Privatization Of PSU Banks, Insurance Starts Soon: Bank Of Maharashtra, IOB, Oriental Insurance, United India On The List
Privatization of the PSUs will now be resumed by the Government of India and about four unmerged banks and insurance companies will be privatized in the next part of the project.
The privatization of PSU Banks was postponed in 2020 due to the outbreak of the Coronavirus pandemic, which put the whole process on hold because of their low valuations and mounting stressed assets.
Read on to find out which banks and insurance companies will be privatized right here!
Government To Restart Privatization Of Unmerged Banks And Insurance Companies
As per reports, Punjab & Sind Bank, IOB, Bank of Maharashtra might be privatized, along with state-run insurance companies, such as National Insurance Company, United India Insurance, and Oriental Insurance Company.
Prior to this, the Government had also sold their shares in the Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India, and NEEPCO. The Govt also announced that it will also sell its 30% stake from the state run rail hauler Container Corp of India (Concor).
Recently, the Government of India had also announced economic reforms in wake of the Coronavirus pandemic, wherein it was declared that every PSU in India will be now privatized, except 4 in strategic sectors.
As per reports, a draft cabinet note has already been sent for inter-ministerial consultations to identity strategic and non-strategic sectors.
A government official close to the development said, “A broader policy will look at sectors that have market imperfections due to the government’s presence, where the private sector can take the lead and ensure that the monopoly should not happen due to state-run companies.”
He also said that sectors like banks, insurance, space, defence will be privatized.
Privatization Of IDBI Bank Initiated Already; Government Invests Rs. 12,450 Crore For Financial Health
The Government had put the merger process of insurance companies on hold recently, along with investing Rs 12,450 crore to enhance the financial health.
Additionally, the process of selling the stake for IDBI Bank has also been initiated as the bank will soon be exiting the RBI’s Prompt Corrective Action framework and has reported 13 quarters of net losses in Q4 FY20.
The divestment target for FY21 is Rs. 2.1 lakh crore, which was majorly taken care of by the privatization of BPCL and Concor. The source said, “We are looking to hold virtual roadshows for Shipping Corporation in August. By September, we aim to release the Expression of Interest for Concor.”
The Department of Investment and Public Asset Management (DIPAM) is hoping that global players like Aramco, Petronas would maintain an interest in BPCL after the COVID-19 situation subsides.