December 9, 2021

The World Live Breaking News Coverage & Updates IN ENGLISH

The World Live Breaking News Coverage & Updates IN ENGLISH

No exception from ownership norms for PSBs on selloff list

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, No exception from ownership norms for PSBs on selloff list, The World Live Breaking News Coverage & Updates IN ENGLISH
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, No exception from ownership norms for PSBs on selloff list, The World Live Breaking News Coverage & Updates IN ENGLISH
, No exception from ownership norms for PSBs on selloff list, The World Live Breaking News Coverage & Updates IN ENGLISH

NEW DELHI: The Reserve Bank of India (RBI) is unlikely to make an exception for ownership changes to privatise state-run banks. Instead, it will issue comprehensive guidelines that will also deal with corporate ownership of Indian lenders.
Sources told TOI that the RBI will soon start the process of new norms, but it is yet to take a decision on allowing corporate houses into the banking business amid sharp divisions on the issue.
The current norms do not allow corporate houses to enter the arena, although several large business houses such as the Birlas and the Tatas have a large financial services presence and may be interested in either acquiring a stake or setting up a bank in future. An internal working group set up by the RBI had submitted a new licensing policy for banks several months ago but the regulator is yet to take a call on the issue, given that it has received multiple inputs from stakeholders and it has been caught up with combating the impact of Covid on the economy.
The Centre and the RBI have agreed on the legislative amendments that may be required to pave the way for privatisation of banks, for which three candidates have been identified.
First off the block is expected to be IDBI Bank, whose name has been made public, with Indian Overseas Bank and Central Bank of India the other candidates in the pipeline, which have been shortlisted by the Niti Aayog with the final decision to be taken by a core group of secretaries. IDBI Bank was on the sell-off list for the current financial year along with a state-run insurance company and two public sector banks. But all the four transactions are not possible until the next financial year.
The law to allow for privatisation of a general insurer has been cleared by Parliament but Dipam is yet to make much headway. And, in the absence of a road map for shareholding in banks, the IDBI Bank sale is not expected anytime soon as bidders would want to know the eligibility conditions and how much they can buy and how they need to dilute.

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