Govt may not privatise PSBs in FY21 over low valuations, high NPAs: Report

The government will refrain from distress sale of its entities, especially if they are in strategic sectors

Privatisation of any public sector bank (PSB) during the current fiscal is very unlikely due to their low valuations and mounting stressed assets amid the COVID-19 crisis, sources said.

Four public sector banks are under the RBI's Prompt Corrective Action (PCA) framework, which puts several restrictions on them, including on lending, management compensation and directors' fees.

So, it does not make any business sense to sell these lenders -- Indian Overseas Bank (IOB), Central Bank of India, UCO Bank and United Bank of India -- as there will not be any suitors for them from the private banking space, the sources said.

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