In the announcement of Union Budget 2021, Finance Minister Nirmala Sitharaman had declared the privatization of two public sector banks and one general insurance company as a major upcoming reform. Recently, she declared that the government will work in tandem with the Reserve Bank of India (RBI) in order to see through the efficient execution of the privatization plan.
As of now, the names of the bank have not been revealed by the government or Finance Minister. “We will let you know when the government is ready to announce,” she said.
Commenting on the Bad Bank or National Asset Reconstruction Company (NARC), Sitharaman added that serious mismanagement by banks in the past has led to the current Non-Performing Asset (NPAs) situation in the country.
While media continued to appreciate the government’s decision, Bank Unions and All India Bank Officers’ Confederation (AIBOC) blatantly opposed the move. In an official statement released by the United Forum of Bank Unions (UFOB), possible strike of bank employees has been hinted at by the associations.
UFOB and AIBOC opposition arises from the root idea of handing over the common man’s money to the private players, who may or may not have hidden interests. This directly questions the safety and security, and ownership of public money.
Rumours about Bank Investment Company (BIC)
“There is no such discussion. I don’t know where it is coming from. At least it is not before me. I am not discussing that,” added Nirmala Sitharaman. Formation of BIC was suggested earlier by the PJ Nayak Committee in its report on ‘Governance of Boards of Banks in India’.
BIC was supposed to be a super holding company with autonomous functioning that can arrange funds for banks without government support.