Privatization of Banks | It is learned that Prime Minister Narendra Modi is taking a crucial decision to divert funds into the financial sector. Therefore, it is understood that the Center intends to streamline the delisting process of shares in public sector banks. It is hoped that the laws will be amended accordingly. Approval of the proposal would allow the government to gradually reduce its stake in public sector banks from 51 per cent to 26 per cent. However, the authorities said that the power to appoint owners in the respective banks would remain with the government. Therefore, in 1969, the National Banks Act was amended.
Those are the two banks
The privatization plan of the banks under Central Government scrutiny is being implemented. In the budget proposals for the financial year 2021-22, Union Finance Minister Nirmala Sitharaman has set a target of withdrawing the central government stake in 2 public sector banks and a life insurance company. Accordingly, the Center is preparing to allow foreign direct investment (FDI) along with the delisting of public sector shares in the two banks. Information that the Finance Ministry has prepared a draft for the approval of the Cabinet. It is learned that the list includes Indian Overseas Bank (IOB) and Central Bank of India (CBI).
Privatization is easy if approvals are approved
If these proposals are legislated, the privatization of banks will be facilitated. Even foreign investors say they have not been allowed to buy shares on a large scale without parliamentary approval. It will be easier to identify suitable banks for such privatization. Information that all sectors are proposing that the government should continuously reduce the inflow of funds into public sector banks. The government has a quasi-sovereign status over the banks to provide security for the depositors’ money. The government owns two-thirds of the public sector banks. The respective banks have huge amounts of arrears.
These are just some of the goal setting shareware that you can use
With the RBI’s approval, the parliamentary approval process for the privatization of banks should be expedited. Will be included in the provision accordingly. The government’s stake could be reduced from 51 to 26 percent. Foreign shareholders can buy up to 20% of the shares. For a long time, voting rights for single shareholders were not limited to 10 percent. The privatization of banks is a long-pending issue. In contrast, banking unions have been concerned for decades.
These are the restrictions on FDI in banks
Current laws allow up to 20 per cent foreign direct investment (FDI) in banks. The Center hopes to increase this to 26 per cent to attract investors. In order to do so, it is imperative to comply with the rules. It is learned that an attractive Voluntary Retirement (VRS) scheme is also being prepared to repatriate the staff working in these two banks.