Government may not introduce Banking Laws (Amendment) Bill 2021 in winter session
The government may not bring the Banking Laws (Amendment) Bill 2021 – which aims to privatize two public sector banks (PSBs) – during the ongoing winter session of Parliament, as it plans to revisit some key aspects related to the entire exercise. is to consider. before proceeding further.
Sources aware of developments have indicated that the current market scenario is not seen as conducive for bringing in the law and it is likely to be discussed with the Reserve Bank of India (RBI) before taking a final decision.
The economic impact of the coronavirus pandemic and the growing threat of the Omicron variant are other important factors that are believed to have influenced the government’s thinking.
The winter session will end on December 23.
Furthermore, while the initial idea within the government was to sell off its entire stake to the two PSBs to private entities, there is a possibility that the government may hold 26 per cent stake in these banks and sell the rest. Is. Shares to various institutions, informed sources said.
Though the proposed law was mentioned in the list of bills that the government aims to bring for introduction and passage during the current winter session, sources said the finance ministry plans to go back to the drawing board and take the RBI’s view. is to be taken. these aspects before proceeding. (Also read: Bill for privatization of 2 public sector banks to come in winter session,
Another major reason behind the postponement of the bill is the massive unrest among lakhs of employees working in public sector banks across the country, who went on a two-day strike from today to protest the government’s decision to privatize two state-owned banks. . (Also read: Employees of public sector banks on two-day strike, services stalled across India,
Sources further said that the current market scenario as well as the opposition of employees of banks and most importantly, the fact that an exercise like privatization of two large PSBs – in which their assets, large employee base as well as Non-Performing Assets (NPAs) – ) – has never been done before and hence more finesse is needed.
Sources further said that the RBI is likely to work out in more detail the logistics required to move thousands of employees of the two state-run banks to potential private buyers and the financial cost required for this.
While Finance Minister Nirmala Sitharaman, in her budget speech for 2021-22, said that two PSBs would be privatized as part of the government’s disinvestment drive to raise Rs 1.75 lakh crore during the financial year, the government has now gone into . Rethinking Mode.
As per the intention of the proposed bill, for the privatization of two public sector banks, amendments to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and 1980 are required, as well as sudden amendments to the Banking Regulation Act. the wanted. 1949.
Meanwhile, banking operations were affected across the country on Thursday as nearly nine lakh employees of public sector banks went on a two-day strike to protest the government’s move to privatize two state-owned banks, unions said.
The customers of PSBs faced difficulties as services like cash withdrawal, check withdrawal and loan sanction were stalled due to non-functionality of bank branches.
Banking operations are also likely to be affected on Friday.
The United Forum of Bank Unions (UFBU) had called for an all-India strike to protest against the government’s decision to privatize two state-owned banks this fiscal.
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