Finance Minister Nirmala Sitharaman announced in the budget that the government is preparing to make 4 public sector banks private. According to three government sources, the Narendra Modi government has shortlisted the names of these banks. The government is selling its stake in these banks to increase its income.
According to Reuters, two government officials, on the condition of anonymity, told that the names of the 4 banks shortlisted were Bank of Maharashtra, Bank of India, Indian Overseas Bank (Indian Overseas Bank ) And Central Bank of India.
The official said that out of the 4 banks selected, two will be privatized in the fiscal year 2021-2022. In the coming years, the government may also sell stakes in some other big banks. However, the finance ministry spokesperson declined to comment on the matter.
The risky decision for the government
Sources said that the process of privatization of banks is expected to start in 5 to 6 months. Privatization of public sector banks is a risky decision for the Modi government as it is a matter of employment of the people. Banks are on a two-day strike against this decision of the Union Government from Monday i.e. today.
The central government fears that there will not be any resistance like the farmer movement in this case, so the government will first privatize the mid-size banks, where the number of working people is less. The government has a large stake in the banking sector, employing thousands of employees. Privatization is politically very risky, as it can pose an employment hazard.
Will not affect customers
Banking experts say that when these banks are private, there will be no significant impact on the amount deposited in the accounts of the customers. When banks are privatized, the banks retain their service as before. Also, the interest rates and facilities of home, personal and auto loans remain the same. Customers get better facilities after privatization.
Bank of Maharashtra can start
The central government is going to privatize small and mid-size PSU banks first as part of a well-thought-out strategy. Let us tell you that around 50,000 employees are employed in Bank of India (BOI) and the number of people working in Central Bank of India is close to 33,000. At the same time, Indian Overseas Bank employs 26,000 employees and Bank of Maharashtra employs 13,000. Because of this, it is expected that the government may first start the process of privatization of Bank of Maharashtra, as the government will face less opposition due to the reduced number of employees.