Privatization of banks, there will be only four state-owned banks in the country

New Delhi, September 3, 2020, Thursday

The Modi government may soon move towards privatization in the country's banking sector as well.

The policy commission has also prepared a blueprint for this. The commission has advised the central government to keep only four state-owned banks in the country. These four banks include State Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank. The other three smaller state-owned banks, Punjab and Sind Bank, Bank of Maharashtra and UCO Bank, have been suggested to be privatized, while other state-owned banks, Bank of India, Union Bank, Indian Overseas Bank, Central Bank and Indian Bank, will be merged into four state-owned banks. The government will reduce its stake to 26 per cent.

Some time ago, the central government had decided on strategic and non-strategic sectors for privatization. As the banking sector falls into the strategic sector, only four government institutions can be sanctioned. In these circumstances, the government will keep only four banks. According to government sources, the banks will need a large amount of capital. In these circumstances, the privatization of state-owned banks will be a relief to the government, as the government will have to invest in these banks every year.

From 2015 to 2020, the government has invested Rs 3.2 lakh crore in banks plagued by bad loans. Even then, the bank's market capitalization crisis persists and the crisis has been exacerbated by the Corona.

For the privatization of banks, the Modi government can repeal the Nationalization of Banks Act, 1970. It will not be difficult for the government to do so as it has the strength to pass the bill in both the Houses of Parliament.