The government plans to merge four state run banks and then sell 51% of its stake in the new merged bank. Why not sell 100% stake and divest all bank shares? The banks are a drain on government funds, and the government does not need to be present in the banking sector except as a regulator. Even the PM’s Jan Dhan Yojana does not require you to open an account with a state run bank. A private bank will do the job nicely.
The four banks in question are bleeding money. Their combined net losses were over Rs. 21,000 crore (> US $3 Billion) in the year ending March 31, 2018. If the losses keep piling up and divestment is not done quickly, we will end up in with a situation similar to what’s happening with the Air India sale – no buyers!