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EconomyRBI discussing privatisation of public sector banks with Centre

RBI discussing privatisation of public sector banks with Centre

The RBI is committed to using all policy tools to support the economic recovery while preserving price stability and financial stability, Das emphasized

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The Reserve Bank of India (RBI) is in discussion with the government over the privatisation of public sector banks, governor Shaktikanta Das said on 25 March, A news agency reported. The process “will go forward”, the governor said.

He made the comments while delivering the inaugural address at the India Economic Conclave (IEC) 2021 underway in Delhi.

These comments come in reference to the union government’s plan to privatise public sector banks. It was proposed during the budget speech by finance minister Nirmala Sitharaman on 1 February as part of the efforts to revive the economy which is reeling under the impact of the Covid-19 pandemic. The government is aiming to generate Rs 1.75 lakh crore through the disinvestment drive.

The proposal has met with major criticism and protests by bank unions and various opposition leaders. Earlier on 15 and 16 March, the United Forum of Bank Union, an umbrella body of nine bank unions, called a two-day nationwide strike against the privatisation of public sector banks.

In a hopeful note, Das amid the surge in Covid-19 cases in the country, Das said that India’s revival of economic activity is expected to be “unabated”, despite a rise in infections in many areas. He said that though the surge is a matter of concern, 2022 growth projections might not need to be cut. “Our preliminary analysis shows that the growth rate next year, that is, at 10.5%, which we had given, would not require a downward revision,” the RBI chief said.

The RBI governor spoke about crypto currency and said that the central bank has flagged “major concerns to the government.” “It is still under examination, the government will come out with a decision on it,” the RBI chief said.

The RBI is committed to using all policy tools to support the economic recovery while preserving price stability and financial stability, Das emphasised.

Admitting that the spike in new pandemic infections is a matter of concern, the governor said the country is equipped this time to tackle the situation. The country added 53,476 Covid-19 cases on 24 March alone, marking the highest daily rise since October last year.

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