The what, why & how of bank privatisation

The government must continue to own a few big banks to address market failures.

Bank trade unions have taken to the streets, protesting privatisation of two public sector banks (PSBs).

In May 2014, just a fortnight before the Bharatiya Janata Party-led National Democratic Alliance (NDA) government took over, a committee of the Reserve Bank of India (RBI), headed by P J Nayak, recommended incorporation of a bank investment company to take the PSBs out of direct government ownership. A few legislative changes were required for setting up such a company. Now, those legislative changes will be done to privatise two PSBs. Finance Minister Nirmala Sitharaman has already crossed the Rubicon. The public sector banking