The central government will privatize the Central Bank of India (CBI) and Indian Overseas Bank (IOB) this fiscal as public sector companies continue to sell. The Union Cabinet will soon approve the recommendation of the Secretary level committee. The central government will sell 51 per cent stake in two banks. The Banking Control Act will be amended accordingly. In the budget, Finance Minister Nirmala Sitharaman had announced that the government would raise Rs 1.75 lakh crore through the sale of public sector shares and privatize two public sector banks this year. Shares of Air India, BPCL and Shipping Corporation will also be traded.
Self Retirement Scheme (VRS) for CBI and IOB employees will also be implemented. Mumbai-based CBI has 33,481 employees; More than 26,000 at the Chennai-based IOB. The IOB, established in 1937, and the CBI, formed in 1911, were nationalized in 1969. IOB has about 3400 branches in the country and six abroad. IOB, which has assets worth Rs 2.61 lakh crore, has a policy of focusing on rural areas.
The total assets of the CBI are over Rs 3.56 lakh crore. There are 4651 branches in 28 states. Both the banks are selling, citing rising credit and operating losses. But it is the policies of the central government that are responsible for the increase in bad debts. Losses are small compared to assets.
Earlier, IDBI Bank had decided to sell its stake in LIC to the private sector.
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