Privatization of PSU Banks Postponed

NITI Aayog had asked Govt to make several banks private by selling them off to private firms. Now, Govt may not sell these banks to private sector, at least not in this financial year. However, Govt is all set to reduce their stake in some PSU banks, as suggested by the RBI. Govt wants to clearly define strategic and non-strategic sectors, and the disinvestment process hinges on this definition. Once Govt defines a sector as strategic, then a maximum of 4 PSUs will be allowed to operate in that sector, and more and more private companies will be allowed to operate in that sector. Around 23 PSUs are proposed to be sold to private companies, under this plan. Govt has already set a target of Rs 2.1 lakh crore revenue generation via selling stake in PSU banks and companies, but the biggest roadblock which seems as of now, is defining strategic PSUs. Once Govt defines a sector as strategic, then a maximum of 4 PSUs will be allowed to operate in that sector, and more and more private companies will be allowed to operate in that sector.