Niti Aayog recommends privatisation of 3 PSU banks to the PMO and Finance Ministry

Government's think tank NITI Aayog has recommended the privatisation of Punjab & Sind Bank, UCO Bank and Bank of Maharashtra, sources reported on Saturday. According to sources, NITI Aayog put forward this proposition in a presentation to Prime Minister's Office (PMO) and the Union Finance Ministry functionaries recently. 

Last year, the Government had announced the merger of 10 Public sector banks into 4 big PSBs. During the announcement, the Ministry had categorically stated that Indian Overseas Bank, Bank of Maharashtra, UCO Bank, Punjab & Sind Bank would continue to function as usual.  However, the latest suggestion by Niti Aayog has recommended the privatisation of these regional rural banks.

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4 big PSU bank mergers

Earlier last year, Finance Minister Nirmala Sitharaman had announced the merger of 10 public sector banks into 4 big banks. The Finance Minister observed that after the merger concluded, only 12 public sector banks remained and that, the 4 new banks would garner about 82% of the total public sector banking business in India. 

The four big PSU bank mergers announced were - Punjab National Bank, Oriental Bank Of Commerce and United Bank of India, Canara Bank and Syndicate Bank, Indian Bank and  Allahabad Bank and  Union Bank, Andhra Bank and Corporation Bank. The government had also announced a capital infusion into the state-run banks including Indian Overseas Bank, UCO Bank and Punjab & Sind Bank along with other reforms including the recapitalization plans for banks worth Rs 70,000 crores.

Earlier this week, PM Modi had held a meeting with top bankers and heads of NBFCs in a brainstorming session to deliberate on the future roadmap for the economy. There have been a number of measures announced for both banks and NBFCs under the five-tranches of the Rs 20 lakh stimulus package announced by the Finance Ministry in May for the revival of the economy amidst the COVID pandemic. 

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