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LATEST AUTHENTIC NEWS ON BANK PRIVATIZATION
DISINVESTMENT IN IDBI BANK BY GOVERNMENT AND LIC :
DUEDATES EXTENDED
Dated 15.12.2022 : The Preliminary Information Memorandum (PIM) for inviting Expression of Interest (EoI) for the Strategic Disinvestment of a stake aggregating to 60.72% of IDBI Bank Limited by Government of India and Life Insurance Corporation of India along with transfer of management control was issued on October 7, 2022.
Now Timelines are extended as follows :
1. Last date and time for submission of Expression of interest is extended to 7th, January 2023 from the existing 16.12.2022 .
2.Last Date and time of submission of physical copies of EoIs (for IPs submitting EoIs electronically) is extended to 14th , January 2023 from the existing 23.12.2022
DUEDATES EXTENDED
Dated 15.12.2022 : The Preliminary Information Memorandum (PIM) for inviting Expression of Interest (EoI) for the Strategic Disinvestment of a stake aggregating to 60.72% of IDBI Bank Limited by Government of India and Life Insurance Corporation of India along with transfer of management control was issued on October 7, 2022.
Now Timelines are extended as follows :
1. Last date and time for submission of Expression of interest is extended to 7th, January 2023 from the existing 16.12.2022 .
2.Last Date and time of submission of physical copies of EoIs (for IPs submitting EoIs electronically) is extended to 14th , January 2023 from the existing 23.12.2022

DISINVESTMENT IN IDBI BANK BY GOVERNMENT AND LIC :
PROCESS KICKSTARTS BY ISSUE OF PIM
DIRECT SALE TO SUCCESSFUL BIDDER
Dated 09.10.2022 : As a first step towards disinvestment of shares held by the Government of India ( GOI ) and Life Insurance Corporation of India ( LIC ) , Department of Investment and public Asset Management , Ministry of Finance has floated had called tenders in July 2021 for appointing Transaction Advisors & Legal Advisors separately . Consequently, the GoI acting through DIPAM has engaged KPMG India Private Limited as the Transaction Advisor (“TA”) and Link Legal as the Legal Advisors (“LA”) for providing advisory services and managing the Transaction. It is envisaged that strategic acquirer/investor will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank.
The Department DIAPM had received mandate from CCEA ( Cabinet Committee on economic Affairs ) to off-load up to 100% stake of GoI and LIC along with transfer of management control. It is clarified that LIC’s stake will be sold along with GoI’s shareholding in thistransaction.
Reserve Bank of India has already classified the bank as a private sector bank in view of less than 50 % holding by GOI even though LIC holds 49.24% (c. 529.41 crore shares) while the GoI holds 45.48% (c. 488.99 crore shares) in IDBI Bank as on March 31, 2022.
ABOUT IDBI BANK : IDBI Bank operates as a full-service universal bank serving customers from all the segments. IDBI Bank serves its customers through its wide physical network of 1,884 domestic branches, one overseas branch at Dubai International Financial Centre (“DIFC”), Dubai and one International Financial Services Centre (“IFSC”) Banking Unit (“IBU”) at Gujarat International Finance Tec–City (“GIFT”), Gandhinagar. The IDBI Bank’s physical network also comprised 3,400 ATMs as on March 31, 2022.
BANK DEPOSITS : Total deposits of IDBI Bank stood at c. INR 233, 133 Crore as on March 31, 2022. Retail Deposits, Savings Account Deposits, Current Account Deposits, Bulk Deposits accounted for 38% , 37% , 20% , and 5 % of aggregate deposits respectively.
ADVANCES :Global Gross Advances stood at c. INR 169,207 lac crore on March 31, 2022. Retail portfolio amounted to 63% of Global Gross Advances while the remaining 37% is apportioned to the Corporate Portfolio
BANK HISTORY : Industrial Development Bank of India (“IDBI”) was established in 1964 under the IDBI Act, 1964 initially as a wholly owned subsidiary of the RBI. In 1976, the ownership of IDBI was transferred to the GoI and it was regarded as the principal Development Financial Institution (DFI) and played a pioneering role, particularly in the pre- economic reform’s era, in catalyzing broad-based industrial development in India. On January 21, 2019, LIC acquired 51% controlling stake making it the majority shareholder of IDBI Bank. The RBI, consequently, categorized IDBI Bank as a Private Sector Bank for regulatory purposes with effect from January 21, 2019. that pursuant to the strategic disinvestment of IDBI Bank It has now been decided by the
(i) GoI shall sell such number of shares representing 30.48 % and
(ii) Life Insurance Corporation of India (“LIC”) shall sell such number of shares representing 30.24 %
aggregating to 60.72% of the equity share capital of IDBI Bank, along with transfer of management control in IDBI Bank.
DISINVESTMENT PROCESS : As per PIM ( Prelimimary Information Memorandum ) , A bidder / Interested Party ( IP ) should have minimum Net Worth of INR 22,500 crore , An IP, which is required to prepare a profit & loss account, must have reported profits (profit after tax) in at least 3 out of the last 5 financial years. Consortium can also be an IP . The IPs, if they so desire, may submit the complete EoI in electronic form via email at [email protected] with all the requisite documents in PDF format by the Due Date. Eligible interested parties have to submit their Expression of Interest ( EOI ) before 23rd , December 2022 .
Subsequently KPMG will shortlist qualified interested party ( QIP ) and call for Financial Bids from QIPs. GoI will evaluate the financial bids and approve the successful bidder . On being adjudged as the Successful Bidder, the RBI will undertake the final assessment of the Successful Bidder on the basis of its ‘Fit & Proper’ assessment and the Successful Bidder will be under an obligation to submit and comply with all the requirements and conditions (and provide all information) as may be indicated by RBI at the time of undertaking the final assessment of the ‘Fit & Proper’ assessment by RBI . A share purchase agreement will be executed by LIC and GOI with the Successful Bidder.
PROCESS KICKSTARTS BY ISSUE OF PIM
DIRECT SALE TO SUCCESSFUL BIDDER
Dated 09.10.2022 : As a first step towards disinvestment of shares held by the Government of India ( GOI ) and Life Insurance Corporation of India ( LIC ) , Department of Investment and public Asset Management , Ministry of Finance has floated had called tenders in July 2021 for appointing Transaction Advisors & Legal Advisors separately . Consequently, the GoI acting through DIPAM has engaged KPMG India Private Limited as the Transaction Advisor (“TA”) and Link Legal as the Legal Advisors (“LA”) for providing advisory services and managing the Transaction. It is envisaged that strategic acquirer/investor will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank.
The Department DIAPM had received mandate from CCEA ( Cabinet Committee on economic Affairs ) to off-load up to 100% stake of GoI and LIC along with transfer of management control. It is clarified that LIC’s stake will be sold along with GoI’s shareholding in thistransaction.
Reserve Bank of India has already classified the bank as a private sector bank in view of less than 50 % holding by GOI even though LIC holds 49.24% (c. 529.41 crore shares) while the GoI holds 45.48% (c. 488.99 crore shares) in IDBI Bank as on March 31, 2022.
ABOUT IDBI BANK : IDBI Bank operates as a full-service universal bank serving customers from all the segments. IDBI Bank serves its customers through its wide physical network of 1,884 domestic branches, one overseas branch at Dubai International Financial Centre (“DIFC”), Dubai and one International Financial Services Centre (“IFSC”) Banking Unit (“IBU”) at Gujarat International Finance Tec–City (“GIFT”), Gandhinagar. The IDBI Bank’s physical network also comprised 3,400 ATMs as on March 31, 2022.
BANK DEPOSITS : Total deposits of IDBI Bank stood at c. INR 233, 133 Crore as on March 31, 2022. Retail Deposits, Savings Account Deposits, Current Account Deposits, Bulk Deposits accounted for 38% , 37% , 20% , and 5 % of aggregate deposits respectively.
ADVANCES :Global Gross Advances stood at c. INR 169,207 lac crore on March 31, 2022. Retail portfolio amounted to 63% of Global Gross Advances while the remaining 37% is apportioned to the Corporate Portfolio
BANK HISTORY : Industrial Development Bank of India (“IDBI”) was established in 1964 under the IDBI Act, 1964 initially as a wholly owned subsidiary of the RBI. In 1976, the ownership of IDBI was transferred to the GoI and it was regarded as the principal Development Financial Institution (DFI) and played a pioneering role, particularly in the pre- economic reform’s era, in catalyzing broad-based industrial development in India. On January 21, 2019, LIC acquired 51% controlling stake making it the majority shareholder of IDBI Bank. The RBI, consequently, categorized IDBI Bank as a Private Sector Bank for regulatory purposes with effect from January 21, 2019. that pursuant to the strategic disinvestment of IDBI Bank It has now been decided by the
(i) GoI shall sell such number of shares representing 30.48 % and
(ii) Life Insurance Corporation of India (“LIC”) shall sell such number of shares representing 30.24 %
aggregating to 60.72% of the equity share capital of IDBI Bank, along with transfer of management control in IDBI Bank.
DISINVESTMENT PROCESS : As per PIM ( Prelimimary Information Memorandum ) , A bidder / Interested Party ( IP ) should have minimum Net Worth of INR 22,500 crore , An IP, which is required to prepare a profit & loss account, must have reported profits (profit after tax) in at least 3 out of the last 5 financial years. Consortium can also be an IP . The IPs, if they so desire, may submit the complete EoI in electronic form via email at [email protected] with all the requisite documents in PDF format by the Due Date. Eligible interested parties have to submit their Expression of Interest ( EOI ) before 23rd , December 2022 .
Subsequently KPMG will shortlist qualified interested party ( QIP ) and call for Financial Bids from QIPs. GoI will evaluate the financial bids and approve the successful bidder . On being adjudged as the Successful Bidder, the RBI will undertake the final assessment of the Successful Bidder on the basis of its ‘Fit & Proper’ assessment and the Successful Bidder will be under an obligation to submit and comply with all the requirements and conditions (and provide all information) as may be indicated by RBI at the time of undertaking the final assessment of the ‘Fit & Proper’ assessment by RBI . A share purchase agreement will be executed by LIC and GOI with the Successful Bidder.
