Following the fraudulent transactions worth Rs 11,400 crore detected at Punjab National Bank (PNB), Finance Minister Arun Jaitley has ruled out privatisation of public sector banks (PSBs) and said that the move may not find political consensus. He also said that a lot of people have started talking of privatisation in the outcome of the PNB fraud. He pointed out that the issue of bank privatisation involves a large political consensus and also involves an amendment to the law (Bank Nationalisation Act).
Noting that recapitalisation of PSBs over the last decade had little impact on improving their health, the Federation of Indian Chambers of Commerce and Industry (FICCI) called for their privatisation in the interest of creating a dynamic banking sector in the country. FICCI President Rashesh Shah had met the Finance Minister and asked him to begin the process of bank privatisation in a phased manner, leaving just 2-3 lenders in the public sector.
Besides, Industry body, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) had also demanded that the government to reduce its stake in banks to less than 50 percent so that they can work with the sense of accountability and with the interest of stakeholders and depositors on priority. Moreover, the Confederation of Indian Industry (CII) had urged the government to surrender its majority control of banks and allow them to function like private sector lenders.