Bank of Maharashtra, Indian Overseas Bank (IOB), UCO Bank, Central Bank of India and Punjab and Sindh Bank are the five banks in which the government is going to sell its stake. The government has taken this decision under the minimum public shareholding (MPS) norms of market regulator SEBI.
Bank of Maharashtra, Indian Overseas Bank (IOB), UCO Bank, Central Bank of India and Punjab and Sindh Bank are the five banks in which the government is going to sell its stake. The government has taken this decision under the minimum public shareholding (MPS) norms of market regulator SEBI. After the government’s decision, the government’s stake in these banks will be reduced to less than 75 percent. So far four out of 12 banks have already done so. Whereas in the current financial year, three more banks have reduced their stake to minimum 25 percent. Now the remaining five public sector banks have to meet the MPS norms of SEBI, for which a plan is being made.
Why is the government reducing its stake?
Plans are being made to reduce the government’s stake in five public sector banks, including Bank of Maharashtra, Indian Overseas Bank (IOB) and UCO Bank, to below 75 per cent to comply with SEBI’s minimum public shareholding (MPS) norms. Financial Services Secretary Vivek Joshi gave this information on Thursday. Of the total 12 public sector banks (PSBs), four have already complied with the public shareholding norms by March 31, 2023. According to Joshi, in the current financial year, three more PSBs have completed the compliance of minimum 25 percent public shareholding. The remaining five public sector banks have prepared action plans to meet the MPS norms.
How much stake does the government hold in which bank?
At present, the government’s stake in Delhi-based Punjab and Sindh Bank is 98.25 percent. Government’s stake in Chennai’s Indian Overseas Bank is 96.38 percent, in UCO Bank 95.39 percent, in Central Bank of India 93.08 percent, in Bank of Maharashtra 86.46 percent. According to the Securities and Exchange Board of India (SEBI), all listed companies are required to comply with public shareholding rules. However, the regulator has given special exemption to public sector banks. They have time till August 2024 to meet the rule of 25 percent public shareholding. Joshi said banks have several options to dilute stake, including follow-on public offering (FPO) or qualified institutional placement. He said that depending on the market situation, each of these banks will take a decision in the best interest of the shareholders.
When will the work be completed
Without giving any deadline, he said that efforts are on to fulfill this requirement. Joshi said the Finance Ministry has directed all PSBs to review their gold loan portfolio as cases of non-compliance with regulatory norms have come to the notice of the government. The Department of Financial Services (DFS) has written a letter to the heads of public sector banks asking them to look into their systems and procedures related to gold loans.
