At present, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 is in force. According to this, the government’s stake in a public sector bank should be at least 51 percent.
The thinking of the government regarding PSU Banks has changed. The government wants to liquidate its entire stake in these banks. For this he has to amend the law. According to the current law, the government’s stake in public sector banks cannot be less than 51 per cent. The English business news website Economic Times has given this news.
The government can introduce the bill in the monsoon session of Parliament. After its passage, the way will open for the government to liquidate its entire stake in public sector banks. At present, the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 is in force. According to this, the government’s stake in a public sector bank should be at least 51 per cent. This means that the control of the bank must be with the government.
Read Also: New Wage Code may be implemented soon 4 days work – 3 days leave, salary less – PF more, big change is going to happen from 1st July?
The government has already taken a decision to gradually privatize public sector banks. But, it believed that it would maintain at least 26 per cent stake in these banks. Currently, as per SEBI norms, the maximum stake of a promoter in a private bank can be 26 per cent.
The government wanted to introduce the Banking Laws Amendment Bill, 2021 in the winter session of Parliament itself. But due to some reason this bill could not be introduced. In the budget presented in February this year, Finance Minister Nirmala Sitharaman had said that the government will privatize two public sector banks and a general insurance company. He also said that the law will be amended for this.
According to sources, the government has decided to privatize Central Bank of India and Indian Overseas Bank. But, it has not been formally announced yet. The process of privatization of IDBI Bank is already underway. This bank has been formed under the Companies Act, 1956. Therefore, there is no need to amend the law for its privatization.
The government is also trying to make a big bank by merging small public sector banks. Under this, many public sector banks have been merged with big public sector banks. This will also bring down the total number of public sector banks. Syndicate Bank merger with Canara Bank is an example. Similarly, many small public sector banks have been merged with big government banks.
