Central Bank of India, Indian Overseas Bank close sharply higher on disinvestment buzz, banks deny having knowledge on the matter

Central Bank of India and Indian Overseas Bank closed Wednesday up to 13% higher following media reports that the government has shortlisted these banks for disinvestment.

Both the banks denied having any information on the matter.

Share prices of Indian Overseas Bank closed the day 13% higher at Rs 22.45 on BSE after touching an intra-day high of 23.80. Central Bank of India shares rose 10.5% at Rs 22.70 at the end of Wednesday’s trade, off from intraday high of Rs 23.65.

“We do not have any information on privatization of the bank as on date. There is no such negotiation/event taking place at the level of the Central Bank of India,” the bank said in regulatory filing to the stock exchanges.

Indian Overseas Bank also said that it had not received any communication regarding privatization from the government. “We are unaware of the reasons for the sudden movement in stock price. It may be due to speculation,” the bank said.

Both the state-owned lenders made this regulatory disclosure at the market hours.

The Reserve Bank of India has recently lifted business restrictions under the prompt corrective action framework from Indian Overseas Bank while Central Bank of India is still under the regulatory curb.

Finance minister Nirmala Sitharaman announced in the Union Budget that two public sector banks would be privatised this financial year without giving specific names. LIC-owned IDBI Bank is also expected to be disinvested this fiscal.

Among public sector lenders, Bank of India and Bank of Maharashtra could also be candidates for privatisation, as per previous media reports.

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