Close on the heels of her remarks on the privatisation of banks in India, Union Finance Minister, Nirmala Sitharaman, on Thursday repeated her call for more foreign-based banks to enter the Indian finance space, saying the country “needs big and world-class banks”.
At the 12th SBI Banking and Economics Conclave 2025 in Mumbai on November 6, the minister said the government is in talks with the Reserve Bank of India (RBI) and other lenders in this regard.
“Government is looking at this and work has already commenced. We are discussing with the RBI. We are discussing with banks,” she said, adding that lenders should deepen and widen credit flow to the industry so that GST rate cut-driven demand would unleash a virtuous investment cycle.
The finance minister also emphasised that infrastructure creation remains the government’s main focus, and capital expenditure has increased fivefold in the last decade.
The Centre’s bank privatisation exercise had begun in January 2019, when it sold its controlling 51 per cent stake in the IDBI Bank to Life Insurance Corporation of India (LIC). Subsequently, both the government and LIC announced plans for the strategic sale of their stake in the IDBI Bank.
Also Read: India poised to become world’s third-largest economy: Sitharaman
In October 2022, both shareholders invited EoI (Expression of Interest) from investors for privatising the IDBI Bank by selling a total of 60.72 per cent stake, which included a 30.48 per cent stake of the government and 30.24 per cent of LIC.
In January 2023, the DIPAM received multiple EoIs for the IDBI Bank, which paved the way for SEBI to approve the reclassification of Life Insurance Corporation as a public shareholder from promoter of the bank in August, 2025, on completion of strategic divestment in the lender.
Consequently, the government also undertook consolidation of public sector banks, the biggest of which comprised four major mergers of public sector banks in August 2019. In 2017, it had already brought down their total number to 12 from 27.
In 2019, Dena Bank and Vijaya Bank were merged with the Bank of Baroda, prior to which, the government had merged five associate banks of SBI and Bharatiya Mahila Bank with the State Bank of India.
Effective April 1, 2020, the United Bank of India and the Oriental Bank of Commerce were merged with the Punjab National Bank.
Similarly, the Syndicate Bank was merged with the Canara Bank; and the Allahabad Bank was amalgamated with the Indian Bank. The Andhra Bank and Corporation Bank were consolidated with the Union Bank of India.
Follow us
