Privatising PSBs: Ex-RBI Guv suggests 10-yr road map

New Delhi: Former RBI governor D Subbarao has suggested that the government should come up with a 10-year road map for privatisation of all Public Sector Banks (PSBs) as it would provide much needed predictability to stakeholders.

Subbarao further said that the big bang approach to privatisation of state-owned banks is not desirable but at the same time the issue should not be put on the back burner. "Ideally, we should have a road map, maybe over a 10 year timeframe, to privatise all PSBs. "That will give much needed predictability to all stakeholders," he said. Meanwhile, Subbarao said the government should also be thinking about corporatisation of public sector banks so that they come within the umbrella of uniform RBI regulation.

In the Union Budget for 2021-22, the government announced its intent to take up the privatisation of two PSBs in the year and approved a policy of strategic disinvestment of public sector enterprises. The government think-tank NITI Aayog has already suggested two banks and one insurance company to the Core Group of Secretaries on Disinvestment for privatisation. According to Subbarao, the impact on the Indian economy of privatisation of PSBs will be in two ways.