NITI Aayog has asked Govt to sell three PSU banks as part of privatization push, and merge India Post with rural banks to create India’s 2nd biggest network of Govt bank after SBI. As part of the privatization push, and improve efficiency of the Govt machinery, Niti Aayog has suggested that three Govt banks should be sold to private companies.These three banks are: Punjab & Sind Bank, UCO Bank and Bank of Maharashtra. However, selling Govt banks to private entities is not a easy task, and there exists several legal hurdles.
To start with, some major amendments to the Banking Companies (Acquisition and Transfer) Act of 1970 needs to be implemented. NITI Aayog has also suggested for speedy implementation of Data Accountability And Transparency Act, which has been recommended by Comptroller and Auditor General (CAG). Ministry of Statistics and Programme Implementation (MoSPI) can also be revamped, so that Govt can take better financial decisions.
NITI Aayog has made another very critical suggestion: Merge India Post with regional rural banks or RRBs, and thereby created India’s 2nd biggest bank after SBI. Once this is done, India Post’s 15 lakh postal outlets can transform into bank branches, and thereby expand their outreach and impact. As per the suggestions put forth, India Post and Rural Regional Banks across India will be merged, and will become part of a holding company, which will be controlled by Govt.