New Delhi: To facilitate the privatization of two public sector banks (PSBs), the government is all set to launch a banking law Amendment Bill in the upcoming winter session starting from Monday.
Finance Minister Nirmala Sitharaman, while presenting the Budget 2021-22 earlier this year, announced the privatization of public sector banks as part of the disinvestment drive to raise Rs 1.75 lakh crore.
Sources said the Banking Laws (Amendment) Bill, 2021, to be introduced during the session, is expected to bring down the minimum government stake in PSBs from 51 per cent to 26 per cent.
However, sources said a final decision in this regard would be taken by the Union Cabinet when it reviews the proposed law.
According to the list of “Contingent amendments to the Banking Regulation Act, 1949 with reference to the Union Budget Announcement 2021 regarding amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 and privatization of two public sector banks,” winter Legislative business for the session.
Sources said that these Acts led to nationalization of banks in two phases and the provisions of these laws had to be changed for privatization of banks.
In the last session, Parliament passed a bill to allow privatization of state-run general insurance companies.
The General Insurance Business (Nationalisation) Amendment Bill, 2021 removed the requirement of the central government to hold at least 51 per cent equity capital in a specified insurer.
The Act, which came into force in 1972, provided for the acquisition and transfer of shares of Indian insurance companies and other existing insurance companies’ undertakings to better meet the needs of the economy by securing the growth of the general insurance business.
Government think-tank NITI Aayog has already suggested two banks and one insurance company to the Core Group of Secretaries on disinvestment for privatization.
According to sources, Central Bank of India and Indian Overseas Bank are likely candidates for privatization.
As per the procedure, the Core Group of Secretaries, headed by the Cabinet Secretary, will send its recommendation to the Alternative Mechanism (AM) for its approval and eventually to the Cabinet, headed by the Prime Minister, for final approval.
The members of the Core Group of Secretaries include Secretary of Economic Affairs, Secretary of Revenue, Secretary of Expenditure, Secretary of Corporate Affairs, Secretary of Legal Affairs, Secretary of the Department of Public Enterprises, Secretary of the Department of Investment and Public Asset Management (DIPAM) and an Administrative Department. Secretaries included.
Finance Minister Nirmala Sitharaman, while presenting the Budget 2021-22 earlier this year, announced the privatization of public sector banks as part of the disinvestment drive to raise Rs 1.75 lakh crore.
Sources said the Banking Laws (Amendment) Bill, 2021, to be introduced during the session, is expected to bring down the minimum government stake in PSBs from 51 per cent to 26 per cent.
However, sources said a final decision in this regard would be taken by the Union Cabinet when it reviews the proposed law.
According to the list of “Contingent amendments to the Banking Regulation Act, 1949 with reference to the Union Budget Announcement 2021 regarding amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 and privatization of two public sector banks,” winter Legislative business for the session.
Sources said that these Acts led to nationalization of banks in two phases and the provisions of these laws had to be changed for privatization of banks.
In the last session, Parliament passed a bill to allow privatization of state-run general insurance companies.
The General Insurance Business (Nationalisation) Amendment Bill, 2021 removed the requirement of the central government to hold at least 51 per cent equity capital in a specified insurer.
The Act, which came into force in 1972, provided for the acquisition and transfer of shares of Indian insurance companies and other existing insurance companies’ undertakings to better meet the needs of the economy by securing the growth of the general insurance business.
Government think-tank NITI Aayog has already suggested two banks and one insurance company to the Core Group of Secretaries on disinvestment for privatization.
According to sources, Central Bank of India and Indian Overseas Bank are likely candidates for privatization.
As per the procedure, the Core Group of Secretaries, headed by the Cabinet Secretary, will send its recommendation to the Alternative Mechanism (AM) for its approval and eventually to the Cabinet, headed by the Prime Minister, for final approval.
The members of the Core Group of Secretaries include Secretary of Economic Affairs, Secretary of Revenue, Secretary of Expenditure, Secretary of Corporate Affairs, Secretary of Legal Affairs, Secretary of the Department of Public Enterprises, Secretary of the Department of Investment and Public Asset Management (DIPAM) and an Administrative Department. Secretaries included.
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