PRIVATIZATION OF BANKS MAY DO MORE HARM THAN GOOD : RBI ARTICLE
RBI CLARIFICATION DATED 19.08.2022 : Further RBI has issued following clarification on the article :
i) As clearly stated in the article itself, the views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.
ii) The Press Release relating to the August 2022 Bulletin highlights that “the gradual approach to privatisation adopted by the government can ensure that a void is not created in fulfilling the social objective of financial inclusion”.
iii) The concluding paragraph of the article, inter-alia, mentions that:
- “From the conventional perspective that privatisation is a panacea for all ills, the economic thinking has come a long way to acknowledge that a more nuanced approach is required while pursuing it”;
- “Recent mega merger of PSBs has resulted in consolidation of the sector, creating stronger and more robust and competitive banks”;
- “A big bang approach of privatisation of these banks may do more harm than good. The government has already announced its intention to privatize two banks. Such a gradual approach would ensure that large scale privatisation does not create a void in fulfilling important social objectives of financial inclusion and monetary transmission.”
Thus, the researchers are of the view that instead of a big bang approach, a gradual approach as announced by the Government would result in better outcomes.
Dated 19.08.2022 : A recent study done by the officers of Department of Economic Analysis of the Reserve Bank of India has come to an conclusion that " a big bang approach of privatization of these banks ( PSB s ) may do more harm than good. "
HIGHLIGHTS OF THE ARTICLE :
1 The article finds that while private sector banks (PVBs) are more efficient in profit maximization, their public sector counterparts have done better in promoting financial inclusion.
2 . Labour cost efficiency is higher in PSBs in comparison to PVBs.
3. Empirical evidence suggests that lending by PSBs is less procyclical than PVBs. Thus, PSBs help counter-cyclical policy actions to gain traction.
Hence the article suggests that the gradual approach to privatization adopted by the government can ensure that a void is not created in fulfilling the social objective of financial inclusion.
The detailed analytical article notes that " Our results also point out the countercyclical role of PSB lending. In the recent years, these banks have also gained greater market confidence. Despite the criticism of weak balance sheets, data suggests that they weathered the Covid-19 pandemic shock remarkably well.
The article titled " Privatisation of Public Sector Banks: An Alternate Perspective* " also suggests that staff cost in public sector banks are more efficient than the private sector banks , which is contrary to the general belief spread by the persons advocating privatization .
The private article is prepared by Snehal S. Herwadkar, Sonali Goel and Rishuka Bansal of the Banking Research Division, Department of Economic and Policy Research, Reserve Bank of India and it doesn't reflect the views of RBI . However as the article is a detailed study of the banking in India , it may force the government to review its policy on the privatization .
To read the article , CLICK HERE To read RBI Clarification , CLICK HERE
RBI CLARIFICATION DATED 19.08.2022 : Further RBI has issued following clarification on the article :
i) As clearly stated in the article itself, the views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.
ii) The Press Release relating to the August 2022 Bulletin highlights that “the gradual approach to privatisation adopted by the government can ensure that a void is not created in fulfilling the social objective of financial inclusion”.
iii) The concluding paragraph of the article, inter-alia, mentions that:
- “From the conventional perspective that privatisation is a panacea for all ills, the economic thinking has come a long way to acknowledge that a more nuanced approach is required while pursuing it”;
- “Recent mega merger of PSBs has resulted in consolidation of the sector, creating stronger and more robust and competitive banks”;
- “A big bang approach of privatisation of these banks may do more harm than good. The government has already announced its intention to privatize two banks. Such a gradual approach would ensure that large scale privatisation does not create a void in fulfilling important social objectives of financial inclusion and monetary transmission.”
Thus, the researchers are of the view that instead of a big bang approach, a gradual approach as announced by the Government would result in better outcomes.
Dated 19.08.2022 : A recent study done by the officers of Department of Economic Analysis of the Reserve Bank of India has come to an conclusion that " a big bang approach of privatization of these banks ( PSB s ) may do more harm than good. "
HIGHLIGHTS OF THE ARTICLE :
1 The article finds that while private sector banks (PVBs) are more efficient in profit maximization, their public sector counterparts have done better in promoting financial inclusion.
2 . Labour cost efficiency is higher in PSBs in comparison to PVBs.
3. Empirical evidence suggests that lending by PSBs is less procyclical than PVBs. Thus, PSBs help counter-cyclical policy actions to gain traction.
Hence the article suggests that the gradual approach to privatization adopted by the government can ensure that a void is not created in fulfilling the social objective of financial inclusion.
The detailed analytical article notes that " Our results also point out the countercyclical role of PSB lending. In the recent years, these banks have also gained greater market confidence. Despite the criticism of weak balance sheets, data suggests that they weathered the Covid-19 pandemic shock remarkably well.
The article titled " Privatisation of Public Sector Banks: An Alternate Perspective* " also suggests that staff cost in public sector banks are more efficient than the private sector banks , which is contrary to the general belief spread by the persons advocating privatization .
The private article is prepared by Snehal S. Herwadkar, Sonali Goel and Rishuka Bansal of the Banking Research Division, Department of Economic and Policy Research, Reserve Bank of India and it doesn't reflect the views of RBI . However as the article is a detailed study of the banking in India , it may force the government to review its policy on the privatization .
To read the article , CLICK HERE To read RBI Clarification , CLICK HERE

PRIVATIZATION OF BPCL : Process stopped as Buyers back off
Dated 27.05.2022 : Government of India had issued a global invitation in March 2020 for expression of interest ( EOI ) for strategic disinvestment of 52.98% equity share capital held by them in Bharat Petroleum Corporation Limited. Due to Covid-19 pandemic the EoI submission date had to be extended many times to address the constraints faced by the potential bidders.
In response to the invitation, multiple EoIs were received from interested parties . Qualified bidders had initiated due diligence on the Company. Owing to prevailing conditions in the global energy market, the majority of potential buyers have expressed their inability to further participate in the bidding process for BPCL.
In view of this, based on decisions of the Alternative Mechanism (Empowered Group of Ministers) , Government of India has decided to call off the present process for strategic disinvestment of BPCL and the EoIs received from QIPs have been cancelled.
To read DIPAM notification in this regard , CLICK HERE
Dated 27.05.2022 : Government of India had issued a global invitation in March 2020 for expression of interest ( EOI ) for strategic disinvestment of 52.98% equity share capital held by them in Bharat Petroleum Corporation Limited. Due to Covid-19 pandemic the EoI submission date had to be extended many times to address the constraints faced by the potential bidders.
In response to the invitation, multiple EoIs were received from interested parties . Qualified bidders had initiated due diligence on the Company. Owing to prevailing conditions in the global energy market, the majority of potential buyers have expressed their inability to further participate in the bidding process for BPCL.
In view of this, based on decisions of the Alternative Mechanism (Empowered Group of Ministers) , Government of India has decided to call off the present process for strategic disinvestment of BPCL and the EoIs received from QIPs have been cancelled.
To read DIPAM notification in this regard , CLICK HERE
ASBA DESIGNATED BANK BRANCHES TO REMAIN OPEN ON THE SUNDAY 8TH , MAY :
Dated 05.05.2022 : The Government of India, in order to facilitate bidding for LIC IPO, has requested that all bank branches designated to process ASBA (Application Supported by Blocked Amount) applications may be kept open for public on May 8, 2022 (Sunday). The matter has been examined by RBI and RBI has decided that banks may keep all their ASBA designated branches open on May 8, 2022 (Sunday) for the above purpose.
To read RBI notification in this regard , CLICK HERE
Dated 05.05.2022 : The Government of India, in order to facilitate bidding for LIC IPO, has requested that all bank branches designated to process ASBA (Application Supported by Blocked Amount) applications may be kept open for public on May 8, 2022 (Sunday). The matter has been examined by RBI and RBI has decided that banks may keep all their ASBA designated branches open on May 8, 2022 (Sunday) for the above purpose.
To read RBI notification in this regard , CLICK HERE

LIC OF INDIA FILES RED HERRING DOCUMENTS WITH ROC :
Dated 27.04.2022 : Today , Life insurance Corporation of India ( LIC ) submitted the Red Herring Document with SEBI . Accordingly , the Government of India is offering 221,374,920 Equity Shares for sale to the public at the price band of Rs 902 to Rs 949 per share of face value Rs 10 , which is less than the original offer by 30 % . Now Government of India is selling 3.5 % of its total holding in the public sector company against the original proposal of 5 % . IPO opens on the Monday 2nd , 2022 for anchor investors and on the Wednesday 4th , May 2022 for the public . The bid / offer closes on May 9th , 2022.
Further, up to 1,581,249 Equity Shares shall be made available for allocation on a proportionate basis only to Eligible Employee(s)Bidding in the Employee Reservation Portion and up to 22,137,492Equity Shares,)shall be made available for allocation on a proportionate basis only to Eligible Policyholder(s) Bidding in the Policyholder Reservation Portion subject to valid Bids being received at or above the Offer Price.
The government hopes to raise around Rs 20,000 crores through this issue .
HIGHLIGHTS OF THE ISSUE :
1. A DISCOUNT OF ₹45 PER EQUITY SHARE IS BEING OFFERED TO THE RETAIL INDIVIDUAL BIDDERS BIDDING IN THE RETAIL PORTION AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION.
2. A DISCOUNT OF ₹60 PER EQUITY SHARE IS BEING OFFERED TO THE ELIGIBLE POLICYHOLDERSBIDDING IN THE POLICYHOLDER RESERVATION PORTION.
3. BIDS CAN BE MADE FOR A MINIMUMOF 15 EQUITY SHARESAND IN MULTIPLES OF 15 EQUITY SHARES THEREAFTER
To read the complete Red Herring Document , CLICK HERE
About LICI : The Life Insurance Corporation of India ( LICI ) , a statutory Corporation constituted under the LIC Act 1956, is a leading life insurer of India wholly owned by the Government of India . LICI has three branches outside India in UK, Fiji and Mauritius, a wholly owned subsidiary in Singapore and Joint Ventures in Bahrain, Kenya, Sri Lanka, Nepal, Saudi Arabia and Bangladesh. Its subsidiaries in India include LIC Pension Fund Ltd and LIC Cards Services Ltd. Its associates include IDBI Bank Ltd., LIC Mutual Fund and LIC Housing Finance Limited.
LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in India, with a 64.1% market share in terms of premium (or GWP), a 66.2% market share in terms of new business premium (or NBP), a 74.6% market share in terms of number of individual policies issued, a 81.1% market share in terms of number of group policies issued for FY2020- 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at March 31, 2021.
About Life Insurance Industry : There are currently 24 life insurance companies in India, with Life Insurance Corporation being the sole public player. The size of the Indian life insurance industry was ₹6.2 trillion on a total-premium basis in FY 2020- 2021, up from ₹5.7 trillion in FY 2019- 2020. The industry’s total premium has grown at 11% CAGR in the five years ended Fiscal 2021. CRISIL Research forecasts the industry’s total premium to grow at 14-15% CAGR over the next five years, to reach close to ₹12.4 trillion by Fiscal 2026.
