{"id":19363,"date":"2020-09-03T09:04:59","date_gmt":"2020-09-03T09:04:59","guid":{"rendered":"https:\/\/bengalnewstimes.com\/?p=19363"},"modified":"2020-09-03T09:04:59","modified_gmt":"2020-09-03T09:04:59","slug":"niti-aayog-bats-for-major-bank-consolidation-recommends-selling-of-uco-bom-punjab-and-sind-bank","status":"publish","type":"post","link":"https:\/\/bengalnewstimes.com\/?p=19363","title":{"rendered":"Niti Aayog bats for major bank consolidation, recommends selling of Uco, BoM, Punjab and Sind Bank"},"content":{"rendered":"<p><\/p>\n<div>\n<div class=\"article-image\">\n<figure><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2073266\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-111.jpg\" alt=\"The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden size-full wp-image-2073266\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-111.jpg\" alt=\"The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.\" width=\"660\" height=\"440\" srcset=\"\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-2073266\" src=\"https:\/\/images.financialexpress.com\/2020\/09\/1-111.jpg\" alt=\"The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.\" width=\"660\" height=\"440\" srcset=\"https:\/\/images.financialexpress.com\/2020\/09\/1-111.jpg 660w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/09\/1-111-313x209.jpg 313w\" sizes=\"auto, (max-width: 660px) 100vw, 660px\"\/><\/noscript><\/noscript><span class=\"article-caption\">The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.<\/span><\/figure>\n<\/div>\n<p>As banking is set to be in the list of \u2018strategic sectors\u2019 fit for discretionary privatisation under a new policy being unveiled, the NITI Aayog has prepared a blueprint for the key sector, with consolidation in focus. The think tank has asked the government to retain control over the country\u2019s top four state-run lenders \u2014 <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">State Bank of India<\/a>, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/punjab-national-bank-stock-price\/\" rel=\"noopener noreferrer\">Punjab National Bank<\/a>, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/bank-of-baroda-stock-price\/\" rel=\"noopener noreferrer\">Bank of Baroda<\/a> and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/canara-bank-stock-price\/\" rel=\"noopener noreferrer\">Canara Bank<\/a>, even as it recommended that three small public-sector banks \u2013 Punjab &amp; Sind Bank, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/bank-of-maharashtra-stock-price\/\" rel=\"noopener noreferrer\">Bank of Maharashtra<\/a> and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/uco-bank-stock-price\/\" rel=\"noopener noreferrer\">Uco Bank<\/a> \u2014 be privatised on a priority basis.<\/p>\n<p>The government has stated that a maximum of four state-run players will be allowed in each of the \u2018strategic sectors\u2019, a list of which will soon be placed before the Cabinet for clearance.<\/p>\n<p>As for the remaining five PSBs (Bank of India, Union Bank, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/indian-overseas-bank-stock-price\/\" rel=\"noopener noreferrer\">Indian Overseas Bank<\/a>, Central Bank and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/indian-bank-stock-price\/\" rel=\"noopener noreferrer\">Indian Bank<\/a>), the government may either amalgamate them with the four larger ones it chooses to retain or trim its stake in them over a stipulated time-frame to 26%, before exiting fully, according to the NITI Aayog proposal.<\/p>\n<p>\u201cPSBs may need massive capital infusion once the validity of various regulatory relaxations (the repayment moratorium was over on August 31 and the restructuring of loans is being considered for up to two years) are over,\u201d a source said, highlighting the urgency to privatise most of the PSBs. Privatisation of weak PSBs will save the government the need to infuse capital year after year to keep them afloat.<\/p>\n<p>However, the government will likely have to work out a medium-term plan for the privatisation of PSBs to garner maximum from the sale. Currently, most of the PSB stocks are beaten down and reflect only a fraction of the value they commanded a few years ago.<\/p>\n<p>Between FY15 and FY20, the Centre had to infuse as much as Rs 3.2 lakh crore to shore up the capital base of the bad loan-saddled PSBs. Still, their market capitalisation has eroded steadily and substantially in recent years even before the Covid-19 pandemic hit them.<\/p>\n<p>Sources said for privatising the banks, the government will have to repeal the bank nationalisation Act \u2013 the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970. Given the <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/tag\/bharatiya-janata-party\/\" rel=\"noopener noreferrer\">BJP<\/a>-led NDA\u2019s clout in both the Houses of Parliament, legislative hurdles for any such move seem unlikely.