Government and Reserve Bank of India Cooperate to Privatize Banks

 Union Finance Minister Nirmala Sitharaman addressed business leaders, chartered accountants and tax professionals in Mumbai that the central government will work with the Reserve Bank of India (RBI) to implement the bank privatization plan.

Highlights:

♦ The minister further stated that the centre has not yet planned to establish any bank investment company to accommodate the government's bank assets.

♦ The Finance Minister recently announced the privatization of two banks when introducing the 2021 Union budget.

♦ The announcement was made in accordance with the Center’s disinvestment plan. But the bank union opposed the plan.

♦ The central government is planning to privatize more than half of state-owned banks. The government is planning to reduce the number of government-owned lenders to five. 

♦ Currently, India has 12 state-owned banks. In 2019, the government also merged ten state-owned banks into four large banks.