India needs more profitable and robust banks to fully meet the growing demand and privatisation of two state-run lenders is a move in that direction, Minister of State for Finance, Anurag Thakur, told IANS. In a post-Budget exclusive conversation with IANS, Thakur elaborated on the need for public sector banks to become more profitable, as the Centre cannot recapitalise them every year. Notably, banking sector reforms have been a major talking point of Budget 2021- 22, specifically the proposal to privatise two state-run lenders along with a general insurance company.
Till now, the Centre’s intent to privatise two lenders have received a healthy response from the investors and the stock markets. However, the banking unions have opposed the move. When asked about the opposition to the privatisation plan, Thakur said the Centre has strengthened the banks by reducing their NPAs and by taking them out of the prompt corrective action (PCA) norm. He mentioned that around Rs 5.5 lakh crore has been infused into the banks and an amalgamation and merger exercise has also been conducted. According to Thakur, the last divestment experience has shown that both the employees and the company benefit from the exercise. The employees, he said, will benefit from the move via higher pay scale in the future. Besides, he said that the Centre will take all required steps to conduct a healthy divestment process. On the speculation about inclusion of weak banks in the divestment plan, he said that buyers’ perspective should also be looked at before making an offer. IANS
