Days after the NITI Aayog shortlisted the names of the public sector banks to be privatised in the current fiscal as part of the disinvestment process, the government think tank has suggested that the employees of these nationalised banks be given job protection for a year, according to an exclusive report by Bloombergquint.

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The proposal to give job protection to employees of the public sector banks put up for privatisation has already been forwarded to the Union Ministry of Finance, which will take the final call, the report mentioned.

Finance Minister Nirmala Sitharaman, in her Union Budget speech for 2021-22, had said the government will privatise two state-run banks. Subsequently, bank unions had slammed the government's plans to divest stake in public sector banks. In fact, the United Forum of Bank Union even staged a two-day nationwide strike in March this year against the announcement.

On the other hand, the central government wants the funds it currently uses to recapitalise the state-owned banks with huge non-performing asset (NPA) burden, to be utilised for public welfare and infrastructural development.

However, Nirmala Sitharaman recently said the interests of workers of banks which are likely to be privatised "will absolutely be protected."

Meanwhile, Fitch Ratings said on June 7 the government’s plan to privatise banks may face hurdles due to the pandemic. It is to be noted that the names of the banks that are likely to be privatised have not been revealed by the government yet.

Reportedly, the government had come up with a similar idea to safeguard the employees of Air India (AI), which has also been put up for privatisation. According to reports, the government is likely to add a clause making it mandatory for the new AI owner to retain the entire staff of the national carrier for one year after the completion of the sale.

(Edited by : Shoma)