On Thursday, the Department of Investment and Public Asset Management (DIPAM) invited expression of interest (EoI) for appointment of an advisor to create this proposed fund.
"After the successful CPSE ETF and later Bharat 22 ETF, we will launch a financial sector ETF," DIPAM sources said.
In 2018-19, the government raised Rs 18,729.85 crore through Bharat 22 ETF in two tranches. It raised another Rs 26,350 crore through Central Public Sector Enterprises (CPSE) ETF.
In the current fiscal, the government has raised Rs 2,350 crore against a huge disinvestment target of Rs 90,000 crore for the current fiscal. In 2018-19, it raised Rs 84,972.16 crore as disinvestment proceeds against the budgeted target of Rs 80,000 crore.
Over the last five fiscal years, public sector banks (PSBs) have been recapitalised to the extent of Rs 3.19 lakh crore, with infusion. The state lenders have been recapitalised with infusion of Rs 2.5 lakh crore by the government and mobilisation of over Rs 66,000 crore by PSBs themselves.
Officials said public sector banks growth potential could drive their shares value while for insurance companies there will be slow approach in inclusion as they are financially not so strong at the moment.
The government is looking to merge Oriental, National and United Insurance into one entity.
New India Assurance is listed in 2017 separately. The rest three are unlisted.
( With inputs from IANS )