NITI Aayog has directed the government to privatize three public sector banks. These banks are Punjab and Sindh Bank, UCO Bank and Bank of Maharashtra. The instructions also suggest merger of all rural banks. There is also talk of giving more concessions to NBFCs.
Earlier this week, there were reports that the government may merge the loss-making India Post into rural banks. After this a new public sector bank will be created, which will make up for the deficit. The Indian government plans to privatize more than half of the public sector banks.
There is a plan to reduce their number to five. This could start with the sale of shares by Bank of India, Central Bank of India, Indian Overseas Bank, UCO Bank, Bank of Maharashtra and Punjab & Sind Bank. Meanwhile, on Wednesday, PM Modi held a meeting with the heads of banks and NBFCs and discussed measures to bring the banking sector back on track.