Govt should sell all its stake in PSU banks, insurers,

 Billionaire investor Prem Watsa has suggested that the Indian government completely exit the public sector banks it was privatising for them to attract investors.

Hyderabad-born Watsa is the founder and chairman of the $53-billion Toronto-based investment giant Fairfax Financial Holdings. He was responding to questions about the government's plan for the privatisation of IDBI Bank and two other lenders and also one insurance company, during an exclusive interaction with ET.

"My recommendation is that they sell 100% of public sector banks and insurance companies that they are privatising. Foreign investors and foreign banks will be encouraged by this and they will come in and implement the innovation needed. So, why do you need the 10% or 20% that the government owns," Watsa said.

The Union Cabinet had cleared a proposal to sell the government's entire stake in IDBI Bank in July last year. However, the government's disinvestment secretary, Tuhin Kanta Pandey, recently alluded to a change of thinking, suggesting the possibility of retaining a residual stake.