The Indian government is considering a proposal to slash its stakes in some public sector banks to 33% in phases, Business Standard newspaper reported.
The first step in this direction is a proposal to set up a holding company in next two years. According to the report, the Bank Investment Company will replace the proposed Bank Boards Bureau.
"Privatisation is definitely on the agenda, else we would not have talked about the Bank Investment Company," an undisclosed official told Business Standard.
"The Bank Investment Company will require legislative changes. We will still control the Bank Investment Company, but it need not control 51% in public sector banks. Rather it could control 33%," the official revealed.
The publication said that the bureau will be an interim mechanism till the Bank Investment Company comes into being.
The proposed Bank Board Bureau, which will be functional from 1 April 2016, will be responsible to select heads of public sector banks and help them develop strategies to raise capital. It would also guide banks on mergers and consolidations.