|FM Arun Jaitley|
IT may not go down well among tens of millions of employees of the public sector banks with finance minister Arun Jaitley on November 9 saying that the government is planning to bring down...its stake in PSU banks to 52 percent so as to meet Rs 3 lakh crore capital requirement.
According to law, government holding at any moment must not come below 51 percent to maintain the public sector character of PSU banks.
Jaitley was speaking at India Global forum. Arun Jaitley opened the two-day India Global Forum meeting, beginning from November 9 in New Delhi.
The government shareholding in various banks varies between 56.26 percent ( Bank of Baroda) and 88.63 percent (Central Bank of India). Government has 58.62 percent stake in leading bank State Bank of India.
In 2010, the then UPA Government gave its nod for a proposal to keep the minimum shareholding of government to 58 percent in the public sector banks in order to provide buffer for the future.
As per law, government holding at any moment must not come below 51 per cent to maintain the public sector character of PSU banks.
PSBs need equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms. For the current fiscal, the government has allocated Rs 11,200 crore for bank capitalisation.
The government had infused an amount of Rs 58,600 crore between 2011 and 2014.
Jaitley in the Budget speech had outlined that "to be in line with Basel-III norms there is a requirement to infuse Rs 2,40,000 crore as equity by 2018 in our banks. To meet this huge capital requirement, we need to raise additional resources to fulfil this obligation".While preserving the public ownership, the capital of these banks will be raised by increasing the shareholding of the people in a phased manner through the sale of shares largely through retail to common citizens of this country, the minister had said.