Bank privatization is unlikely to harm the national interest and financial inclusion drive: FM Sitharaman Nirmala.

Concerns that the privatization of state-owned banks will harm financial inclusion and the interests of the country were allayed by Finance Minister Nirmala Sitharaman on Tuesday. In terms of financial inclusion, she claimed that the 1969 bank nationalization had not produced the expected outcome. Speaking to students at the Diamond Jubilee Valedictory Lecture at the Delhi School of Economics (DSE), University of Delhi, she stated that while nationalization aided in promoting government programs and priority sector lending, public sector banks were rendered unprofessional by government oversight. She added, "After... we professionalized the banks, those objectives are still being beautifully achieved," despite the fact that the goals were not fully accomplished during the 50 years of nationalization. Therefore, it is false to believe that the goal of reaching everyone and bringing banking to everyone will be lost if you attempt to make them more professional and decide to privatize them, which is a Cabinet decision. She recalled that earlier abuse of public sector banks had led to balance sheet degradation. It took us almost six years after Prime Minister Narendra Modi assumed office to address the double balance sheet issue, as you may have heard in 2012–2013. In terms of asset quality, NIM, lending and deposit growth, and financial inclusion, I can now declare with confidence that our Indian banks are exceptional," she remarked. "Every objective of the national interest and also the banking interest, will be served," she emphasized, when banks are permitted to operate professionally and board decisions are made. In January 2019, as part of the privatization process, the government sold Life Insurance Corporation of India (LIC) its 51 percent controlling stake in IDBI Bank. Following that, LIC and the government announced plans to sell their interest in IDBI Bank strategically. In order to privatize IDBI Bank, both shareholders encouraged investors to express interest (EoI) in October 2022 by selling a 60.72 percent stake. This comprises 30.24 percent of LIC and 30.48 percent of the Indian government. After inviting EoIs in October 2022, the DIPAM received several EoIs for IDBI Bank in January 2023. The reclassification of Life Insurance Corporation as a public stakeholder from promoter of the bank upon completion of strategic divestment in the institution was authorized by Sebi in August 2025, paving the way for the sale of IDBI Bank. In addition, public sector banks were consolidated by the government.