Dated 27.04.2022 : Today , Life insurance Corporation of India ( LIC ) submitted the Red Herring Document with SEBI . Accordingly , the Government of India is offering 221,374,920 Equity Shares for sale to the public at the price band of Rs 902 to Rs 949 per share of face value Rs 10 , which is less than the original offer by 30 % . Now Government of India is selling 3.5 % of its total holding in the public sector company against the original proposal of 5 % . IPO opens on the Monday 2nd , 2022 for anchor investors and on the Wednesday 4th , May 2022 for the public . The bid / offer closes on May 9th , 2022.
Further, up to 1,581,249 Equity Shares shall be made available for allocation on a proportionate basis only to Eligible Employee(s)Bidding in the Employee Reservation Portion and up to 22,137,492Equity Shares,)shall be made available for allocation on a proportionate basis only to Eligible Policyholder(s) Bidding in the Policyholder Reservation Portion subject to valid Bids being received at or above the Offer Price.
The government hopes to raise around Rs 20,000 crores through this issue .
HIGHLIGHTS OF THE ISSUE :
1. A DISCOUNT OF ₹45 PER EQUITY SHARE IS BEING OFFERED TO THE RETAIL INDIVIDUAL BIDDERS BIDDING IN THE RETAIL PORTION AND THE ELIGIBLE EMPLOYEES BIDDING IN THE EMPLOYEE RESERVATION PORTION.
2. A DISCOUNT OF ₹60 PER EQUITY SHARE IS BEING OFFERED TO THE ELIGIBLE POLICYHOLDERSBIDDING IN THE POLICYHOLDER RESERVATION PORTION.
3. BIDS CAN BE MADE FOR A MINIMUMOF 15 EQUITY SHARESAND IN MULTIPLES OF 15 EQUITY SHARES THEREAFTER
To read the complete Red Herring Document , CLICK HERE
About LICI : The Life Insurance Corporation of India ( LICI ) , a statutory Corporation constituted under the LIC Act 1956, is a leading life insurer of India wholly owned by the Government of India . LICI has three branches outside India in UK, Fiji and Mauritius, a wholly owned subsidiary in Singapore and Joint Ventures in Bahrain, Kenya, Sri Lanka, Nepal, Saudi Arabia and Bangladesh. Its subsidiaries in India include LIC Pension Fund Ltd and LIC Cards Services Ltd. Its associates include IDBI Bank Ltd., LIC Mutual Fund and LIC Housing Finance Limited.
LIC has been providing life insurance in India for more than 65 years and is the largest life insurer in India, with a 64.1% market share in terms of premium (or GWP), a 66.2% market share in terms of new business premium (or NBP), a 74.6% market share in terms of number of individual policies issued, a 81.1% market share in terms of number of group policies issued for FY2020- 2021, as well as by the number of individual agents, which comprised 55% of all individual agents in India as at March 31, 2021.
About Life Insurance Industry : There are currently 24 life insurance companies in India, with Life Insurance Corporation being the sole public player. The size of the Indian life insurance industry was ₹6.2 trillion on a total-premium basis in FY 2020- 2021, up from ₹5.7 trillion in FY 2019- 2020. The industry’s total premium has grown at 11% CAGR in the five years ended Fiscal 2021. CRISIL Research forecasts the industry’s total premium to grow at 14-15% CAGR over the next five years, to reach close to ₹12.4 trillion by Fiscal 2026.
LIC OF INDIA FILES DRAFT OFFER FOR SALE WITH SEBI :
Biggest IPO OFFER
Dated 14.02.2022 : Life insurance Corporation of India has filed Document of Draft offer of documents with SEBI ( Security Exchange Board of India ) yesterday in connection with its First offer of sale ( OFS ) of 316, 249 Millions of its Equity shares , one of the biggest offer for sale announced by the Government of India . The sale price is yet to be announced .
Presently Government of India is holding 6,324,997,701 equity shares , Out of which 316, 249 Millions of its Equity shares are being offered for sale ( 5 % of total holding ) Out of the shares held for OFS , 5 % is reserved for employees and 10 % for the policy holders .
The issue is being managed by Kotak Mahindra Capital Company Limited , Axis Capital Limited , BoFA securities India Limited , Citigroup Global markets India Limited , Nomura Financial Advisory & Securities Limited , Goldman Sachs India Securities Limited , ICICI Securities Limited , J.P .Morgan India Private Limited & SBI Capital Markets Limited .
The pricing and dates of issue are yet to be finalized .
Presently Government of India is holding 100% equity in this India's largest life insurer . The IPO move was first announced by the Finance Minister Ms Nirmala Sitaraman in her budget speech for FY 2021-22 ( on 01.02.2021 ) . It is expected that the Government will be helped by this sale in managing financial shortage it is facing due to pandemic induced battering of its economy .
To read the document of OFS filed with SEBI , CLICK HERE
Biggest IPO OFFER
Dated 14.02.2022 : Life insurance Corporation of India has filed Document of Draft offer of documents with SEBI ( Security Exchange Board of India ) yesterday in connection with its First offer of sale ( OFS ) of 316, 249 Millions of its Equity shares , one of the biggest offer for sale announced by the Government of India . The sale price is yet to be announced .
Presently Government of India is holding 6,324,997,701 equity shares , Out of which 316, 249 Millions of its Equity shares are being offered for sale ( 5 % of total holding ) Out of the shares held for OFS , 5 % is reserved for employees and 10 % for the policy holders .
The issue is being managed by Kotak Mahindra Capital Company Limited , Axis Capital Limited , BoFA securities India Limited , Citigroup Global markets India Limited , Nomura Financial Advisory & Securities Limited , Goldman Sachs India Securities Limited , ICICI Securities Limited , J.P .Morgan India Private Limited & SBI Capital Markets Limited .
The pricing and dates of issue are yet to be finalized .
Presently Government of India is holding 100% equity in this India's largest life insurer . The IPO move was first announced by the Finance Minister Ms Nirmala Sitaraman in her budget speech for FY 2021-22 ( on 01.02.2021 ) . It is expected that the Government will be helped by this sale in managing financial shortage it is facing due to pandemic induced battering of its economy .
To read the document of OFS filed with SEBI , CLICK HERE
GOVERNMENT MOVES ON PRIVATIZATION :
FM SILENT ON PSB PRIVATIZATION
Dated 03.02.2022 : In pursuance of its privatization policy . Government has transferred the National carrier Air India to the strategic buyer Tatas . The strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected and cabinet sub committee has given approval . The public issue of the LIC is expected shortly.
FM has listed these achievements in her budget speech . But she is silent on privatization moves on Public Sector Banks .
FM had announced the Government' decision on Bank privatization move in her budget speech of 2021, wherein she had stated that two PSBs would be privatized in the financial year 2021-22 . A bill on the subject was earlier proposed to be introduced in the current winter session of the parliament . The plan was opposed by the staff and officers of all the public sector banks and they had undertaken 2 days strike on 16th & 17th of December 2021 .
Subsequently Finance Minister had advised the parliament that no discussion , on the proposal to privatize two public sector banks , has taken place in the cabinet so far . Now she is silent on the subject in her budget speech of 2022 .
Whether government has deferred the plan , we have to wait and see
FM SILENT ON PSB PRIVATIZATION
Dated 03.02.2022 : In pursuance of its privatization policy . Government has transferred the National carrier Air India to the strategic buyer Tatas . The strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected and cabinet sub committee has given approval . The public issue of the LIC is expected shortly.
FM has listed these achievements in her budget speech . But she is silent on privatization moves on Public Sector Banks .
FM had announced the Government' decision on Bank privatization move in her budget speech of 2021, wherein she had stated that two PSBs would be privatized in the financial year 2021-22 . A bill on the subject was earlier proposed to be introduced in the current winter session of the parliament . The plan was opposed by the staff and officers of all the public sector banks and they had undertaken 2 days strike on 16th & 17th of December 2021 .
Subsequently Finance Minister had advised the parliament that no discussion , on the proposal to privatize two public sector banks , has taken place in the cabinet so far . Now she is silent on the subject in her budget speech of 2022 .
Whether government has deferred the plan , we have to wait and see
FM ON PRIVATIZATION IN HER BUDGET SPEECH :
"Towards implementation of the new Public Sector Enterprise policy, the strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected. The public issue of the LIC is expected shortly. Others too are in the process for 2022-23. "
"Towards implementation of the new Public Sector Enterprise policy, the strategic transfer of ownership of Air India has been completed. The strategic partner for NINL (Neelanchal Ispat Nigam Limited) has been selected. The public issue of the LIC is expected shortly. Others too are in the process for 2022-23. "
CABINET NOD FOR NINL BUYER
Neelachal Ispat Nigam Ltd. (NINL) is a joint venture of 4 CPSEs, namely MMTC, NMDC, BHEL, MECON and 2 Odisha Govt. PSUs, namely OMC and IPICOL. NINL has an integrated steel plant with a capacity of 1.1 MT, at Kalinganagar, Odisha. The company has been running in huge losses and plant is closed since 30.3.2020. The company has debt and liabilities exceeding Rs. 6,600 crores as on 31.3.2021, including overdues of promoters (Rs 4,116 crore), Banks (Rs 1,741 crore), other creditors and employees. The company has negative networth of Rs. 3,487 crore and accumulated losses of Rs. 4,228 crore as of 31.3.2021.
Govt. of India does not hold any equity in the company. But , on the request of the Boards of selling shareholder PSEs and on concurrence by the Govt of Odisha, CCEA ‘in-principle’ approved strategic disinvestment of NINL on 8.1.2020, and authorised Department of Disinvestment & Public Asset Management (DIPAM) to undertake the transaction.
In the bidding process , M/s Tata Steel Long Products Limited (TSLP) emerged as H-1 bidder, whose bid has been accepted . Letter of Intent (LoI) is being issued to TSLP inviting them to sign the SPA. At this stage, 10% of the bid amount shall be paid by the successful bidder into the Escrow account.
Now a cabinet sub- committee called Alternative Mechanism, comprising Shri Nitin Gadkari, Union Minister for Road Transport and Highways, Smt. Nirmala Sitharaman, Union Minister for Finance & Corporate Affairs and Shri Piyush Goyal, Union Minister of Commerce & Industry, Consumer Affairs, Food and Public Distribution and Textiles, which is empowered by the Cabinet Committee on Economic Affairs, have approved the highest bid of M/s Tata Steel Long Products Limited for 93.71% of shares of Joint Venture partners of 4 CPSEs and 2 Odisha Govt State PSEs at the Bid Enterprise Value of Rs. 12,100 crore.
