Shares of public sector banks (PSBs) were on a roll in Friday's session after a Buisness Standard report said senior officials of the Niti Aayog, the Reserve Bank of India (RBI), and the finance ministry’s financial services and economic affairs departments are set to meet on April 14 (Wednesday) to discuss the potential candidates for privatisation.
"Four to five PSBs have been suggested by the Niti Aayog and they will be discussed in the meeting... The names could include Bank of Maharashtra and Indian Overseas Bank. Apart from banks, state-owned general insurance companies may also be taken up for discussion," the report said.
Other PSB stocks, including Punjab and Sind Bank, Bank of Baroda, Indian Bank, UCO Bank, and J&K Bank gained between 7.5 per cent and 12 per cent on the NSE while Canara Bank, Bank of Baroda, PNB, Union Bank of India, and State Bank of India (SBI) rallied up to 3 per cent. In comparison, the Nifty PSU Bank index rose 4.7 per cent in the intra0day trade while the Nifty50 index added 0.2 per cent.
The Aayog is learnt to have prepared a report on PSBs based on their financials, debt and other issues, and accordingly short-listed them, the report said. "The government may pump in some liquidity in those banks that are currently under the RBI’s prompt corrective action framework, and may consider them for either privatisation or merger once they are out of it," it added. READ FULL REPORT HERE
In her Budget speech, Finance Minister Nirmala Sitharaman had announced privatising two public sector banks and one general insurance company in 2021-22.
According to the new Public Sector Enterprise policy for Aatmanirbhar Bharat, the Aayog is mandated to recommend the names of PSUs in strategic sectors to be privatised, merged, or made subsidiaries of other PSUs.