In order to overhaul its banking industry, India is looking to privatise more than half of its state-owned banks, and reduce their numbers to just five.
First part of the plan would be to sell majority stakes in Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank, leading to an effective privatisation of these state-owned lenders, a government official said.
“The idea is to have 4-5 government owned banks,” said one senior government official. At present, India has 12 state-owned banks.
Several government committees and the Reserve Bank of India have recommended that India should have not more than five state-owned banks.
“The government has already ruled out any more mergers so the only option for them is to divest stakes,” a senior official at a state-owned bank said.
