According to a Top government official, the privatisation of Public Sector Banks (PSB) is unlikely to happen before the 2024 general election. The official added, “Nothing will happen before the 2024 general elections. We don’t have legislation yet for it; without that, privatisation is not possible,”

India currently has 12 public sector banks, including Central Bank of India, Bank of Baroda, Bank of India, State Bank of India, Canara Bank, Indian Bank, Bank of Maharashtra, Indian Overseas Bank, Punjab & Sind Bank, Union Bank of India, Punjab National Bank, and UCO Bank.

Bank privatisation has been on the anvil for successive governments, but the plan hasn’t progressed due to stiff opposition from trade unions.

Finance Minister Nirmala Sitharaman said, while presenting Budget 2021-22, had announced the privatisation of PSB as part of the disinvestment drive to accumulate Rs 1.75 lakh crore.

The Finance Minister added, “Every government takes the decisions at the right time. So, I don’t think anything will happen before the general elections,”.

The Finance Minister said that other than IDBI Bank, the government proposed privatising two public sector banks and one general insurance company in 2021-22.

According to the official, the IDBI bank is different as it is not a public sector bank but a private bank in which the government holds a stake.

Also, bids for IDBI Bank will likely be invited by December as clearance from the RBI is awaited for the strategic sale, from which the government aims to get approximately Rs 16,000 crore this financial year.

Another senior government official added, “From the IDBI Bank strategic sale, the government will get a good amount of Rs 15,000-16,000 crore. The strategic sale should move this year. The government is targeting financial bids by December and to close the deal in the fourth quarter,”.

The government and LIC are selling a 60.72% stake in IDBI Bank.