A high-level panel led by the cabinet secretary recently met to iron out numerous regulatory and administrative concerns so that the plan could be submitted to the group of ministers on disinvestment or the Alternative Mechanism (AM) for approval. According to reports, the NITI Aayog has proposed a few of bank names for privatisation to the Core Group of Secretaries on Disinvestment chaired by Cabinet Secretary in April, in response to a declaration made by Finance Minister Nirmala Sitharaman in her 2021 budget address.
As per sources, the high-level group met on Thursday, June 24, to discuss the NITI Aayog’s suggestion, and after tying up any loose ends, the panel will give the names of the shortlisted PSU banks to AM for consideration.
The panel is chaired by the cabinet secretary and includes secretaries from the departments of Economic Affairs, Revenue, Expenditure, Corporate Affairs, and Legal Affairs, as well as the secretary of administrative affairs. The secretary of the Department of Public Enterprises, Department of Investment and Public Asset Management (DIPAM) is also a member of the panel.
According to reports, the group also looked at concerns concerning the protection of workers’ interests in banks that are expected to be privatised. Following approval from the AM, it will be forwarded to the Union Cabinet, which is led by the Prime Minister, for ultimate approval. Following cabinet approval, regulatory changes to assist privatisation would begin. Central Bank of India and Indian Overseas Bank are said to be potential privatisation candidates.
During the current fiscal year, the government has earmarked Rs 1.75 lakh crore for share sales in public sector enterprises and financial institutions, including two PSU banks and one insurance company. The sum is less than the Rs 2.10 lakh crore earmarked for CPSE disinvestment in the previous year.
Sitharaman said in her Budget Speech on February 1 that the government intends to privatise two public sector banks (PSBs) and one general insurance business in 2021-22.
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