<\/p>\n<p>Former prime minister Indira Gandhi had nationalised 14 private banks in 1970, followed by another six banks in 1980. The Modi-government is trying to unshackle the hold of the public sector by encouraging private players to acquire government assets. Recently, it repealed the law governing <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/bharat-petroleum-corporation-ltd-stock-price\/\" rel=\"noopener noreferrer\">BPCL<\/a> to pave the way for its privatisation (sale process is on). It also plans to amend the Coal Bearing Act to allow commercial coal mining by private firms.<\/p>\n<p>Already, the NDA government has undertaken a series of consolidation exercises in the public-sector banking space. Therefore, the number of state-run banks has come down from 27 in 2017 to 12 now. The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy.<\/p>\n<p>The government had in August last year announced that <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/oriental-bank-of-commerce-stock-price\/\" rel=\"noopener noreferrer\">Oriental Bank of Commerce<\/a> and United Bank will be merged into Punjab National Bank to create the country\u2019s largest state-run bank after <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">SBI<\/a>, with a total business of close to `18 lakh crore. Similarly, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/syndicate-bank-stock-price\/\" rel=\"noopener noreferrer\">Syndicate Bank<\/a> is amalgamated with Canara Bank, and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/andhra-bank-stock-price\/\" rel=\"noopener noreferrer\">Andhra Bank<\/a> and <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/corporation-bank-stock-price\/\" rel=\"noopener noreferrer\">Corporation Bank<\/a> will be merged into Union Bank. Also, <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/allahabad-bank-stock-price\/\" rel=\"noopener noreferrer\">Allahabad Bank<\/a> will be amalgamated with Indian Bank. Each of the amalgamated entity, created in April, has a business of over Rs 8 lakh crore.<\/p>\n<div class=\"common-bottom-text\">\n<p>Get live <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Stock Prices<\/a> from <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/s-p-bse-sensex-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">BSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nifty-50-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">NSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/investing-abroad\/\" target=\"_blank\" rel=\"noopener noreferrer\">US Market<\/a> and latest NAV, portfolio of <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds<\/a>, calculate your tax by <a href=\"https:\/\/www.financialexpress.com\/income-tax-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax Calculator<\/a>, know market\u2019s <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-gainers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Gainers<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-losers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Losers<\/a> &amp; <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/equity-funds\/\" target=\"_blank\" rel=\"noopener noreferrer\">Best Equity Funds<\/a>. Like us on <a href=\"https:\/\/www.facebook.com\/thefinancialexpress\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a> and follow us on <a href=\"https:\/\/twitter.com\/FinancialXpress\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a>.<\/p>\n<p class=\"telegram-text\"><img loading=\"lazy\" decoding=\"async\" class=\"telegrma_img\" src=\"https:\/\/images.financialexpress.com\/2020\/04\/telegram.png\" alt=\"\" width=\"24\" height=\"24\" style=\"margin: 0px 5px 4px 0px; float: left;\"\/>Financial Express is now on Telegram. <a href=\"https:\/\/t.me\/TheFinancialExpressOnline\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to join our channel<\/a> and stay updated with the latest Biz news and updates.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><a href=\\\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/niti-aayog-bats-for-big-bank-consolidation-recommends-selling-of-uco-bom-punjab-and-sind-bank\/2073263\/\\\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The idea was to create only a few but strong banks to support the rising credit appetite of the economy, help reverse a slide in economic growth and cut costs through greater synergy. As banking is set to be in the list of \u2018strategic sectors\u2019 fit for discretionary privatisation under [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":19364,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-19363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-business"],"jetpack_featured_media_url":"https:\/\/bengalnewstimes.com\/wp-content\/uploads\/2020\/09\/1-111.jpg","_links":{"self":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/19363","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19363"}],"version-history":[{"count":0,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/19363\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/media\/19364"}],"wp:attachment":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19363"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19363"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19363"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}