'Modi Mitr-centric drive...': As Centre draws up plan to privatise public sector banks, Rahul Gandhi hits out at PM

FPJ Web DeskUpdated: Monday, June 14, 2021, 02:18 PM IST
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Photo: Rahul Gandhi/Facebook |

Congress leader Rahul Gandhi on Monday fired a fresh salvo at Prime Minister Narendra Modi and the BJP-led government over its ongoing privatisation drive. His remarks come even as the Centre draws up a plan to privatise at least two public sector banks (PSB) this fiscal. Earlier this month, the NITI Aayog had submitted a list of PSU banks that are to be privatised in the current fiscal year. After undergoing multiple rounds of checks, this will eventually make its way to the Cabinet.

"GOI’s ‘Modi Mitr-centric’ privatisation drive won’t help the public. NYAY will," Gandhi tweeted on Monday morning. According to recent reports, Bank of Maharashtra and Central Bank are the top two candidates that has been favoured for privatisation, though the Indian Overseas Bank has also found favour for the exercise either this year or possibly later.

The government had earlier indicated that banks under prompt corrective action (PCA) framework or weaker banks would be kept out of privatisation as it would be difficult to find buyers for them. This would have left three PSBs - Indian Overseas Bank, Central Bank and UCO Bank out of the government's disinvestment plan.

Recently, the government has also decided to front load capitalisation of state-owned banks so that the balance sheets of some of these entities are strengthened ahead of possible sale.

The government think tank was responsible for the selection of the names of two public sector banks and one general insurance company for privatisation, as announced in the Budget 2021 - 2022. The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions. The amount is lower than the record budgeted Rs 2.10 lakh crore to be raised from CPSE disinvestment in the last fiscal.

According to reports from earlier in June, United India Insurance may be the chosen candidate for privatisation among the three general insurers, given its relative better solvency ratio. However, financial sector experts also contend that Oriental Insurance, with the least solvency ratio among the three, may be favoured as it does not have overseas operations and inviting a private investor may be easier for it.

(With inputs from agencies)

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