4. This process of consolidation is still going on so including them in the privatization plan will disrupt them so for now they are excluded from this process. A government official confirmed this with a statement "PSBs that were part of the consolidation process have been kept out."

In the process of privatization, the government needs to look after all the aspects before taking the decision of privatization of a PSB. The government needs to see the number of employees, political pressure, pressure from unions, and facts. Some sources say the Bank of Maharashtra will be privatized as it has a small number of employees and so it will be easy for the government. Privatization of banks like the State Bank of India or Panjab National Bank can be difficult for the government. It may be sure SBI will be not privatized as it helps the government to develop rural credit facilities and other development schemes. 

Here is the data showing governments stake in Public Sector Banks

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