Bank Privatisation Plan: Modi Govt To Work With RBI For Execution

“I have made the announcement but we are working together with the RBI,” Sitharaman said, adding the ruling dispensation has no plan to form any bank investment company to house the government stakes in banks.

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Prime Minister Narendra Modi-led government will work with the Reserve Bank of India (RBI) for execution of the bank privatisation plan announced in the Union Budget 2021-22 by Finance Minister Nirmala Sitharaman.

Throwing light on the same, Sitharaman told the media in Mumbai the “details are being worked out”. 

“I have made the announcement but we are working together with the RBI,” Sitharaman said, adding the ruling dispensation has no plan to form any bank investment company to house the government stakes in banks.

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“We will let you know when the government is ready to announce,” PTI quoted Sitharaman as saying when asked about the details.

The Finance Minister while commenting on the bad bank said the government may have to give some guarantee for the National Asset Reconstruction Company (ARC) but emphasized this is a solution from the banks itself and will also be led by them.

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Sitharaman further said there is a need for professionalisation of banks, adding the government is trying to ensure the same.

She informed the banks are gradually getting out of the risk aversion, which had set in during the early days of the pandemic.

Commenting on the issue of fuel prices and inflation because of the duties, Sitharaman said states will increase their taxes to keep the prices at the same level and also earn some revenues if the Central Government lowers excise.