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NITI Aayog recommends privatisation of Central Bank, Indian Overseas Bank

Finance Minister Nirmala Sitharaman, in her Budget speech, had announced privatising two public sector banks (PSBs) and one general insurance company in 2021-22.

NITI Aayog has recommended Central Bank and IOB for disinvestment, while Bank of India may be a potential candidate for sale. NITI Aayog has recommended Central Bank and IOB for disinvestment, while Bank of India may be a potential candidate for sale.

NITI Aayog has recommended divesting government stake in Central Bank of India and Indian Overseas Bank (IOB) as part of the privatisation initiative announced in the Union Budget.

Finance Minister Nirmala Sitharaman, in her Budget speech, had announced privatising two public sector banks (PSBs) and one general insurance company in 2021-22. As per the new PSE (Public Sector Enterprise) policy for 'Aatmanirbhar Bharat', NITI Aayog is entrusted with the task to suggest names of PSUs in strategic sectors to be merged, privatised, or made subsidiaries of other PSUs.

While Central Bank and IOB have been recommended for disinvestment, Bank of India may be a potential candidate for sale, The Times of India reported quoting sources.

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The Department of Investment and Public Asset Management (DIPAM) and Department of Financial Services (DFS) will examine the proposal and discuss legislative changes needed for privatisation of banks.

"The timeline will depend on the legislative changes required," the publication quoted sources as saying. The proposal will also have to be discussed with the Reserve Bank of India.

Finalisation of privatisation and disinvestment of public sector enterprises is a multi-layered process. After a Core Group of Secretaries, headed by the Cabinet Secretary, clears the suggested names, the proposal will go to Alternative Mechanism (AM) for its approval and eventually to the Cabinet headed by the Prime Minister for final nod.

The Centre has set a disinvestment target of Rs 1.75 lakh crore for FY22.

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