Bank Privatisation Not in One Go

The government may not fully exit from the two state-run banks that are to be privatised and instead retain atleast a 26% stake for the first few years. A senior official said the extent of the stake sale will depend on interest from investors and market conditions.

The government will introduce a bill in the winter session of Parliament to make the changes needed before privatising the two banks. The Central Bank of India and Indian Overseas Bank have reportedly been shortlisted by Niti Aayog for disposal. However, a final decision is yet to be taken.

“The upcoming bill clear decks for regulatory approvals required for privatisationof two PSBs (Public Sector Banks) but we may like to retain some stake and dilute it at a later stage,” the official said, reasoning that the governing may like to cash in on the upside in valuation after the stake sale.

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