New Delhi, July 21: The Centre is likely to reduce the number of government-owned or PSU banks to just five as part of an overhaul of the banking industry, according to a report by Reuters. In order to achieve this, the government would privatise more than half of its state-owned banks by selling its stakes. Currently, there are 12 state-owned banks in India. "The idea is to have 4-5 government-owned banks," a senior government official was quoted as saying. Coal India Disinvestment News is False, No Decision Taken on Selling Govt Stake: Union Minister Pralhad Joshi.

To reduce the number of PSU banks in the country, the government might sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank. A proposal in this regard will be laid before the Union Cabinet for approval. The proposal would be based on recommendations of several government committees and the Reserve Bank of India (RBI) that India should have not more than five state-owned banks. Modi Government Begins Process of Privatisation of 150 trains and 50 Railway Stations Across India, Says Report.

Last year, the government had merged ten state-owned banks into four. According to a senior official at a state-owned bank, quoted in the report, the government will have to divest stakes as it has announced that there will be no more mergers (between state-owned banks). "Now we are thinking of selling the unmerged banks to private players," the government official said.

There has been no official confirmation regarding this from the Ministry of Finance. The government is working on a privatisation plan to help to raise money by selling assets in non-core companies and sectors as the economic growth is severely hit by the coronavirus pandemic.

(The above story first appeared on LatestLY on Jul 21, 2020 11:22 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website