The finance ministry is reportedly going ahead to privatize one or more state-controlled banks to make them stronger.
The Punjab & Sind Bank, Bank of Maharashtra and Indian Overseas Bank, which are currently not part of the existing consolidation plan, are said to be on the radar for this purpose.
According to sources, the main aim behind the plan is to pre-empt future bailouts by using taxpayers’ money.
Niti Aayog has reportedly advised the government to allow “long term private capital” into the banking sector. It has also recommended giving banking licences to a few select industrial houses, with a rider that they will not lend to their group companies.
Last month, Finance Minister Nirmala Sitharaman had announced that the Centre intends to open up all segments of the industry, including strategic sectors, to private capital.
