Why small public sector banks are on the divestment radar
- The five smallest of the 12 state-owned banks are less strategically important to the government and have been improving their financial performance.
In her 2021 Budget speech, finance minister Nirmala Sitharaman said the government would privatize two public sector banks. News reports have suggested that these could be from among the following five: Central Bank of India, Indian Overseas Bank, Bank of Maharashtra, UCO Bank, and Punjab and Sind Bank. Divestment of these relatively small banks may not draw strong protests and their good growth and profitability metrics make them attractive to buyers. But gaps remain. The government is setting up a panel to identify the banks for divestment, The Economic Times reported recently.