Millennium Post

Govt plans to cut stake in PSBs to 52%, may get Rs 89,120 cr

Minister of State for Finance Jayant Sinha told the Lok Sabha the government is ‘considering’ to bring down its equity in the state-owned banks as it would reduce budgetary requirement for capitalisation of public sector banks.

‘The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks,’ he said in a written reply to the upper House of Parliament.

Sinha further said ‘the reduction of government share in equity capital of public sector banks to 52 per cent will enable mobilisation of Rs 89,120 crore approx on the basis of current market price on 21 November’.

There are about two dozen public sector banks and government holding in them is between 56.26 per cent to 88.63 per cent.

The government has infused an amount of Rs 58,600 crore since 2011 in these public sector banks.
Public sector banks require equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms. For the current fiscal, the government has allocated Rs 11,200 crore for bank capitalisation. As per existing law, government holding in public sector banks cannot fall below 51 per cent.

Following the report, shares of public sector banks hogged limelight, surging as much as 8 per cent. SBI’s scrip surged 5.10 per cent to settle at Rs 321.45, becoming the top gainer among 30-Sensex stocks.

Shares of PNB jumped 7.92 per cent, Canara Bank (7.67 per cent), Bank of Baroda rallied 7.23 per cent, UCO Bank (6.01 per cent), Bank of India (5.44 per cent) and Central Bank (2.51 per cent). 
Next Story
Share it