Big news: Only 4 banks, including SBI, will remain government, Modi government will increase on the path of privatization of these banks

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For privatization of banks, the Modi government can repeal the Banking Companies Act enacted in 1970 for nationalization of banks. It will not be difficult for the government to do so as it is able to pass the bill from both houses of Parliament.




In the banking sector, the government can quickly move forward on the path of privatization. NITI Aayog has also prepared the blueprint for privatization of banks. The commission has suggested the central government to keep control over 4 public sector banks. These banks include State Bank of India, Punjab National Bank, Bank of Baroda and Canara Bank. Apart from this, the Commission has advised to privatize three small public sector banks Punjab and Sindh Bank, Bank of Maharashtra and UCO Bank on priority basis. Other government banks (Bank of India, Union Bank, Indian Overseas Bank, Central Bank and Indian Bank) will either merge with the 4 remaining banks or reduce their stake. The government can limit its stake in these banks to 26%.

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Actually, in the last few days, the central government had fixed strategic and non-strategic sectors for privatization. According to this, banking is also in the strategic sector and only 4 government institutions can be approved in it. In such a situation, it is clear that the government will keep 4 banks with itself. This proposal can be presented before the cabinet soon. Describing the privatization of banks as necessary, a government source said that after the Moratorium implemented till 31 August and then restructuring of loans for 2 years, there is a need to invest large amounts of capital in banks.



The government source said that the privatization of state-run banks with weak economic condition will provide relief to the government as it has to invest capital in those banks year after year. However, the government is preparing a plan to move slowly on privatization so that maximum amount can be obtained. From 2015 to 2020, the central government had invested Rs 3.2 lakh crore in state-run banks in bad loans. Even after this, the market capitalization of these banks has decreased rapidly. This crisis has deepened in the Corona era.

Law made by Indira government in 1970 will be repealed: For the privatization of banks, Modi government can repeal the Act of Banking Companies in 1970 for the purpose of nationalization of banks. It will not be difficult for the government to do so as it is able to pass the bill from both houses of Parliament. Indira Gandhi nationalized 14 private banks in 1970 and once again in 1980, 6 private banks became part of the government sector.



Promotion of privatization in other areas as well: Apart from banks, Modi government is also promoting privatization in other sectors. Apart from privatization of oil marketing company Bharat Petroleum Corporation Limited, the government has also prepared to approve private companies in the field of coal mining. Talking about banking sector, due to mergers and privatizations in the last 3 years, the number of state-run banks has been reduced from 27 to 12, which is now set to be limited to 4.

9 COMMENTS

  1. Now poor people will not enter into banks ….Pvt banks interested in profits not service to poor. You can observe Pvt branches available in cities and towns only not in villages and forest areas…all village branches disappear and no priority sector loans …. Min bal become 10000 around no jandhan no proper economy….more Pvt banks like YES bank,ICICI and other Pvt banks loans to only corporates…..this is the future of banking

    • Please see the other point of view:
      1. 4 banks, easy to control by govt. and no scams in the country.
      2. These four merged banks are having maximum branches all our the country. And they are looking to further increase the services.
      3. If one doesn’t like private bank, better to help govt banks to establish by taking their services.

  2. Banks do well when economy does well.so selling of banks is not a remedy.its just a temporary releif to the govt who is wanting to wash it’s hands.through selling of it’s stake govt will b generating the money it requires for loan write-off or restructuring during coming years.cunning decision.but even then govt will have to bail out banks that will be under stress like yes Bank or idbi.

  3. One must protest this act in the interest of poor people.it is destruction of economy to favour his own ppl. Private banks are not former’s choice. villagers and poor people will suffer a lot.God save India

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