Explore PPP Model In PSBs

The government could explore the public-private partnership (PPP) arrangement for public sector banks, by inducting a private sector bank as a strategic partner in the former in a transparent manner. In an annexure to a document prepared by the Finance Ministry, Uday Kotak, MD and CEO, Kotak Mahindra Bank, suggested that the strategic partner could hold a 26 per cent stake in the PSB and the government could cap its holding at below 40 per cent, with the aggregate holding of the two entities being below 65 per cent.

“Deployment of talent from private sector at arm’s length into the above joint venture, combined with best of the governance practices, should be a part of the conditions.

“This PPP model has the opportunity of bringing the best of processes of public sector with enterprise of the private sector and can lead to dramatic re-rating of the value of government ownership going forward,” said Kotak in his suggestion titled, ‘Out of the Box’.