PSU Banks in focus on privatisation buzz: Bank of Maharashtra, BoI jump 20%, up 40% in 2 days

The economic structure in India has been undergoing a phase of recovery post the Pandemic situation which completely disrupted the economic equilibrium in the country damaging the trade balance of payment, causing disequilibrium in the functioning of the banking institutions and subsequent credit operations leading to a large scale malfunction in the growth and diversification in the industrial environment and economic operations in the country. The economic indicators reported that the country faced its longest duration of recession with the overall GDP plummeting to a contraction of 23%. 

However, recovery has been initiated with market indications showing and predicting that India would emerge as the fastest growing economy with a GDP of close to 10%. This analysis has boosted up the market sentiments and the Central and State Governments in the country have taken up measures to generate financial productivity through rational usage of banking infrastructures.

Privatization of Public Sector Undertaking Banks has been responsible for recording a major increase in the Nifty PSU Index with the growth sentiment recording an increase of 5.5%. The Government has shortlisted four major public sector commercial banks to privatize in the coming weeks among which are Bank of Maharashtra, Bank of India, Indian Overseas Bank, and Central Bank of India. The aforementioned banking institutions have seen a record surge of 17-20% in share prices in the stock exchanges thereby boosting economic indicators and showing significant growth in the functioning variables of the economy.

Government Authorities have however informed that they would continue to hold a majority stake in the State Bank of India since it is the largest credit operating public banking institution in the country and Is extremely useful in leveraging credit facilities in the country and bringing about organizational changes in the banking structure.

Thus banking authorities have introduced regulatory measures to introduce financial liquidity in the economic environment.


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