This is the first instance of privatization of a public sector steel manufacturing enterprise in India
Source : PIB
Govt. of India does not hold any equity in the company. But , on the request of the Boards of selling shareholder PSEs and on concurrence by the Govt of Odisha, CCEA ‘in-principle’ approved strategic disinvestment of NINL on 8.1.2020, and authorised Department of Disinvestment & Public Asset Management (DIPAM) to undertake the transaction.
In the bidding process , M/s Tata Steel Long Products Limited (TSLP) emerged as H-1 bidder, whose bid has been accepted . Letter of Intent (LoI) is being issued to TSLP inviting them to sign the SPA. At this stage, 10% of the bid amount shall be paid by the successful bidder into the Escrow account.
Now a cabinet sub- committee called Alternative Mechanism, comprising Shri Nitin Gadkari, Union Minister for Road Transport and Highways, Smt. Nirmala Sitharaman, Union Minister for Finance & Corporate Affairs and Shri Piyush Goyal, Union Minister of Commerce & Industry, Consumer Affairs, Food and Public Distribution and Textiles, which is empowered by the Cabinet Committee on Economic Affairs, have approved the highest bid of M/s Tata Steel Long Products Limited for 93.71% of shares of Joint Venture partners of 4 CPSEs and 2 Odisha Govt State PSEs at the Bid Enterprise Value of Rs. 12,100 crore.
This is the first instance of privatization of a public sector steel manufacturing enterprise in India
Source : PIB
AIR INDIA PRIVATIZED

AIR INDIA PRIVATIZATION PROCEDURE COMPLETED : HANDED OVER TO THE BUYER TATAS
Dated 03.02.2022 : National Carrier of India , Air India has been privatized and handed over to the leading Indian industry giant Tatas who were the original owners of the airlines before it was taken over by the government .
Government of India announced on 27.01.2022
"The Air India strategic disinvestment transaction has been completed on 27.01.2022 with Government receiving a consideration of Rs 2,700 crore from the Strategic Partner (M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd), retaining debt of Rs 15,300 crore in Air India and AIXL and transferring shares of Air India (100% shares of Air India and its subsidiary AIXL and 50% shares of AISATS) to the Strategic Partner.
Following Government’s approval of the highest price bid of M/s Talace Pvt Ltd for strategic disinvestment of Air India, the Letter of Intent was issued to the winning bidder on 11 October 2021. The Share Purchase Agreement (SPA) was signed on 25 October, 2021. Thereafter, Strategic Partner (M/s Talace Pvt Ltd), Air India and the Government worked towards satisfying a set of conditions precedent defined in the SPA including approvals from anti-trust bodies, regulators, lenders, third parties, etc. These conditions have since been met . "
Source ; PIB
Dated 03.02.2022 : National Carrier of India , Air India has been privatized and handed over to the leading Indian industry giant Tatas who were the original owners of the airlines before it was taken over by the government .
Government of India announced on 27.01.2022
"The Air India strategic disinvestment transaction has been completed on 27.01.2022 with Government receiving a consideration of Rs 2,700 crore from the Strategic Partner (M/s Talace Pvt Ltd, a wholly owned subsidiary of M/s Tata Sons Pvt Ltd), retaining debt of Rs 15,300 crore in Air India and AIXL and transferring shares of Air India (100% shares of Air India and its subsidiary AIXL and 50% shares of AISATS) to the Strategic Partner.
Following Government’s approval of the highest price bid of M/s Talace Pvt Ltd for strategic disinvestment of Air India, the Letter of Intent was issued to the winning bidder on 11 October 2021. The Share Purchase Agreement (SPA) was signed on 25 October, 2021. Thereafter, Strategic Partner (M/s Talace Pvt Ltd), Air India and the Government worked towards satisfying a set of conditions precedent defined in the SPA including approvals from anti-trust bodies, regulators, lenders, third parties, etc. These conditions have since been met . "
Source ; PIB
NO CABINET DECISION YET ON BANK PRIVATIZATION BILL : FM
Dated 22.12.2021 : Finance Minister Ms Nirmala Sitharaman yesterday advised the parliament that no discussion , on the proposal to privatize two public sector banks , has taken place in the cabinet so far . Hence it's highly unlikely that banking law amendment to be placed for consideration of parliament in the on-going winter session of the parliament . The winter session is going to conclude tomorrow the Thursday 23rd .
FM had announced the Government' decision on Bank privatization move in her budget speech of 1st, February , 2021, wherein she had stated that two PSBs would be privatized in the current financial year . A bill on the subject was earlier proposed to be introduced in the current winter session of the parliament . The plan was opposed by the staff and officers of all the public sector banks and they had undertaken 2 days strike on 16th & 17th of this month .
Dated 22.12.2021 : Finance Minister Ms Nirmala Sitharaman yesterday advised the parliament that no discussion , on the proposal to privatize two public sector banks , has taken place in the cabinet so far . Hence it's highly unlikely that banking law amendment to be placed for consideration of parliament in the on-going winter session of the parliament . The winter session is going to conclude tomorrow the Thursday 23rd .
FM had announced the Government' decision on Bank privatization move in her budget speech of 1st, February , 2021, wherein she had stated that two PSBs would be privatized in the current financial year . A bill on the subject was earlier proposed to be introduced in the current winter session of the parliament . The plan was opposed by the staff and officers of all the public sector banks and they had undertaken 2 days strike on 16th & 17th of this month .
. BANKING LAW AMENDMENT BILL IN WINTER SESSION OF PARLIAMENT :
Dated 24.11.2021 : The government will table during the winter session of parliament , Banking Laws ( Amendment ) Bill 2021 which deals with privatization of two public sector bank . The blll is one of the 26 bills to be tabled during the session . The details of the bill are awaited .
The winter session will begin on 29th of this month .
We may also recall here that CNBC Awaz , a TV CHANNEL had published in June month a unconfirmed report indicating disinvestment in Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB )
Dated 24.11.2021 : The government will table during the winter session of parliament , Banking Laws ( Amendment ) Bill 2021 which deals with privatization of two public sector bank . The blll is one of the 26 bills to be tabled during the session . The details of the bill are awaited .
The winter session will begin on 29th of this month .
We may also recall here that CNBC Awaz , a TV CHANNEL had published in June month a unconfirmed report indicating disinvestment in Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB )
INSURANCE AMENDMENT BILL 2021 PASSED IN LOKSABHA , ALLOWS HIGHER PARTICIPATION OF PRIVATE SHAREHOLDERS
UPDATE DATED 13.08.2021 : Since Rajyasabha also passed the bill
Dated 03.08.2021 : Yesterday Loksabha passed , amid din without a debate , General Insurance Business (Nationalisation) Amendment Bill, 2021 and the amendment paves way for higher private participation in any of the five public sector insurance companies . They are General insurance Corporation of India , National insurance Company , New India Insurance company , Oriental insurance company and united India Insurance company .
The amendment removes section 10B of the act which mandates minimum 51 % holding of the government share in each company . Once the control of the government on a specified company ceases as announced by the government , Bill will not be applicable to such company .
However FM Niramala Sitharaman has clarified that amendment carried out is not with the goal of privatization . But with lower shareholding , it would be easier for the government to privatize the insurance company on a later date .
The government has not yet announced any sale of shares in any insurance company so far and it also intends to privatize one insurance company in the present financial year .
UPDATE DATED 13.08.2021 : Since Rajyasabha also passed the bill
Dated 03.08.2021 : Yesterday Loksabha passed , amid din without a debate , General Insurance Business (Nationalisation) Amendment Bill, 2021 and the amendment paves way for higher private participation in any of the five public sector insurance companies . They are General insurance Corporation of India , National insurance Company , New India Insurance company , Oriental insurance company and united India Insurance company .
The amendment removes section 10B of the act which mandates minimum 51 % holding of the government share in each company . Once the control of the government on a specified company ceases as announced by the government , Bill will not be applicable to such company .
However FM Niramala Sitharaman has clarified that amendment carried out is not with the goal of privatization . But with lower shareholding , it would be easier for the government to privatize the insurance company on a later date .
The government has not yet announced any sale of shares in any insurance company so far and it also intends to privatize one insurance company in the present financial year .
DATED 09.06.2021 : FM had announced the Government' decision on Bank privatisation move in her budget speech of 1st, February , 2021 . Thereafter bank unions had their agitation against the move in February and March . Various reports are coming about the issue from various sources . So far the news regarding the issue was reported in various pages like Financial news , bankers news , Banking news . Now we have brought all such news and reports under this page and all future news on the isssue will be reported here in this page

DISINVESTMENT PROCESS BEGINS FOR LIC OF INDIA :
Government Proposes largest IPO in the history of Indian IPO
Dated 17.07.2021 : Finance Minister Ms Nirmala Sitharaman had announced in her budget speech delivered on 01.02.2021 about the partial disinvestment of shares of Life Insurance Corporation of India ( LICI ) . Now the Finance Ministry has started the process by calling for tender for appointment of Registrar And Share Transfer Agent (RTA) , Book Running Lead Managers (BRLMs) , Legal Adviser (LA) and Advertising Agency . The bidding will end by 5th Aug / 6th Aug 2021 .
According to Bengaluru based Deccan Herald , Cabinet Committee for Economic Affairs (CCEA) has already cleared the disinvestment of LICI through an initial public offering (IPO) last week and the report is based on information from unnamed government officials.
According to strategic investment policy of 2015-16 of the central government , the department takes either of the two following routes for disinvestment :
1. Minority stake stale by SEBI approved modes
2. Strategic Disinvestment along with transfer of management control.
The government will take in this case of LIC disinvestment the first routed stated above through the Initial Public offer ( IPO ) . It was stated in FM'S budget speech also . It is expected that the issue will be one of the largest IPOs in Indian market this year . Media has reported that 10 % of the issue will be reserved for Policy holders of the corporation .
About the IPO : The potential size of the IPO is expected to be larger than any precedent in Indian markets. In order to achieve a successful IPO, it is the endeavor of the GoI to attract investment from institutional investors, both domestic and global, in addition to the retail investor . The listing of shares of the LICI on stock exchanges would entail part-sale of Government’s stake in LICI and to raise fresh equity share capital for LICI , through a prospectus based “Initial Public Offer” (IPO) in the domestic market as per SEBI Rules and Regulations. The percentage of paid-up equity to be issued/divested as part of the IPO will be determined later . A part of the public offering may be reserved for employees and policyholders of LICI . In order to achieve a successful IPO, it is the endeavor of the GoI to attract investment from institutional investors, both domestic and global, in addition to the retail investor .
