2 Bank Privatization Announcement: Know Pros and Cons of
Recently, the Government of India has directed to privatize 2 banks of India. These banks will be Central Bank of India and Indian Overseas Bank, whose approximately 51% stake will be sold. People have their own beliefs about this, some people are telling it right and some people are telling it wrong. Today you will know what are the benefits of privatization of the bank and what are the disadvantages India may have to face.
First let’s know a little about the banks and also the condition of the country.
Indian Finance Minister Nirmala Sitharaman had arranged for financial year 2021-22 May to raise money by disinvesting banks. And in a recent meeting, Central Bank of India and Indian Overseas Bank have been shortlisted. Under which about 51% stake of these 2 banks will be sold in the market.
Some such doubts arise in the mind of the people like. Should the government do business or not? The government does not want to do business, so the government is doing privatization. Will India benefit or harm by disinvesting banks, know it in detail.
When the government does a business, its goal is not to focus on profit but on social service. But if that business is done by a private person then he focuses on profit and not social service. Read this: 51% of 2 Bank will be Privatized, Central Govt. Announced
Advantage of Privatization Bank
To expand Business (Pros): Government can also do privatization to make the business bigger.
Improve Infrastructure (Pros): To improve the infrastructure of the bank. To increase the quality of service, because due to the arrival of private sector, competition increases, due to which they have to increase the quality.
Price Normal (Pros): Because by doing privatization the competition increases, due to which the price has to be normalized.
With the advent of privatization, security is tightened. Because their goal is to earn profit, more attention is given to work.
Development in Sector (Pros): With the advent of privatization, technology is improved so that profits can be increased. And due to the improvement in technology, there is a very rapid development in that sector.
Disadvantage of Privatization Bank
Because it has now gone into the hands of the private, so some losses will also be seen here.
Focus on Profit not in Social Welfare (Cons): More focus of the bank will be on those people where the bank can earn more profit. Because its goal is to earn profit and not to do social welfare. After privatization, the benefits do not reach every section of the society equally.
Price Increases (Cons): The service is improved and boosted, due to which the price increases.
Privatization in India in 1991 had benefited a lot in India.
In 1991, Finance Minister of India, Dr. Manmohan Singh had taken big decisions, due to which the country had benefited a lot. There can be many benefits of privatization such as the possibility of investment coming from abroad increases. The focus of the government becomes less in those work where they privatize, due to which the government can focus on the core work.
However, even today people are standing on both sides in its opposition and in favor regarding privatization. Privatization has become a topic of debate on which there is always debate.