Niti Aayog has submitted to the core group of secretaries on disinvestment, its final list of PSU banks to be privatised in the current fiscal, as part of the disinvestment process, said a senior government official. The thinktank was entrusted with selecting names of two PSU banks and one general insurance company for privatisation in Budget 2021-22.

“We have submitted the names (of PSU banks) to the core group of secretaries on disinvestment,” the official said. The other members of the high-level panel are the economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, public enterprises secretary, investment and public asset management secretary and administrative department secretary.

After the core group of secretaries, headed by the Cabinet secretary, gives clearance, the names will go to Alternative Mechanism (AM) for its approval and eventually to the Cabinet, headed by the Prime Minister, for the final nod. Regulatory changes to facilitate privatisation would start after the Cabinet approval.

Finance Minister Nirmala Sitharaman had recently said, “Interests of workers of banks which are likely to be privatised will be absolutely protected. Whether it concerns their salaries, scale or pension — all will be taken care of.” Explaining the rationale behind the privatisation, Sitharaman had said Indian banks needed to be bigger, just like the State Bank of India (SBI).

“We need banks which are can scale up... We want banks that are going to be able to meet the aspirational needs of this country,” Sitharaman had said, adding that a lot of thought had gone behind the intention to privatise some PSU banks.

The government has budgeted Rs 1.75 lakh crore from the sale of stakes in public sector companies and financial institutions, including two PSU banks and an insurance company, during the current financial year. The amount is lower than the record budgeted Rs 2.10 lakh crore expected to be raised from the disinvestment of Central Public Sector Enterprises in the last fiscal.