Bank Privatization is hot topic in the financial world. Recently, Finance Secretary Vivek Joshi has said that government has no plans to merger more banks right now. The privatisation of two banks was announced in 2021. To proceed, the bank nationalisation law needs to be amended, and this matter is currently under government consideration. There have been no statements regarding further mergers of public sector banks (PSBs). Despite media speculation about the merger of five banks, including UCO Bank, Bank of Maharashtra, and Indian Overseas Bank, there is no truth to these claims.
In another update, the Centre has postponed the privatisation of two public sector banks (PSBs), sources reveal. This decision comes as the government reconsiders its approach to merging PSBs in the fiscal year 2025 (FY25). According to sources, the disinvestment pipeline will be shaped by prevailing market conditions.
Earlier on Wednesday, Finance Secretary TV Somanathan stated that the government will avoid pre-announcing its divestment plans for FY25 to ensure the optimal valuation of public companies. The Union Budget, for the second consecutive year, omitted any mention of ‘disinvestment’, highlighting the Modi 3.0 Government’s focus on enhancing the value of Central Public Sector Enterprises (CPSEs) rather than reducing its equity holdings.
Finance Minister Nirmala Sitharaman has set a disinvestment target of Rs 50,000 crore for 2024-25. However, the Interim Budget presented in February revised the disinvestment estimate for 2023-24 down to Rs 30,000 crore. The Interim Budget for FY2025 included a general category named ‘Miscellaneous Capital Receipts’ under capital receipts, which did not specifically mention ‘disinvestment’. This category comprises receipts from managing equity investments and public assets through various mechanisms.
