Finance minister Nirmala Sitaraman announced that under the RBI govt to execute bank privatization.
Sitharaman in the union budget presented last week has declared the privatization of two banks as a feature of its privation plan but Bank associations have restricted the move. However, she declined to comment on any specific details about which candidate will be selected for privatization and said that we will inform you when the government is ready to notify.
“Talking to reporters in financial capital, Sitharaman also declared that the government has no plans to form a bank investment company for the government’s investment in the bank and the government will work with the Reserve Bank for the execution of the bank privatization plan announced in the budget”
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 that has come from the banks itself and will also be led by them
FM said; There is a need for professionalization of banks and that is what govt is trying to do and she also accused banks of‘ non-performing assets’ (debts) that are to be transformed into the National ARC are a gift of mismanagement in the past lead by banks.
She also said that banks are gradually running out of risk, which was determined during the early days of the COVID-19 epidemic.
Finance Minister Nirmala Sitharaman also said that the government has no plan to form any bank investment company to house the government stakes in banks.
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