Government Proposes largest IPO in the history of Indian IPO
Dated 17.07.2021 : Finance Minister Ms Nirmala Sitharaman had announced in her budget speech delivered on 01.02.2021 about the partial disinvestment of shares of Life Insurance Corporation of India ( LICI ) . Now the Finance Ministry has started the process by calling for tender for appointment of Registrar And Share Transfer Agent (RTA) , Book Running Lead Managers (BRLMs) , Legal Adviser (LA) and Advertising Agency . The bidding will end by 5th Aug / 6th Aug 2021 .
According to Bengaluru based Deccan Herald , Cabinet Committee for Economic Affairs (CCEA) has already cleared the disinvestment of LICI through an initial public offering (IPO) last week and the report is based on information from unnamed government officials.
According to strategic investment policy of 2015-16 of the central government , the department takes either of the two following routes for disinvestment :
1. Minority stake stale by SEBI approved modes
2. Strategic Disinvestment along with transfer of management control.
The government will take in this case of LIC disinvestment the first routed stated above through the Initial Public offer ( IPO ) . It was stated in FM'S budget speech also . It is expected that the issue will be one of the largest IPOs in Indian market this year . Media has reported that 10 % of the issue will be reserved for Policy holders of the corporation .
About the IPO : The potential size of the IPO is expected to be larger than any precedent in Indian markets. In order to achieve a successful IPO, it is the endeavor of the GoI to attract investment from institutional investors, both domestic and global, in addition to the retail investor . The listing of shares of the LICI on stock exchanges would entail part-sale of Government’s stake in LICI and to raise fresh equity share capital for LICI , through a prospectus based “Initial Public Offer” (IPO) in the domestic market as per SEBI Rules and Regulations. The percentage of paid-up equity to be issued/divested as part of the IPO will be determined later . A part of the public offering may be reserved for employees and policyholders of LICI . In order to achieve a successful IPO, it is the endeavor of the GoI to attract investment from institutional investors, both domestic and global, in addition to the retail investor .
TRANSACTION ADVISOR TO BE APPOINTED FOR IDBI DISINVESTMENT
GOVERNMENT GIVES GREEN SIGNAL FOR 100% STAKE SALE IN IDBI BANK : PROCESS BEGINS
Dated 10.07.2021 : As a first step towards disinvestment of shares held by the Government of India ( GOI ) and Life Insurance Corporation of India ( LIC ) , Department of Investment and public Asset Management , Ministry of Finance has floated tenders for appointing Transaction Advisors & Legal Advisors separately . The bid can be tendered up to 22nd , July 2021 and it will be opened on the 23rd , July .
The Department has received mandate from CCEA ( Cabinet Committee on economic Affairs ) to off-load up to 100% stake of GoI and LIC along with transfer of management control. However, the exact quantum is yet to be worked out later as the transaction and ascertain investors’ interest, market appetite etc is known . It is clarified that LIC’s stake will be sold along with GoI’s shareholding in this transaction. A consortium of bidders may also participate in the tender process .
Further GOI is yet to decide on any internal restructuring requirement before the proposed transaction i.e. if any business or part thereof is to be transferred or demerged prior to disinvestment .
Presently GOI is holding 45.48 % and LIC is holding 49.24 % of the total stake . Reserve Bank of India has already classified the bank as a private sector bank in view of less than 50 % holding by GOI .
Dated 10.07.2021 : As a first step towards disinvestment of shares held by the Government of India ( GOI ) and Life Insurance Corporation of India ( LIC ) , Department of Investment and public Asset Management , Ministry of Finance has floated tenders for appointing Transaction Advisors & Legal Advisors separately . The bid can be tendered up to 22nd , July 2021 and it will be opened on the 23rd , July .
The Department has received mandate from CCEA ( Cabinet Committee on economic Affairs ) to off-load up to 100% stake of GoI and LIC along with transfer of management control. However, the exact quantum is yet to be worked out later as the transaction and ascertain investors’ interest, market appetite etc is known . It is clarified that LIC’s stake will be sold along with GoI’s shareholding in this transaction. A consortium of bidders may also participate in the tender process .
Further GOI is yet to decide on any internal restructuring requirement before the proposed transaction i.e. if any business or part thereof is to be transferred or demerged prior to disinvestment .
Presently GOI is holding 45.48 % and LIC is holding 49.24 % of the total stake . Reserve Bank of India has already classified the bank as a private sector bank in view of less than 50 % holding by GOI .
CABINET PANEL HOLDS MEETING ON NITI AYOG RECOMMENDATIONS :
Dated 28.06.2021 : Quoting PTI and sources , it is reported by various newspapers today that a cabinet panel / core group headed by cabinet secretary met recently to discuss on the suggestion of Niti Ayog for privatizing two public sector banks . Core Group of Secretaries consists of economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.
It is understood that the committee discussed Niti Ayog recommendations along with various regulatory and administrative issues and ways to tie up any loose ends if any . The core committee has to submit the finalized names to the Alternative Mechanism (AM) for approval . Finally the cabinet headed by the Prime Minister has to give its approval . It is further reported that the committee also discussed on the issues pertaining to workers' interest of the would be privatized banks .
However it is not known whether any decisions were arrived at the meeting .
Earlier it was widely reported that Indian Overseas Bank and Central Bank are the two banks recommended by Niti Ayog and the report is not so far disputed by the government .
Dated 28.06.2021 : Quoting PTI and sources , it is reported by various newspapers today that a cabinet panel / core group headed by cabinet secretary met recently to discuss on the suggestion of Niti Ayog for privatizing two public sector banks . Core Group of Secretaries consists of economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.
It is understood that the committee discussed Niti Ayog recommendations along with various regulatory and administrative issues and ways to tie up any loose ends if any . The core committee has to submit the finalized names to the Alternative Mechanism (AM) for approval . Finally the cabinet headed by the Prime Minister has to give its approval . It is further reported that the committee also discussed on the issues pertaining to workers' interest of the would be privatized banks .
However it is not known whether any decisions were arrived at the meeting .
Earlier it was widely reported that Indian Overseas Bank and Central Bank are the two banks recommended by Niti Ayog and the report is not so far disputed by the government .
GOVERNMENT TO SELL 51 % STAKE IN IOB & CBI : CNBC
Dated 22.06.2021 : According to a report published by CNBC TV 18 / CNBC Awaz yesterday , Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB ) might see 51 percent sale in the first phase of disinvestment. The report bolsters earlier news published by Times of India ( See the below report dated 08.06.201 ) that the above two banks are only shortlisted by Niti Ayog for disinvestment .
CNBC Report also suggests that the government is likely to amend the Banking Regulations Act and Banking Law Act during the monsoon session of Parliament to privatise the two-state run banks . Some time back , there was an another report from PTI suggesting mooting of Voluntary Retirement scheme to be launched in the above two banks before disinvestment . However cabinet has to approve the two names before government taking further steps .
Reports are all on the basis of unconfirmed sources and the government so far has neither confirmed or rebutted them .
However as a reaction of these reports , share prices of Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB ) have reached new recent highs . IOB shares are trading today at around Rs 25 per share while CBI Shares are trading at Rs 26 , while we are publishing this report .
To read the CNBC TV18 report , CLICK HERE
Dated 22.06.2021 : According to a report published by CNBC TV 18 / CNBC Awaz yesterday , Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB ) might see 51 percent sale in the first phase of disinvestment. The report bolsters earlier news published by Times of India ( See the below report dated 08.06.201 ) that the above two banks are only shortlisted by Niti Ayog for disinvestment .
CNBC Report also suggests that the government is likely to amend the Banking Regulations Act and Banking Law Act during the monsoon session of Parliament to privatise the two-state run banks . Some time back , there was an another report from PTI suggesting mooting of Voluntary Retirement scheme to be launched in the above two banks before disinvestment . However cabinet has to approve the two names before government taking further steps .
Reports are all on the basis of unconfirmed sources and the government so far has neither confirmed or rebutted them .
However as a reaction of these reports , share prices of Central Bank of India ( CBI ) and Indian Overseas Bank ( IOB ) have reached new recent highs . IOB shares are trading today at around Rs 25 per share while CBI Shares are trading at Rs 26 , while we are publishing this report .
To read the CNBC TV18 report , CLICK HERE
NITI AYOG HAS RECOMMENDED ONE YEAR JOB GUARANTEE ON PRIVATIZATION : BLOOMBERGQUINT
Dated 09.06.2021 : Media house Bloombergquint has reported yesterday that Niti Ayog has recommended one year job protection for staff of banks to be privatized from the new prospective owners . Earlier in the proposal to sell off Air India , Government had proposed 3 years job protection and still Government is yet to find a suitable buyer . Report is silent on the liability of new buyer on pension payments .
The news has not be confirmed or rebutted by the government or Niti Ayog . However it's certain that such a proposal of job guarantee for a short period will attract protests from bank staff . The bank unions had gone on two day strike in March month of this year protesting against the privatization plan of the government .
Recently rating agency Fitch had opined that privatization plans of the government may be delayed due to pandemic .
Dated 09.06.2021 : Media house Bloombergquint has reported yesterday that Niti Ayog has recommended one year job protection for staff of banks to be privatized from the new prospective owners . Earlier in the proposal to sell off Air India , Government had proposed 3 years job protection and still Government is yet to find a suitable buyer . Report is silent on the liability of new buyer on pension payments .
The news has not be confirmed or rebutted by the government or Niti Ayog . However it's certain that such a proposal of job guarantee for a short period will attract protests from bank staff . The bank unions had gone on two day strike in March month of this year protesting against the privatization plan of the government .
Recently rating agency Fitch had opined that privatization plans of the government may be delayed due to pandemic .
IOB & CBI MAY BE THE BANKS SELECTED FOR PRIVATIZATION BY NITI AYOG : TOI
Dated 08.06.2021 : Leading Newspaper Times of India has told , quoting sources, that Indian Overseas bank( IOB ) and Central Bank of India ( CBI ) may be the two banks selected and recommended for privatization by Niti Ayog . It also said that Bank of India ( BOI ) may also be taken up for privatization during the year . It also said that time lag is possible to complete the process of privatization as legislative changes are required to privatize nationalised banks . During the current month Share prices of IOB jumped around 40 % and share prices of CBI have moved up 25 % over the rumours of privatization .
The newspaper reported the news yesterday and so far , finance Ministry or Niti Ayog have neither confirmed or rebutted the news .
Dated 08.06.2021 : Leading Newspaper Times of India has told , quoting sources, that Indian Overseas bank( IOB ) and Central Bank of India ( CBI ) may be the two banks selected and recommended for privatization by Niti Ayog . It also said that Bank of India ( BOI ) may also be taken up for privatization during the year . It also said that time lag is possible to complete the process of privatization as legislative changes are required to privatize nationalised banks . During the current month Share prices of IOB jumped around 40 % and share prices of CBI have moved up 25 % over the rumours of privatization .
