Nirmala Sitharaman Says Bank Privatization Will Not Harm National Interest

PSU bank shares have seen a strong rally in the stock market over the past few days, and this momentum could continue to gain steam. Finance Minister Nirmala Sitharaman has made a major statement regarding the privatization of public sector banks. A few days earlier, news agency Reuters quoted sources to say that the central government may hike foreign direct investment or FDI limit in PSU banks to 49 percent. Following this speculation, heavy buying was seen in several stocks, including SBI, Punjab National Bank, Bank of Baroda, and Canara Bank.

In this context, Finance Minister Nirmala Sitharaman stated that privatization of public sector banks will not impact financial inclusion and national interest. She stated that the nationalization of banks in 1969 had not yielded the desired results as far as financial inclusion is concerned.

Addressing students at the Diamond Jubilee closing ceremony of the Delhi School of Economics, University of Delhi, she stated that bank nationalization helped advance government programs, but government control has rendered public sector banks unprofessional. She stated that more than 50 years have passed since the nationalization of banks, but the objectives for which they were nationalized have not been fully achieved.