Congress Opposes Reduction of Government's Stake in Public Sector Banks

The Congress party has strongly opposed any reduction of the Union government's stake in 12 public sector banks below 51%. They argue that past mergers in the banking industry were accepted because the government's stake was maintained. The party recalls Indira Gandhi's pivotal role in nationalizing banks 55 years ago, emphasizing its positive impact on India's economy.

The Congress party announced on Friday that it will vehemently oppose any attempt to reduce the Union government's stake in 12 public sector banks to below 51% both within Parliament and in public forums.

The party highlighted that past mergers in the banking sector over the last seven years had been broadly accepted because the government retained a majority stake. Congress general secretary in-charge of communications, Jairam Ramesh, noted the historic significance of bank nationalization initiated by then prime minister Indira Gandhi 55 years ago.

Ramesh emphasized that the nationalization had a transformative impact on lending for agriculture, rural development, and other priority sectors, asserting that public sector institutions have been beneficial during global financial crises. He listed several bank mergers and reiterated that any dilution of the government's stake would face strong resistance.

(With inputs from agencies.)