The newspaper reported the news yesterday and so far , finance Ministry or Niti Ayog have neither confirmed or rebutted the news .
NAMES OF BANKS FOR PRIVATIZATION IS FINALIZED BY NITI AYOG : MEDIA REPORTS
Dated 04.06.2021 : Newspapers , quoting PTI Reports , suggested that Niti Ayog has yesterday submitted the names of two public sector banks and one general insurance company for privatization in the current fiscal year 2021-22 to the Government of India .
Now as per procedure , a core committee of secretaries on disinvestment . has to submit the finalized names to the Alternative Mechanism (AM) for approval . Finally the cabinet headed by the Prime Minister has to give its approval . The Core Group of Secretaries consists of economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.
We may recall here that , FM Nirmala Sitharaman had announced , In the budget speech , about the privatization of two public sector banks in the present financial year along with IDBI Bank . With regard to employees objection for disinvestment , MOF had earlier advised that Banks would hold consultation with stakeholders and all the apprehensions would be allayed .
The government has a target of Rs 1,75,000 crores as receipts from disinvestment in the Financial year 2021-22 and it wants to disinvest its operating business in various sectors of economy including Transport , petroleum , banking and insurance to achieve its target . In her budget speech , FM had talked of monetizing BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22.
Dated 04.06.2021 : Newspapers , quoting PTI Reports , suggested that Niti Ayog has yesterday submitted the names of two public sector banks and one general insurance company for privatization in the current fiscal year 2021-22 to the Government of India .
Now as per procedure , a core committee of secretaries on disinvestment . has to submit the finalized names to the Alternative Mechanism (AM) for approval . Finally the cabinet headed by the Prime Minister has to give its approval . The Core Group of Secretaries consists of economic affairs secretary, revenue secretary, expenditure secretary, corporate affairs secretary, legal affairs secretary, Department of Public Enterprises secretary, Department of Investment and Public Asset Management (DIPAM) secretary and an administrative department secretary.
We may recall here that , FM Nirmala Sitharaman had announced , In the budget speech , about the privatization of two public sector banks in the present financial year along with IDBI Bank . With regard to employees objection for disinvestment , MOF had earlier advised that Banks would hold consultation with stakeholders and all the apprehensions would be allayed .
The government has a target of Rs 1,75,000 crores as receipts from disinvestment in the Financial year 2021-22 and it wants to disinvest its operating business in various sectors of economy including Transport , petroleum , banking and insurance to achieve its target . In her budget speech , FM had talked of monetizing BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22.

GOVERNMENT TO TRANSFER MANGEMENT OF IDBI BANK TO A NEW BUYER :
Dated 08.05.2021 : The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its in-principle approval on 05.05.2021 for strategic disinvestment along with transfer of management control in IDBI Bank Ltd. The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with RBI.
Government of India (GoI) and LIC together own more than 94% of equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd. through divesting its stake along with strategic stake sale envisaged by the Govt. with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policy holders.
This decision of LICs Board is also consistent with the regulatory mandate to it to reduce its stake in the Bank.
Government expects that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd. and shall generate more business without any dependence on LIC and Government assistance/funds. Further government wishes to use the proceeds to finance developmental programmes of the Government benefiting the citizens.
To read Press Release with regard to the news , CLICK HERE
Dated 08.05.2021 : The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, has given its in-principle approval on 05.05.2021 for strategic disinvestment along with transfer of management control in IDBI Bank Ltd. The extent of respective shareholding to be divested by GoI and LIC shall be decided at the time of structuring of transaction in consultation with RBI.
Government of India (GoI) and LIC together own more than 94% of equity of IDBI Bank (GoI 45.48%, LIC 49.24%). LIC is currently the promoter of IDBI Bank with Management Control and GoI is the co-promoter.
LIC’s Board has passed a resolution to the effect that LIC may reduce its shareholding in IDBI Bank Ltd. through divesting its stake along with strategic stake sale envisaged by the Govt. with an intent to relinquish management control and by taking into consideration price, market outlook, statutory stipulation and interest of policy holders.
This decision of LICs Board is also consistent with the regulatory mandate to it to reduce its stake in the Bank.
Government expects that strategic buyer will infuse funds, new technology and best management practices for optimal development of business potential and growth of IDBI Bank Ltd. and shall generate more business without any dependence on LIC and Government assistance/funds. Further government wishes to use the proceeds to finance developmental programmes of the Government benefiting the citizens.
To read Press Release with regard to the news , CLICK HERE
PRIVATIZATION MAY AFFECT RATINGS NEGATIVELY : ind.ra warns
Dated 25.03.2021 : In the budget speech , FM Nirmala Sitharaman had announced privatization of two public sector banks in the next financial year . However the government is yet to announce the names of the banks to be privatised . Now a leading rating agency has warned that the ratings of such privatised banks may be downgraded , as the privatised banks will not have sovereign backings for the long term bonds and Tier2 instruments issued by them and probability of default escalates .
India Ratings and Research (Ind-Ra) , a leading Indian rating agency has warned that the budget proposal to privatise two public sector banks (PSBs) could lead to material negative migration of the long-term issuer ratings (mapped to senior instrument such as infrastructure bonds) and the ratings on Tier 2 instruments of the identified banks . . The agency feels that the government may sell its shares in bulk , instead of divesting to the public . The rating agency says " The government have stated that banks would be privatised as opposed to divested, which suggests that it may be considering ceding majority shareholding as well as control of the identified banks. " . The agency believes ceding of control should make the proposal attractive for potential investors and may make it more viable to attract a large quantum of capital that this exercise may require.
Presently Ind-Ra has given a long-term issuer rating floor of IND AA- (for senior instruments and Tier 2 instruments) for the public sector banks , factoring in timely government’s’ intervention and hence minimal probability of default. The hybrid instruments (Additional Tier 1 instruments) however are rated based on the standalone profile (which factors in ordinary support from government for PSBs) as terms of these instruments could, under certain circumstances, prevent government support for servicing these instruments. Ind-Ra’s rating of AT1 instruments for weaker government banks could be multiple notches below the long-term issuer rating, factoring the inherent weakness of the institutions along with discretionary nature of the security which could impact its ability to service the instrument.
Earlier the government had sold majority stake in only one bank i.e., IDBI Bank Limited (IND A/Negative) to Life Insurance Corporation of India , who are holding majority stake now. Once the banks to be privatised are identified, the agency as per its criteria may place the ratings on a rating watch. Based on clarity on the final contours of transacted, the rating agency may take actual decisions .
Dated 25.03.2021 : In the budget speech , FM Nirmala Sitharaman had announced privatization of two public sector banks in the next financial year . However the government is yet to announce the names of the banks to be privatised . Now a leading rating agency has warned that the ratings of such privatised banks may be downgraded , as the privatised banks will not have sovereign backings for the long term bonds and Tier2 instruments issued by them and probability of default escalates .
India Ratings and Research (Ind-Ra) , a leading Indian rating agency has warned that the budget proposal to privatise two public sector banks (PSBs) could lead to material negative migration of the long-term issuer ratings (mapped to senior instrument such as infrastructure bonds) and the ratings on Tier 2 instruments of the identified banks . . The agency feels that the government may sell its shares in bulk , instead of divesting to the public . The rating agency says " The government have stated that banks would be privatised as opposed to divested, which suggests that it may be considering ceding majority shareholding as well as control of the identified banks. " . The agency believes ceding of control should make the proposal attractive for potential investors and may make it more viable to attract a large quantum of capital that this exercise may require.
Presently Ind-Ra has given a long-term issuer rating floor of IND AA- (for senior instruments and Tier 2 instruments) for the public sector banks , factoring in timely government’s’ intervention and hence minimal probability of default. The hybrid instruments (Additional Tier 1 instruments) however are rated based on the standalone profile (which factors in ordinary support from government for PSBs) as terms of these instruments could, under certain circumstances, prevent government support for servicing these instruments. Ind-Ra’s rating of AT1 instruments for weaker government banks could be multiple notches below the long-term issuer rating, factoring the inherent weakness of the institutions along with discretionary nature of the security which could impact its ability to service the instrument.
Earlier the government had sold majority stake in only one bank i.e., IDBI Bank Limited (IND A/Negative) to Life Insurance Corporation of India , who are holding majority stake now. Once the banks to be privatised are identified, the agency as per its criteria may place the ratings on a rating watch. Based on clarity on the final contours of transacted, the rating agency may take actual decisions .
AGITATION AGAINST BANK PRIVATIZATION TO INTENSIFY : UFBU
Dated 23.03.2021 : UFBU in a meeting held on 22nd , March 2021 at Kolkata has decided to intensify the agitation against bank privatization move by the government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . In the meeting it was decided to make preparations for undertaking intermittent strikes , prolonged strikes and indefinite strikes . Presently following action plans have been decided up on :
1. Collection of 5 crore signatures to hand over petition to the Prime Minister
2. To conduct awareness meetings for the members
3. Mass rallies , Dharnas , Seminars and workshops in the months of April to June 2021 .
4 . Nationwide strikes , intermittent stakes and prolonged strikes .
5. Strikes at short notices , if government decides on privatisation .
The dates and actual time table of strikes will be announced in upcoming circulars to the members .
UFBU thanked all their members for participating in the agitational programmes . It also various trade unions for supporting the plan of agitation and political parties for supporting their cause in parliament and outside .
Dated 23.03.2021 : UFBU in a meeting held on 22nd , March 2021 at Kolkata has decided to intensify the agitation against bank privatization move by the government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . In the meeting it was decided to make preparations for undertaking intermittent strikes , prolonged strikes and indefinite strikes . Presently following action plans have been decided up on :
1. Collection of 5 crore signatures to hand over petition to the Prime Minister
2. To conduct awareness meetings for the members
3. Mass rallies , Dharnas , Seminars and workshops in the months of April to June 2021 .
4 . Nationwide strikes , intermittent stakes and prolonged strikes .
5. Strikes at short notices , if government decides on privatisation .
The dates and actual time table of strikes will be announced in upcoming circulars to the members .
UFBU thanked all their members for participating in the agitational programmes . It also various trade unions for supporting the plan of agitation and political parties for supporting their cause in parliament and outside .
AGITATION AGAINST BANK PRIVATIZATION : FUTURE COURSE OF ACTION
Dated 20.03.2021 ; Employees of public sector banks have completed the first phase of their agitation plan as scheduled by them .
