Govt may not privatise PSBs in FY21 over low valuations, high NPAs: Report
Four public sector banks are under the RBI’s Prompt Corrective Action framework, which puts many restrictions on them, including on lending, management compensation and directors’ fees.
migrator
New Delhi
So, it does not make any business sense to sell these lenders, IOB, Central Bank of India, UCO Bank and UBI, as there will not be any suitors for them from the private banking space, the sources said. The Centre will refrain from distress sale of its entities, especially if they are in strategic sectors, they added. Hardly any public sector bank has gone for stake dilution in the last many years as valuations have been depressed, sources said, adding the government stake in some PSBs has gone past 75 pc due to successive capital infusions for meeting mandatory regulatory ratios. The COVID-19 has not only halted the recovery process but it is going to have an adverse impact on financial health of private sector banks too, they said.
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