NITI Aayog has recommended the government to privatise three public sector banks - Punjab & Sind Bank, UCO Bank and Bank of Maharashtra. The other major recommendations to Prime Minister's Office (PMO) and Finance Ministry functionaries include merger of all regional rural banks, introducing flexibility in participation of non-banking financial companies' (NBFCs) participation in the debt market and increasing private debt to GDP ratio from the existing 54 per cent to 100 per cent over coming 10 years, CNBC-TV18 reported citing unidentified sources. The government think-tank NITI Aayog has also pitched for making the Indian data credible, the report added.
Earlier this week, there were reports that the government may merge loss-making entities India Post, along with the regional rural banks (RRBs), into a full-fledged public sector bank to beat down the mounting losses.
India is looking to privatise more than half of its state-owned banks to reduce the number of government-owned lenders to just five as part of an overhaul of the banking industry, according to a recent report by Reuters. The first part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank, leading to an effective privatisation of these state-owned lenders, the global news agency had reported citing an unidentified government official.
Meanwhile, on Wednesday, Prime Minister Narendra Modi held a brainstorming session with banking and financial sector stakeholders and discussed various measures to revive the economy hit hard by the COVID-19 crisis.