New Delhi: In a seeming contrast to disinvestment in other PSUs, the government is considering a proposal to increase its stake in select public sector banks (PSBs) where it holds close to the regulatory requirement of 51%.

The government may hike stake in banks where it has close to 51% as part of recapitalization scheme, official sources said.

However, the ministry has to decide as to how to increase the government’s holding in the banks, sources said, adding, if the Centre’s stake goes up it would provide banks headroom to raise capital by diluting stake in future.

One of the options being considered for the purpose is issue of Perpetual Non-cumulative Preference Shares (PNCPS), sources said.

There are six public sector banks where the government holding is less than 55%. Those who fall in the category include Bank of Baroda, Oriental Bank of Commerce, Andhra Bank, Dena Bank, IDBI Bank and Vijaya Bank.

The Centre’s holding in Bank of Baroda stands at 53.8%, Oriental Bank of Commerce 51.1% while in case of Andhra Bank, it is 51.6%.

IDBI Bank, Dena Bank and Vijaya Bank, the government holding is 52.7%, 51.2% and 53.9% respectively.