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Bill amending public sector banks may allow govt complete exit: Report PSB

Bill amending public sector banks may allow govt complete exit: Report

India Blooms News Service | @indiablooms | 28 Jun 2022, 05:32 pm

New Delhi: The government may table a bill to amend the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 to facilitate the privatisation of state-run banks in the upcoming session of parliament, media reports said.

According to an ET report citing an official aware of the deliberations one of the likely amendments will allow the central government to completely sell off its stake in the banks being privatised.

The Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 requires the central government to hold at least 51 percent of public sector banks.

Earlier, it was thought that the government would retain at least 26 percent stake in such banks, the ET report said.

"The bill will provide an enabling mechanism. We might bring it in this session and then iron out the other issues," said another official according to the report.

The changes were discussed changes are based on discussions with potential investors during recent roadshows for the IDBI Bank stake sale.

The government had listed the Banking Laws Amendment Bill, 2021, in the winter session of Parliament that concluded on December 22, 2021, but it wasn't introduced.

The inputs have been taken from potential investors, merchant bankers, and even industry and changes if required will be incorporated based on them, the report said.

In the budget for FY22 presented on February 1, 2021, finance minister Nirmala Sitharaman said the government will privatise two public sector banks and one general insurer.

The privatisation process of IDBI bank is already underway, and by the end of the next month, the government is expected to invite Expressions of Interest (EOI) for strategic disinvestment of the bank.

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