Privatisation of PSBs: Govt to bring Amendments

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  Privatisation of PSBs: Govt to bring Amendments


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  1. Law change: The government will bring about amendments in the two acts in order to facilitate the privatisation of public sector banks (PSBs). Amendments will be made in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. These two acts had facilitated for the nationalisation of banks in two phases. Now, in order to privatise the PSU Banks, provisions of these acts have to be changed.
  2. Background: The Finance Minister Nirmala Sitharaman had announced about the privatisation of PSBs, while presenting Union Budget 2021-22. The PSBs will be privatised as a disinvestment drive in order to generate Rs 1.75 lakh crore. Three banks including the IDBI banks will be privatised as per the announcement.
  3. Recent merger: The government had also merged 10 public sector banks into four in the year 2020. Thus, the total number of PSBs came down to 12 from 27. Under the plan, the United Bank of India and Oriental Bank of Commerce were merged with the Punjab National Bank (PNB). This made PNB the second largest PSB. The Syndicate Bank was merged with Canara Bank, Allahabad Bank merged with the Indian Bank, Andhra Bank and Corporation Bank merged with the Union Bank of India, etc. Then in 2019, the Vijaya Bank and Dena Bank were merged with the Bank of Baroda. In April 2017, SBI merged five of its associate banks namely, the State Bank of Patiala, State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Travancore and the Bharatiya Mahila Bank.
  4. Opposition: Many are voicing concern over the rampant sale of government stake in public companies. People fear that reservations for various categories in jobs will be impacted, and also overall jobs scenario too. Private corporate power will grow rapidly.
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PT's IAS Academy: Privatisation of PSBs: Govt to bring Amendments
Privatisation of PSBs: Govt to bring Amendments
Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
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