FM Nirmala Sitharaman lauded the government efforts of privatizing the few Public Sector Banks. As per Bloomberg, She said that the Prime Minister Narendra Modi’s government will go ahead with privatizing a couple of state-run banks that have received cabinet approval, without elaborating.
“We shall look forward to having more interest in private-sector banking that sends a message that in fact we are open for a healthy banking system,” she said to Bloomberg.
She also lauded the Reserve Bank of India’s efforts in steering the bailout of Lakshmi Vilas Bank Ltd. by allowing a local unit of Singapore’s DBS Group Holdings Ltd. to buy the failed lender.
“That only sends the right message that Indian banking sector is being opened up,” FM Sitharaman said in a Bloomberg Television interview.
Reason given by the FM was little vague – Lakshmi Vilas is one of two banks to be rescued this year as the nation’s financial industry reels from one disaster to the next. A shadow banking crisis in 2018 and now the pandemic-fueled recession have hurt banks’ asset quality and capital, hampering their ability to lend. No discussion on reason for NPAs.