Recently Government of India will bring about amendments in the two acts in order to facilitate the privatisation of public sector banks.
Points To Note
- The new amendments will be made in the Banking Companies (Acquisition and Transfer of Undertakings) Act of 1970 and Banking Companies (Acquisition and Transfer of Undertakings) Act of 1980.
- These acts had facilitated for the nationalisation of banks in two phases.
- Now, in order to privatise the public sector banks , provisions of these acts have to be changed.
- Union Finance Minister, Nirmala Sitharaman, had announced about the privatisation of public sector banks, while presenting the Union Budget for FY 2021-22.
- The public sector banks will be privatised as a disinvestment drive in order to generate Rupees 1.75 lakh crore.
- Three banks including the IDBI banks will be privatised as per the announcement.
Recent Merger of the Banks
- The government of India had also merged ten public sector banks into 4 last year. Thus, the total number of public sector banks came down to 12 from 27.
- Under the merger plan, the United Bank of India and Oriental Bank of Commerce were merged with the Punjab National Bank. This made PNB the second largest public sector banks.
- Further, the Syndicate Bank was merged with Canara Bank.
- The Allahabad Bank was merged under the Indian Bank.
- The Andhra Bank and the Corporation Bank were merged with the Union Bank of India.
- In 2019, the Vijaya Bank and Dena Bank were merged with the Bank of Baroda (BOB).
- By April 2017, State Bank of India had merged five of its associate banks namely, the State Bank of Patiala (SBP), State Bank of Hyderabad, State Bank of Mysore, State Bank of Bikaner (SBB) and Jaipur, State Bank of Travancore (SBT) and the Bharatiya Mahila Bank (BMB).
Banking Companies (Acquisition and transfer of undertakings) Act of 1970
The 1970’s act deals with the merger of banks. It provides for the acquisition and transfer of undertakings of certain banks with respect to their size, coverage, resources, and organization so as to control heights of the economy.
Privatisation of PSBs Govt to bring Amendments to Two Acts Privatisation of PSBs Govt to bring Amendments to Two Acts