According to a government source, the Union Finance Ministry is looking to sell minority stake in four state-owned banks: Punjab & Sind Bank, Indian Overseas Bank, UCO Bank and Central Bank of India.
Union Finance Ministry is considering selling minority shares in four banks
This decision aims to comply with public shareholding regulations Prescribed by the Securities and Exchange Board of India (SEBI).
The ministry will take specific action after getting permission from the cabinet.
Government-owned businesses have been exempted from Sebi’s requirement that listed corporations maintain a minimum 25% public shareholding (MPS) till August 2026.
Government stocks in four banks
According to the Bombay Stock Exchange (BSE), the government now holds large shares in four banks: about 93% in Central Bank of India, 95.4% in UCO Bank, 98.3% in Punjab and Sind Bank and 96.4% in Indian Overseas Bank.
Following changes in the Securities Contracts (Regulation) Rules in 2010, SEBI’s MPS requirements mandate that listed companies hold at least 25% of their shares in a public company.
The deadline for central public sector firms and financial institutions to comply with MPS standards was extended to August 2026 by a July 2024 amendment to the statute by the central government.
According to a notification from the Finance Ministry, public sector businesses with less than 25% public shareholding have been excluded from deregulation under Rule 19A of the Securities Contracts (Regulation) Rules, 1957, till August 1, 2026. This gives them time to fulfill their needs.
No more bank mergers
In May 2024, it was reported that the Center is not currently considering the merger of public sector banks as they now want to move ahead with the goal of privatizing public sector banks.
Therefore, the government will not merge these banks, but will privatize them. They are planning to start work on this scheme from the beginning of financial year 2025. Since 2017, about 15 banks have merged in the country and with this there were 27 public sector banks which have now reduced to 12.
But, the government will not merge them in its new plan, rather it is making a new plan to strengthen and facilitate the banking sector.
