Govt will cut down its stake in PSU banks to 52%: Jaitley
Finance Minister Arun Jaitley on Sunday said the government is planning to bring down its stake in public sector banks to 52 per cent so as to meet Rs 3 lakh crore capital requirement.
‘We are also trying to bring down the governmental equity in the banks to about 52 per cent so that a large amount of capital, almost closing to Rs 3 lakh crore, can be introduced into banks itself, so that they have a lot more resources for financial inclusion,’ he said.
In 2010, the then Cabinet had approved a proposal to keep the minimum shareholding of government to 58 per cent in the public sector banks in order to provide buffer for the future. As per law, government holding at any moment must not come below 51 per cent to maintain the public sector character of PSU banks.
At present, government shareholding in various banks varies between 56.26 per cent ( Bank of Baroda) and 88.63 per cent (Central Bank of India). 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. The government had infused an amount of Rs 58,600 crore between 2011 and 2014.
Finance Minister Arun Jaitley in the Budget speech had said that ‘to be in line with Basel-III norms there is a requirement to infuse Rs 2,40,000 crore as equity by 2018 in our banks. To meet this huge capital requirement we need to raise additional resources to fulfil this obligation’.
While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, the minister had said. Hinting that amendments to the Goods and Services Tax (GST) may be introduced in the ensuing Winter session of Parliament, Jaitley said the government was in the final stages of talks with states on the issue. ‘I am in the last stage of my discussion with the states on the eve of Parliament session before introducing the amendments to the GST law in Parliament,’ Jaitley said at the India Global Forum meeting here.
The month-long Winter Session of Parliament is scheduled to commence on 24 November. Seeking support from the opposition parties, especially Congress, in passing the key legislation, Jaitley said they should realise that the ‘merits of some of these actions have positive attitude towards them’. ‘I do hope that my friends in the Opposition parties, particularly the principal Opposition, after a wasted opportunity when they were in government, spend a more fruitful tenure when they are in opposition,’ Jaitley said.
The Goods and Services Tax (GST) regime aims at subsuming most of the indirect taxes at the central as well as state level. The UPA government in 2011 introduced a Constitution Amendment Bill in the Lok Sabha to pave the way for introduction of GST.
The GST rollout has missed several deadlines because of lack of consensus among states over certain crucial issues on the new tax regime.