NITI Aayog submits names of PSU banks to be privatised

June 4, 2021

NITI Aayog has submitted names of Public Sector Undertaking (PSU) that will be privatised to Core Group of Secretaries on Disinvestment.

Highlights

All these PSBs will be privatised by Financial Year 2022.
Privatisation is being done as part of government’s disinvestment process to raising funds.

Background

Centre’s aim of privatising two public sector banks and one general insurance company was highlighted during Budget 2021-22. Task of identifying government owned banks and insurance company was given to NITI Aayog.

Who decided these names?

Panel comprising of members from NITI Aayog, economic affairs secretary, expenditure secretary, revenue secretary, legal affairs secretary, corporate affairs secretary, Department of Investment and Public Asset Management (DIPAM) secretary and Department of Public Enterprises secretary.

Alternative Mechanism (AM)

Now, these names will go to Alternative Mechanism (AM) for approval after of Core Group of Secretaries, headed by Cabinet Secretary, gives its approval. After AM, final approval will be taken by Cabinet headed by Prime Minister Narendra Modi.

Public Sector Banks (PSBs) in India

PSBs are major banks, where majority stake (50% and more) is held by Union Ministry of Finance or Ministry of Finance of various State governments. Its shares are listed on stock exchanges. Officers working in PSBs are gazetted officers. Central Government got involved in banking business after nationalization of Imperial Bank of India in 1955. 60% stake was taken by Reserve Bank of India and new bank was named “State Bank of India”.

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