Central Bank of India & Indian Overseas Bank Shortlisted for Privatization

After a long waiting, the government has hinted to privatize Public Sector Central Bank of India and Indian Overseas Bank. The Centre has shortlisted Central Bank of India (CBI) and Indian Overseas Bank (IOB) for divestment, CNBC Awaaz has reported. The two state-run banks might see 51 percent sale in the first phase of disinvestment. Both the IOB and CBI are currently under the Prompt Corrective Action (PCA) framework imposed by the Reserve Bank of India (RBI). Under the PCA framework, the central bank imposes certain business restrictions on lenders with weak financial metrics. 

Further the news channel reported that, the government will amend the Banking Regulations Act, and some other banking laws for divestment. 

Also Read - What are the Problems in Public Sector Bank Privatization ?

Till time the Bankers Union or affiliated unions of these banks has not announced any agitation against the proposed privatization.

The weak financial metrics of lenders like CBI and IOB could lead to unexpected hurdles in the government's plan to privatise the lenders.