Money & Banking

No decision on bank privatisation, Insurance PSUs merger put on back-burner

BL New Delhi Bureau | Updated on: Feb 07, 2022
Nirmala Sitharaman

Nirmala Sitharaman

Junior Minister in the Finance Ministry Bhagwat Karad said in a written reply in Lok Sabha said that the govt has not yet decided on the banks that are to be privatised

The Finance Ministry on Monday said a decision is yet to be taken on the privatisation of the Public Sector Banks. At the same time, merger of three public sector general insurance companies has been put off.

Junior Minister in the Finance Ministry Dr Bhagwat Karad said in a written reply in Lok Sabha said that as per inputs received from the Department of Investment and Public Assets Management (DIPAM), the government has not yet decided on the banks that are to be privatised. “The amendments to the relevant Acts are required to be done before initiating the process of privatisation,” he said.

Finance Minister Nirmala Sitharaman, in her budget speech of FY2021-22, had announced that two of the public sector banks would be privatised. She had also announced that a bill will be introduced. However, this bill is yet to be listed for introduction in the Parliament. It seems strong protests from the employee unions and elections in five States have stopped the process.

Meanwhile, Karad said that the government has received representations from the bank unions wherein they have expressed their views and concerns on the matter of privatisation of banks. Further, “DIPAM has informed that the representations with regard to strategic divestment of CPSEs and banks received from various stakeholders including the employee’s unions from time to time are duly examined as per the extant disinvestment policy of the government,” he said.

Merger of general insurance companies

Finance Minister in her budget speech for the FY2018-2019 announced the government’s intent to merge three public sector general insurance companies, viz., National Insurance Company Limited, United India Insurance Company Limited and Oriental Insurance Company Limited.

In a written response to another question, Karad said that from time to time, associations of employees of public sector general insurance companies submit their demands of their employees and suggestions for strengthening them. The suggestions received have included suggestions in respect of the merger of these companies.

“Against this background and upon further consideration of the matter, the government subsequently decided to infuse capital, focus on their growth and not to proceed with merger,” he said.

Non-filers of the Income Tax returns

Karad’s colleague and anther Junior Finance Minister Pankaj Chaudhary said in a written reply that the Non-filers Monitoring System (NMS) project was implemented from 2013 onwards to prioritise action on non-filers with potential tax liabilities. In last two cycles of NMS viz. NMS-9 and NMS-10 pertaining to flagging of non-filers for the assessment year 2019-20 and 2020-21, a total of 40,17,235 cases have been flagged, out of these 10,69,186 taxpayers have filed returns and a total of ₹ 7,318.65 crore has been collected as Self-Assessment Tax.

Haircut

In response to another question, Chaudahry said in a written reply that as on December 31, 43 large corporate debtors, each with total admitted claims of ₹2,500 crore and above, were resolved through the market-driven corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

These corporate debtors (CD) owed a total of ₹5.44-lakh crore to financial creditors while their liquidation value was ₹1.06-lakh crore. Further, realisable value for financial creditors through the approved resolution plans was ₹1.91-lakh crore, which is 179 per cent of the liquidation value of these corporate debtors, and 35 per cent of the admitted claims.

Published on February 07, 2022
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