To privatise or not? Key questions answered on shedding govt stake in PSB

There is a growing consensus in favour of the move, but strengthening governance and widening the ambit of acceptable investor groups are critical to its success

Privatisation of public sector banks (PSBs) may soon be a reality if news reports are anything to go by. Four important questions, though, have emerged ever since discussions around this began in May this year. Is privatisation necessary; can it be a success; if yes, how should it be approached; and, finally, who should control these banks? 

The answer to the first question is a straightforward yes. Stating that bank nationalisation has served its purpose, Duvvuri Subbarao, former governor, Reserve Bank of India (RBI), said, “The economic scenario has changed. It's now time to move on and privatise public sector