Finance ministry may ask Sebi to extend public float deadline for PSBs
Latest News »
- Narendra Modi, Amit Shah to monitor performance of BJP-ruled states
- Mosque amidst temples in Ayodhya was built by Babar’s commander: Shia Waqf Board
- Before Vishal Sikka exit, mutual funds had hiked Infosys share holdings
- Shrikant Purohit’s bail triggers war of words between Congress, BJP
- US Navy orders ‘operational pause’ after USS John S. McCain collision
New Delhi: The finance ministry may request capital market regulator Securities and Exchange Board of India (Sebi) to extend the August deadline for PSBs to meet 25% public float norm as it mulls various options to pare government stake in state-run banks.
There are seven public sector banks (PSBs), including United Bank of India, Indian Bank, Bank of Maharashtra and Central Bank of India, where the government holding is above 75%. Post second round of capital infusion in March, the government stake in some more banks could go beyond 75%.
As per guidelines of the Sebi, government stake in PSUs should be 75% or less by August 2017.
"Effort is there to meet the Sebi’s public float guidelines but in case some banks are unable due to market condition, then we will approach the regulator seeking exemption from minimum public shareholding (MPS) requirement of 25% in those cases," a finance ministry official said.
There are still five months to go and various options are on the table, like public offer and selling stake to LIC, the official added. There are four PSU banks where government holding is more than 80%, while it is between 75-80% in three lenders as of December 2016.
Government holding in United Bank of India is at 88.72%, followed by Indian Bank (82.10%), Bank of Maharashtra (81.61%), Central Bank of India (81.28%), Punjab and Sind Bank (79.62%), Indian Overseas Bank (79.56%) and Uco Bank (76.67%).
There is also the option of creating a structure like the special national investment fund (SNIF), another official said, adding this is not under consideration at present but if need be, it could be looked at to meet the MPS norm.
The government has approved setting up of special national investment fund to help sick PSUs. The fund is maintained outside the Consolidated Fund of India.