Finance Minister Nirmala Sitharaman on Sunday said the government will work with the Reserve Bank of India (RBI) for execution of the bank privatisation plan announced in the Union Budget 2021. The FM, however, did not reveal the name of banks chosen for privatisation.
Speaking to reporters in Mumbai, Sitharaman also said that the government has no plan to form any bank investment company to house the government stakes in banks.
When asked about the disinvestment proposal, the FM said, "The details are being worked out. I have made the announcement but we are working together with the RBI."
"We will let you know when the government is ready to announce," she said when asked about the details.
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Sitharaman, in her Union Budget speech on February 1, had proposed privatisation of two banks as part of its disinvestment plan. Bank unions have opposed the move.
On the bad bank, the FM said the government may have to give some guarantee for the National Asset Reconstruction Company (ARC), but stressed that this is a solution which has come from the banks itself and will also be led by them.
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She alleged that the banks' non-performing assets, which are to be transferred into the National ARC, are a legacy of the mismanagement in the past.
Sitharaman said that there is a need for professionalisation of banks and the government is trying to ensure the same. She also added that the banks are gradually getting out of the risk aversion, which had set in during the early days of the COVID-19 pandemic.
With PTI inputs