Bank privatisation off the table as general elections loom

The centre has no plans to pursue divestment of public sector enterprise in the run-up to the next general election in April-May 2024.

"We are focused on completing the ones in the pipeline and will not pursue the privatisation of any new public sector entities," a Finance Ministry official told Business Today TV.

Plans for the privatisation of two public sector banks have also been put on the backburner. "Everything will be taken up at the right time," the official added.

It was in 2021, post-budget, that Niti Aayog recommended the privatisation of two state-run banks to the disinvestment department.

However, the Department of Investment and Public Asset Management (DIPAM) is keen to complete transactions pertaining to IDBI Bank in the current fiscal year ending March 31, 2024. The government is hopeful that financial bids would be sought in September this year. "The bid process should be launched within the next few months,” the official added.

The Reserve Bank of India (RBI) will undertake a "fit-and-proper assessment" of the bidders, while the Ministry of Home Affairs will undertake their security vetting, before the financial bids are invited. 

The centre has received multiple offers of interest from domestic and foreign investors for the 60.72 per cent stake that is proposed to be divested in IDBI Bank, implying transfer of majority ownership and management control. The stake sale comprises 30.48 per cent government holding and 30.24 per cent owned by the Life Insurance Corporation of India.