Dr. Subbarao is the former RBI governor, and he said that India should come up with a ten-year road map for the privatization of all PSBs. The clear roadmap will provide the needed predictability to the stakeholders, and he also said that the big bang approach for privatization of the state-owned banks is not desirable.
He added that the government should also think about the corporatization of the public sector banks so that they will come under the umbrella of uniform RBI regulation. The union budget for the 2021-22 government announces its intent to take up the privatization of the two PSBs. it also approves the policy of the strategic disinvestment of public sector enterprises.
The impact of the privatization of PSBs will be seen in the next two days on the Indian economy. He also believed that the cost-benefit calculus of privatization would be positive. The government merged about 10 nationalized banks into the large four ones in 2020. They also brought down the number of the PSBs to just 12.
The former RBI governor observed that the current development stage of India should use the other instrument to pursue the social objective instead to continue to place a burden on the bank depositors and the borrowers.
- Who is the former governor of the RBI?
Ans. D Subbarao
- What is the full form of the PSBs?
Ans. Public Sector Banks
- How many nationalized banks merged in 2020?