In the February month , after FM's announcement of privatization of two public sector banks in the next financial year , UFBU had chalked out an agitational plan which was as follows :
1. Day long Dharna on February 19th , 2021 in all state Capitals .
2. Relay Dharna in all states , Districts and towns between February 20th to March 10th 2021
3. 2 DAYS STRIKE CALL ON 15TH AND 16TH MARCH 2021 .
UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . Now the unions have completed their announced plan of agitation and members of the staff are awaiting for the next course of action , as there is status quo in the matter .
It is reported that UFBU has called a meeting of the apex body on 22nd , March 2021 at Kolkata to chalk out further course of action . In the mean time , Mr C.H Venkatachalam , General secretary of AIBEA has threatened the government , through a tweet , with more strikes to follow , if their demands are not considered. It is reported that some section of staff are demanding indefinite strike to further their cause .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatization of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions . Apart from bank employees , general insurance employees went on a day's strike on 17th March against privatization of one public sector insurance company . Employees of Life insurance corporation of India went on a day's strike on 18th , March against sale of shares of LIC of India .
Dated 20.03.2021 ; Employees of public sector banks have completed the first phase of their agitation plan as scheduled by them .
In the February month , after FM's announcement of privatization of two public sector banks in the next financial year , UFBU had chalked out an agitational plan which was as follows :
1. Day long Dharna on February 19th , 2021 in all state Capitals .
2. Relay Dharna in all states , Districts and towns between February 20th to March 10th 2021
3. 2 DAYS STRIKE CALL ON 15TH AND 16TH MARCH 2021 .
UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . Now the unions have completed their announced plan of agitation and members of the staff are awaiting for the next course of action , as there is status quo in the matter .
It is reported that UFBU has called a meeting of the apex body on 22nd , March 2021 at Kolkata to chalk out further course of action . In the mean time , Mr C.H Venkatachalam , General secretary of AIBEA has threatened the government , through a tweet , with more strikes to follow , if their demands are not considered. It is reported that some section of staff are demanding indefinite strike to further their cause .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatization of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions . Apart from bank employees , general insurance employees went on a day's strike on 17th March against privatization of one public sector insurance company . Employees of Life insurance corporation of India went on a day's strike on 18th , March against sale of shares of LIC of India .
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UNIFIED PAYMENT INTERFACE BHARAT BILL PAYMENT SYSTEM
BHIM APP AADHAR
e-INSURANCE Account ( eIA )
New Updated Article
TAX PLANNING FOR FY 2020-21 ( AY 2021-22 )
Comprehensive Article on Income tax changes in Rules, Rates , Slabs , Rebates and Estimation
CLICK HERE TO READ
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FOREIGNERS CAN OWN INDIAN INSURANCE COMPANIES NOW : NEW BILL
Dated 19.03.2021 : As per the Insurance Amendment bill 2021 , passed by Rajyasabha yesterday , Foreign investment in Indian insurance companies can go up to 74 % and there is no restriction on their ownership and control . The bill was introduced by minister of Corporate affairs Ms Nirmala Sitharaman . Presently there is a limit of 49 % . While permitting individual investment , the government may put additional terms 7 conditions for such investments .
However Minister has clarified that the individual insurance company may decide up on the level foreign investment participation within the overall limit of 74 % . The minister hoped that the bill will give impetus to growth of insurance business in India .
To read the original bill , CLICK HERE ( Courtesy : PRSINDIA.ORG )
Dated 19.03.2021 : As per the Insurance Amendment bill 2021 , passed by Rajyasabha yesterday , Foreign investment in Indian insurance companies can go up to 74 % and there is no restriction on their ownership and control . The bill was introduced by minister of Corporate affairs Ms Nirmala Sitharaman . Presently there is a limit of 49 % . While permitting individual investment , the government may put additional terms 7 conditions for such investments .
However Minister has clarified that the individual insurance company may decide up on the level foreign investment participation within the overall limit of 74 % . The minister hoped that the bill will give impetus to growth of insurance business in India .
To read the original bill , CLICK HERE ( Courtesy : PRSINDIA.ORG )
BANK STRIKE ON 15TH & 16TH MARCH STANDS : UFBU
12.03.2021 : United Forum of Bank Unions ( UFBU ) had announced, in February 2021 , of their agitation plan including strike call to their members against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The unions have now confirmed that they would go ahead with their earlier announced strike call on 15th & 16th , March 2021 , as they do not see any positive response from the government .
Now it is reported that strike call of bank unions and their agitation programme against privatization is getting wider support from other trade unions like Samyukta Kisan Morcha (SKM) and Central trade Unions (CTU) . They have extended their support and Will Observe Anti - Privatisation Day on 15th March.
As tomorrow 13th March is second Saturday and 14th March i Sunday , the banks will be closed effectively for 4 days from 13.03.2021 to 16.03.2021 . Though public can utilize ATM facilities provided banks , it is afraid that they may go dry before the end of these four days .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
12.03.2021 : United Forum of Bank Unions ( UFBU ) had announced, in February 2021 , of their agitation plan including strike call to their members against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The unions have now confirmed that they would go ahead with their earlier announced strike call on 15th & 16th , March 2021 , as they do not see any positive response from the government .
Now it is reported that strike call of bank unions and their agitation programme against privatization is getting wider support from other trade unions like Samyukta Kisan Morcha (SKM) and Central trade Unions (CTU) . They have extended their support and Will Observe Anti - Privatisation Day on 15th March.
As tomorrow 13th March is second Saturday and 14th March i Sunday , the banks will be closed effectively for 4 days from 13.03.2021 to 16.03.2021 . Though public can utilize ATM facilities provided banks , it is afraid that they may go dry before the end of these four days .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced , in her budget speech , about various measures that would be taken with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
BANK STAFF TO WEAR BLACK BADGE ON 22ND FEBRUARY : UFBU
Dated 19.02.2021 : United Forum of Bank Unions ( UFBU ) has asked all their members to wear Black badges on the Monday , 22nd February 21 in continuation of their agitation plan including strike call against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO .
2 days strike is scheduled on 15th and 16 th March 2021 .
Dated 19.02.2021 : United Forum of Bank Unions ( UFBU ) has asked all their members to wear Black badges on the Monday , 22nd February 21 in continuation of their agitation plan including strike call against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO .
2 days strike is scheduled on 15th and 16 th March 2021 .
BANK PRIVATISATION CRIETERION
Dated 19.02.2021 : In an interview with a journalist yesterday ( of ETV ) , the state Minister for Finance Mr Anurag Thakur reconfirmed that still identification of banks that are to be privatised yet to be finalised and no final decision has been taken .
CRIETERION FOR PRIVATISATION :
Elaborating on the criterion for privatisation , he laid down the process as follows " The NITI Aayog decides which are the high priority sector, which are the low priority sector, and which PSUs are to be taken for strategic sale. Then it comes to the department which decides which PSUs are to be taken for asset monetisation, how many shares of which PSU are to be sold, which PSU disinvestment will entail the transfer of management control etc. Then the government evaluates how much money it can get by disinvestment proceed which will be spent by the government for the social upliftment of the people. "
However in an another interview with other news channel ( ET ), he advised that there might not be buyers for sick banks and hence government has to chose right bank that attracts buyers .
EMPLOYEES CONCERNS :
With regard to employees objection for disinvestment , he advised that Banks would hold consultation with stakeholders and all the apprehensions would be allayed .
IMPLEMENTATION OF GOVERNMENT SCHEMES
With regard to government schemes suffering due to bank privatisation , he asserted that " There are several private sector banks that are ahead of public sector banks in the rollout of the government's social welfare schemes. "
CRIETERION FOR PRIVATISATION :
Elaborating on the criterion for privatisation , he laid down the process as follows " The NITI Aayog decides which are the high priority sector, which are the low priority sector, and which PSUs are to be taken for strategic sale. Then it comes to the department which decides which PSUs are to be taken for asset monetisation, how many shares of which PSU are to be sold, which PSU disinvestment will entail the transfer of management control etc. Then the government evaluates how much money it can get by disinvestment proceed which will be spent by the government for the social upliftment of the people. "
However in an another interview with other news channel ( ET ), he advised that there might not be buyers for sick banks and hence government has to chose right bank that attracts buyers .
EMPLOYEES CONCERNS :
With regard to employees objection for disinvestment , he advised that Banks would hold consultation with stakeholders and all the apprehensions would be allayed .
IMPLEMENTATION OF GOVERNMENT SCHEMES
With regard to government schemes suffering due to bank privatisation , he asserted that " There are several private sector banks that are ahead of public sector banks in the rollout of the government's social welfare schemes. "
BANK PRIVATISATION , RUMOURS AND EMPLOYEES
18.02.2021 : The news , rather rumours about bank privatisation is gathering storm on and off for last one year or so . Actually the idea of privatisation gathered strength after PJ Naik committee report of 2014 submitted to RBI . Further there is belief that the present government is having a favourable disposition about privatization and they want to get out of banking business . Though the successive governments wanted to come out of banking business , they need public sector banks to implement all their financial and other packages tailored for the benefit of rural people , poor people and common persons . Successive governments have utilsed the PSBs towards reaching their policy goals . It's a catch-22 situation for the government to privatise or not .
In 1969 , 14 banks were nationalised by the then government and another 6 in 1980 . There are presently 12 public sector banks after merger etc and the names of one or the another or more crops up in the media often now as candidates for privatisation . The writers of such news have there own logic for including a particular bank in the list like smallest PSB , mid -sized PSB , largest PSB , profit bank or loss banking bank . Till budget for Fy 21-22 , there was no confirmation or denial from the government side .
With the budget announcement by FM Ms Nirmala Sitharaman , it's confirmed now that two of the 12 public sector bank will be divested by the government in the financial year 2021-22 . As she has not announced any names so far , rumours or unofficial reports are being reported in the media about the names of the banks that are shortlisted .
Initially after the budget , unofficial reports suggested that large public sector banks Bank of Baroda and Punjab National Bank are being considered for sell-0ff . But a recent report , based on a Reuters story of unconfirmed talk by an official , suggested that 4 banks are shortlisted for privatisation . As per the Reuters report the four banks finalized are 1. Bank of Maharashtra 2. Bank of India 3. Central Bank of India and 4 . Indian Overseas Bank . However report by CNN -TV18 again claimed that no names are yet finalised .
Today again CMD of Bank of Mahrashtra emphasized that the matter is yet to be finalised .
The government has to take up various measures before actual disinvestment . They have to bring necessary amendments in banking law to accommodate privatisation . They have to decide on the modus operandi of the sale . Whether to sell to a strategic buyer ( like in AIR iNDIA case ) or transfer to another public sector entity ( like what they did to IDBI Bank via LIC ) or sale of shares to public to reduce the government share to an nominal level . Still picture is not clear .
