Government has hinted that the Public Sector Bank Employees, which is going to be privatized may be absorbed in to other banks. She told that the interests of employees will also be considered and they could be offered the option to shift to another PSB before privatization.
Sitharaman told ET that the interests of all sections including workers would be safeguarded. “We obviously have to negotiate with those bidders to see that the workers’ interests are safeguarded, not just for today but also if the commitment is to ensure that their pensions will be paid, it will be definitely something which I will have to keep in mind… We will have to talk with everybody,” she had said.
Additionally, the safety of the pension will also be decided by the bidder.
The government is likely to consider only banks that were not part of the recent consolidation, which would exclude Punjab National Bank, Bank of Baroda, Canara Bank and State Bank of India from the privatization process.
The government could hive off the non-performing loans of the two public sector banks that are to be selected for privatization and transfer some of their employees to other state-run lenders in a bid to make them attractive for buyers.
The government is likely to consider only banks that were not part of the recent consolidation, which would exclude Punjab National Bank, Bank of Baroda, Canara Bank and State Bank of India from the privatization process. “We could clean up the balance sheet and then offer the bank for sale, if it would get better valuations… All options are open,” a senior government official said.
The finance ministry is likely to hold discussions with Niti Aayog over the next 10 days to identify the candidates for privatisation. The government will then begin the groundwork for the process, which will include legal changes and discussions with the Reserve Bank of India on the criteria for potential buyers.
An RBI working group had suggested in November that large corporate houses should be allowed to own banks by amending the Banking Regulation Act.
Also Read – PSB Mergers & Privatization – Good or Bad
Of the 12 PSBS, Indian Overseas Bank, Central Bank of India and UCO Bank are under the RBI’s Prompt Corrective Action framework, a set of guidelines for lenders that become undercapitalized due to poor asset quality or turned vulnerable due to loss of profitability.
