One of the amendments under consideration is allowing the central government to exit the privatization of banks altogether, said an official familiar with the deliberations. The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 requires the central government to hold at least 51% stake in public sector banks. The earlier thinking was that the Center should retain at least 26 per cent stake during privatization and this can be brought down gradually.
Another official said, “The bill will provide an efficient mechanism. We can bring it in this session and then sort out other issues.”
share sale.
Finance Ministry is also in talks with the Reserve Bank India ,reserve Bank of India), on regulatory, ownership and controlling stake issues related to privatization of the banking sector. Promoters can currently hold a maximum of 26% stake in private banks.
to be introduced in the winter session
The dates for the monsoon session of Parliament have not been announced yet.
The government had listed the Banking Laws Amendment Bill, 2021 in the winter session of Parliament that concluded on December 22, 2021, but it was not introduced. The bill proposed to “amend the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 and the Contingent Amendment to the Banking Regulation Act, 1949”.
The first official cited above said, “We have received inputs from potential investors, merchant bankers and even the industry. We will incorporate changes if necessary to make the stake sale process faster and with fewer regulatory hassles.” ”
In the FY22 budget presented on February 1, 2021, Finance Minister Nirmala Sitharaman had said that the government would privatize two public sector banks and one general insurer.
He had said that necessary legislative amendments would be introduced in the upcoming budget session.
In April 2021, NITI Aayog had given its recommendations to the Department of Disinvestment on the banks that should be privatized. Central
And have reportedly been shortlisted, but the names have not been made public. According to people with knowledge of the matter, there has been no significant progress since then.
The process of privatization of IDBI Bank is already underway. The bank is incorporated under the Companies Act, 1956 and its privatization does not require legal amendment.
Government is expected to invite Expression of Interest (EoI) for strategic disinvestment
It holds 45.48% stake in bank IDBI as of the end of next month, while Life Insurance Corporation of India (LIC) holds 49.24%.