Whichever bank is going to be privatised in the next financial year , uncertainty is looming large on the employees of all banks . With their future uncertain , the morale of the staff will come down along with efficiency . Banks may defer their financial plan also waiting for the government announcement . Decisions at the higher level may also get deferred by the senior executives in the absence of the future plans . It's better government clears the names at an early date so that performance of the banks do not go down-hill during the intervening period .
Whatever may the banks that are going to be privatised , the staff and officers of all banks represented through UFBU are opposing the move of privatisation . They have already announced their agitation plans which will start from tomorrow . We have to wait and see how far the agitation will be able to alter the government plan in the matter .
We will be reporting the developments .
In 1969 , 14 banks were nationalised by the then government and another 6 in 1980 . There are presently 12 public sector banks after merger etc and the names of one or the another or more crops up in the media often now as candidates for privatisation . The writers of such news have there own logic for including a particular bank in the list like smallest PSB , mid -sized PSB , largest PSB , profit bank or loss banking bank . Till budget for Fy 21-22 , there was no confirmation or denial from the government side .
With the budget announcement by FM Ms Nirmala Sitharaman , it's confirmed now that two of the 12 public sector bank will be divested by the government in the financial year 2021-22 . As she has not announced any names so far , rumours or unofficial reports are being reported in the media about the names of the banks that are shortlisted .
Initially after the budget , unofficial reports suggested that large public sector banks Bank of Baroda and Punjab National Bank are being considered for sell-0ff . But a recent report , based on a Reuters story of unconfirmed talk by an official , suggested that 4 banks are shortlisted for privatisation . As per the Reuters report the four banks finalized are 1. Bank of Maharashtra 2. Bank of India 3. Central Bank of India and 4 . Indian Overseas Bank . However report by CNN -TV18 again claimed that no names are yet finalised .
Today again CMD of Bank of Mahrashtra emphasized that the matter is yet to be finalised .
The government has to take up various measures before actual disinvestment . They have to bring necessary amendments in banking law to accommodate privatisation . They have to decide on the modus operandi of the sale . Whether to sell to a strategic buyer ( like in AIR iNDIA case ) or transfer to another public sector entity ( like what they did to IDBI Bank via LIC ) or sale of shares to public to reduce the government share to an nominal level . Still picture is not clear .
Whichever bank is going to be privatised in the next financial year , uncertainty is looming large on the employees of all banks . With their future uncertain , the morale of the staff will come down along with efficiency . Banks may defer their financial plan also waiting for the government announcement . Decisions at the higher level may also get deferred by the senior executives in the absence of the future plans . It's better government clears the names at an early date so that performance of the banks do not go down-hill during the intervening period .
Whatever may the banks that are going to be privatised , the staff and officers of all banks represented through UFBU are opposing the move of privatisation . They have already announced their agitation plans which will start from tomorrow . We have to wait and see how far the agitation will be able to alter the government plan in the matter .
We will be reporting the developments .
CONTRADICTORY REPORTS ON SHORTLISTING OF PSBS FOR PRIVATIZATION :
Dated 16.02.2021 : Multiple news reports , based on a Reuters story , had suggested that the Government had short-listed four Public Sector Banks ( PSB ) for the purpose of privatization . However latest CNN TV -18 report of today suggests that the government officials have denied any finalization in the matter yet .
In the budget speech , FM Nirmala Sitharaman had announced privatization of two public sector banks in the next financial year . As per the Reuters report the four banks finalized are 1. Bank of Maharashtra 2. Bank of India 3. Central Bank of India and 4 . Indian Overseas Bank . Out of the four banks , it is said that two will be privatized during FY 21-22 ( as announced by FM in the budget ) and the other two will be taken up in the subsequent year .
NEWS SOURCE : Economic Times wrote in the report that the " two officials ( of Government of India ) told Reuters on condition of anonymity as the matter is not yet public. " . South based news paper Deccan Herald reported " The actual privatisation process may take 5-6 months to start, as per the government sources "
EMPLOYEES CONCERNS : The move , if implemented , is going to affect more than 1 lakh bank employees including 50,000 staff in Bank of India , 33,000 in Central Bank of India , 26,000 in Indian Overseas Bank and 16,000 in Bank of Maharashtra .
United Forum of Bank Unions ( UFBU ) has already announced their agitation plan including strike call against the government's move . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . They have called for 2 days strike in the month of March 21 .
SHARE PRICES : News has caused 10 % rise in Bank of India's share prices to Rs 65.20 , 15 % rise in Indian Overseas Bank 's share prices to Rs 12.55 , 19% rise in Bank of Maharashtra 's share prices to Rs 19.05 and 11 % rise in Central Bank of India 's share prices to Rs 15.65
Government has neither confirmed nor denied the reports so far .
Dated 16.02.2021 : Multiple news reports , based on a Reuters story , had suggested that the Government had short-listed four Public Sector Banks ( PSB ) for the purpose of privatization . However latest CNN TV -18 report of today suggests that the government officials have denied any finalization in the matter yet .
In the budget speech , FM Nirmala Sitharaman had announced privatization of two public sector banks in the next financial year . As per the Reuters report the four banks finalized are 1. Bank of Maharashtra 2. Bank of India 3. Central Bank of India and 4 . Indian Overseas Bank . Out of the four banks , it is said that two will be privatized during FY 21-22 ( as announced by FM in the budget ) and the other two will be taken up in the subsequent year .
NEWS SOURCE : Economic Times wrote in the report that the " two officials ( of Government of India ) told Reuters on condition of anonymity as the matter is not yet public. " . South based news paper Deccan Herald reported " The actual privatisation process may take 5-6 months to start, as per the government sources "
EMPLOYEES CONCERNS : The move , if implemented , is going to affect more than 1 lakh bank employees including 50,000 staff in Bank of India , 33,000 in Central Bank of India , 26,000 in Indian Overseas Bank and 16,000 in Bank of Maharashtra .
United Forum of Bank Unions ( UFBU ) has already announced their agitation plan including strike call against the government's move . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . They have called for 2 days strike in the month of March 21 .
SHARE PRICES : News has caused 10 % rise in Bank of India's share prices to Rs 65.20 , 15 % rise in Indian Overseas Bank 's share prices to Rs 12.55 , 19% rise in Bank of Maharashtra 's share prices to Rs 19.05 and 11 % rise in Central Bank of India 's share prices to Rs 15.65
Government has neither confirmed nor denied the reports so far .
BANK UNIONS ANNOUNCE PROTEST AND STRIKE PROGRAMME AGAINST PRIVATISATION :
09.02.2021 : United Forum of Bank Unions ( UFBU ) has announced their agitation plan including strike call against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The decision was taken at a meeting of the constituents held today in Hyderabad .
The programme is as follows :
1. Day long Dharna on February 19th , 2021 in all state Capitals .
2. Relay Dharna in all states , Districts and towns between February 20th to March 10th 2021
3. 2 DAYS STRIKE CALL ON 15TH AND 16TH MARCH 2021 .
UFBU also announced support to the agitating farmers in the capital .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced yesterday various measures with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
Source : IBEA CIRCULAR
09.02.2021 : United Forum of Bank Unions ( UFBU ) has announced their agitation plan including strike call against the privatization of public sector banks and other measures taken by the Central government . UFBU is an umbrella body of 9 Bank unions AIBEA, AIBOC, NCBE, AIBOA, BEFI, INBEF, INBOC, NOBW and NOBO . The decision was taken at a meeting of the constituents held today in Hyderabad .
The programme is as follows :
1. Day long Dharna on February 19th , 2021 in all state Capitals .
2. Relay Dharna in all states , Districts and towns between February 20th to March 10th 2021
3. 2 DAYS STRIKE CALL ON 15TH AND 16TH MARCH 2021 .
UFBU also announced support to the agitating farmers in the capital .
We may recall here that Finance Minister Ms Nirmala Sitharaman had announced yesterday various measures with regard to government owned financial institutions including privatisation of two public sector banks , IDBI and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
Source : IBEA CIRCULAR
BANK UNION TO AGITATE AGAINST PRIVATISATION :
02.02.2021 : Finance Minister Ms Nirmala Sitharaman had announced yesterday various measures with regard to government owned financial institutions including privatisation of two public sector banks and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
The leading trading union All India Bank Employees Association ( AIBEA ) has issued circulars against the moves of the government and has decided to mobilise agitations the government . In this direction , it has called up on its member to join " National Protest Day " organised tomorrow 03.02.2021 by various like minded unions in other industries like CITU , INTUC , AICTU and SEWA .
The protest day is being organised against scrapping of laboor codes , privatisation etc .
02.02.2021 : Finance Minister Ms Nirmala Sitharaman had announced yesterday various measures with regard to government owned financial institutions including privatisation of two public sector banks and one General insurance company . She had also announced taking up of shares sales of Life Insurance Corporation of India , another public sector undertaking . She had also announced setting up of a bad loan bank to take over NPAs of the public sector bank . However these moves have not gone well with the bank employees and their unions .
The leading trading union All India Bank Employees Association ( AIBEA ) has issued circulars against the moves of the government and has decided to mobilise agitations the government . In this direction , it has called up on its member to join " National Protest Day " organised tomorrow 03.02.2021 by various like minded unions in other industries like CITU , INTUC , AICTU and SEWA .
The protest day is being organised against scrapping of laboor codes , privatisation etc .
FM ANNOUNCES BANK PRIVATIZATION PLANS IN THE BUDGET 2021 :
02.02.2021 : 02.02.2021 : Finance Minister Ms Nirmala Sitharaman has proposed , in her budget proposal , to privatise 2 Public Sector banks, one general insurance company in FY22
02.02.2021 : 02.02.2021 : Finance Minister Ms Nirmala Sitharaman has proposed , in her budget proposal , to privatise 2 Public Sector banks, one general insurance company in FY22
IDBI BANK IS NOW A PRIVATE SECTOR BANK
Dated 15.03.2019 : As Life Insurance Corporation of India ( LIC ) is holding 51 % of equity shares of IDBI Bank , Reserve Bank of India has now designated IDBI Bank as a private sector bank with effect from 21.01.2019 vide press release dated 14.03.2019 .
For Press Release , CLICK HERE
Dated 15.03.2019 : As Life Insurance Corporation of India ( LIC ) is holding 51 % of equity shares of IDBI Bank , Reserve Bank of India has now designated IDBI Bank as a private sector bank with effect from 21.01.2019 vide press release dated 14.03.2019 .
For Press Release , CLICK HERE
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