Centre should privatise all PSBs, except State Bank of India: NCAER Nikunj Ohri July 11, 2022 https://www.business-standard.com/article/finance/centre-should-privatise-all-psbs-except-state-bank-of-india-ncaer-122071101472_1.html First 2 banks for privatisation should be those with good asset quality and low NPA, says the report authored by NCAER’s Poonam Gupta and economist Arvind Panagariya
The report suggests that the first two banks chosen for privatisation should be the ones with the highest returns on assets and equity, and the lowest NPAs in the last five years.
It also said that the PSBs with lower government ownership would be easier to privatise. This is because the first two banks chosen for privatisation should set an example for the success of future privatisations. The markets must see value in the chosen banks to attract two or more buyers.
NCAER also makes a case for corporate ownership in banks with due diligence as there is “scarcity” of potential large-scale investors in banks. The government must allow foreign investors, including foreign banks and domestic investors, as well as corporate houses to enter the auctions with due diligence, the report said.
“Any potential risk associated with corporate ownership or foreign banks may be minimised by letting a consortium of corporations enter the bidding with the stake of any single corporation capped. It would ring-fence the Indian banking operations of a foreign firm through appropriate regulation and supervision,” it added.