No Cabinet Decision On Privatising 2 State-Owned Banks: FM

Finance Minister Nirmala Sitharaman told Parliament on Tuesday that the union cabinet has not taken any decision on the proposed privatisation of two public sector banks (PSBs).

She had announced the proposal of privatising two PSBs during her budget speech for 2021-22.

In a written response to a question in Rajya Sabha on privatisation of two PSBs, the finance minister said, "Consideration of various issues related to disinvestment is entrusted to the Cabinet Committee designated for this purpose. Decision by the Cabinet Committee has not been taken in this regard."

The Banking Laws (Amendment) Bill 2021, which entails privatisation of public sector banks, was listed for introduction and passing in the ongoing Winter session of Parliament, however with the session ending tomorrow (December 22), the move is all set to be delayed.

On November 16, NDTV had exclusively reported that the government may not bring the Banking Laws (Amendment) Bill 2021 during the ongoing Winter session of Parliament, as it plans to have a relook at some key aspects related to the entire exercise before going ahead with the move.

(Also Read: Bill To Privatise 2 State-Owned Banks Unlikely In This Session)

Sources aware of the development had indicated that the current market scenario is not being seen as conducive for bringing the legislation and discussions are likely to be held with the Reserve Bank of India (RBI) before a final decision is taken on it.

The economic impact of Coronavirus pandemic and the rising threat of the Omicron variant are also other important factors which are learnt to have influenced government's thinking.

Also, while the initial thought within the government was to sell two PSBs to private entities by divesting its entire stakes in them, there is a likelihood that government may like to keep 26 per cent share apiece in these banks with itself and sell off the remaining share to different entities, sources in the know had pointed out.