The government is gearing up to amend the Banking Regulation Act in the monsoon session

MUMBAI: The Center is gearing up to amend the Banking Regulation Act and the Banking Law Act in the monsoon session of the current year to move ahead with the privatization of two public sector banks in the country. The policy commission has suggested the names of Central Bank of India and Indian Overseas Bank for disinvestment. While presenting the budget for the current financial year, the finance minister had proposed privatization of two public sector banks.

The two banks under discussion are the Central Bank of India and the Indian Overseas Bank, which are currently under the Prompt Corrective Action (PCA) framework implemented by the Reserve Bank. Under this framework trade restrictions are applied to the respective bank.

The government plans to raise Rs 1.5 lakh crore in the current financial year through disinvestment of public sector undertakings. In addition to the two banks, the government is expected to raise the amount through the sale of its stake in several ventures, including Air India, LIC, BPCL, Shipping Corporation of India.

However, the disinvestment process has slowed down due to the second wave of corona. Banking workers' unions have been protesting against the privatization of banks, but it remains to be seen what approach employees will take when the government assures them that their interests will be protected.

The central government is moving at a steady pace towards privatization. There are reports that the central government has now decided to privatize two public sector banks, Indian Overseas Bank and Central Bank of India. The government will sell its 51 per cent stake in the two companies in the first phase.

Shares of both the public sector banks plunged 20 per cent today on reports of shortlisting for privatization. Shares of Indian Overseas Bank jumped 20 per cent to Rs 2.50. Shares of the central bank touched a high of Rs 2.50, up 20 per cent. Most banking stocks saw an overall rally today.

For this privatization, the government is expected to amend the Banking Regulation Act, discuss with the RBI and amend some other laws, noting that the Policy Commission had earlier this month recommended the names of Central Bank of India and Indian Overseas Bank for privatization. . The policy commission was tasked with naming two public sector banks and one insurance company for privatization.

Now a question is being discussed everywhere as to what will happen to the employees and customers of these two banks after privatization, although Finance Minister Nirmala Sitharaman clarified on March 16 that customers will continue to get the same facilities, only formal changes. There will be no risk to the jobs of the bankers, their interests including salary and pension and other benefits will be taken into full consideration.