Cut down govt equity to 52%, FinMin tells state-owned banks

The move is aimed to incorporate best corporate practices among these banks.

The Finance Ministry has asked the government-run banks to cut down the government’s equity to 52 per cent, a top official was quoted as saying by PTI. 
 
The move is aimed to incorporate best corporate practices among these banks.
 
“The government is essentially a major shareholder. So, this need to be aligned to the best corporate practices. The shareholding needs to come down to at least 52 per cent in the first phase. As and when market condition allows, banks will take step in that direction. They have all the permission in hand,” Financial Services Secretary Rajiv Kumar told PTI.
 
Some of the public sector banks have government’s holding beyond 75 per cent, and dilution of government stake will help banks to meet 25 per cent public float norms of Sebi. 
 
As per other reports, the State Bank of India (SBI) will sell shares worth Rs 20,000 crore, which will help dilute government stake from the existing 58.53 per cent. Other public sector banks (PSBs) are also in the process to sell government shares to private parties.
 
Kumar said the government has also initiated the process for consolidation of Regional Rural Banks (RRBs) to better serve the needs of the rural India. 
 
Effective January 1, Punjab Gramin Bank, Malwa Gramin Bank and Sutlej Gramin Bank were merged into a single RRB (Regional Rural Bank).
 
Source: Businessline, media reports

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