According to a report prepared by the National Council of Applied Economics (NCAER) research on the privatization of all Public sector Banks (PSBs), the center should privatize all the PSBs except the State Bank of India (SBI) for the good functioning and benefits.
National Council of Applied Economics (NCAER): Report on SBI
The report is prepared by NCAER members including Director-General Poonam Gupta who is also a member of the Economic Advisory Council to the Prime Minister and Arvind Panagariya who is a professor at Columbia University and former Vice President of NITI Aayog
A report named ‘Privatization of Public Sector Banks in India: Why, How and How Far?’ said that the officials proposed the case of privatization applies to all PSBs including SBI. However, they support that for Indian economic structure and political procedures, the government would want to have at least one PSB in its portfolio. So, keeping this point in mind and the size and relatively better performance of SBI, the officials propose that all the PSBs should be privatized except SBI for now.
Further, the report said that the government should start privatization actions by choosing two strong banks. The officials suggested the government choose two strong banks for the start of privatization which will lead a path to privatization of all 11 PSBs and set an example for the success of future privatization processes.
The banks which may be chosen should be the ones with the highest returns on equity and assets and with the lowest NPAs in the last five years.
However, according to the plans of the government, two weak banks are most likely to be privatized.
