Hinting at major banking sector reforms in the offing, Finance Minister Arun Jaitley on Sunday said the country is not at a stage where the government can completely exit its holding in the 27 public sector banks.
“There are a series of banking reforms which I am likely to announce…in the days to come, you may find something on that,” said Jaitley, who will present the Union Budget on 29 February.
Speaking at the CNN Asia Business Forum 2016 during the Make in India Week here, Jaitley said, “I don’t think India has reached a state where the state can pull out of banking altogether.”
Public-sector banks are required because they perform a major role in financial inclusion through their geographical reach, Jaitley said.
The government had last year announced the ‘Indradhanush’ programme to revamp the state-run banks. It has already put in place steps to professionalise their management. The government is committed to zero interference, and keeping an arms-length from these banks and letting the institutions run professionally, Jaitley said, adding “we have erred in the past on this”.