The central government is preparing to sell some of its shares in four public sector banks of the country. These include the names of UCO Bank, Central Bank of India, Punjab and Sindh Bank and Indian Overseas Bank. The government wants the stake of common investors in these banks to increase.
Business News: Government's stake in four public sector banks of the country may be reduced. The central government is considering selling some shares of UCO Bank, Central Bank of India, Punjab and Sindh Bank and Indian Overseas Bank. The government is trying to reduce its stake in these banks to 75 percent and the remaining shares should be with common investors.
However, no date has been fixed yet for selling the shares. The government will first look at the condition of the stock market. After this it will be decided how many shares of which bank will be sold and what will be their price. At present, discussions are going on regarding preparations to sell stake in all four banks.
Why does the government want to sell shares of banks?
Under the minimum public shareholding rules of stock market regulator SEBI, at least 25 percent of the shares in listed companies must be held by public investors. These include retail as well as institutional investors. At present the government has more than 75 percent stake in these four banks. In such a situation, to increase the stake of public investors, the government will have to sell some of its shares or banks may have to issue new shares.
Government companies were given exemption till August 2026 to follow this rule. Now there is a possibility of extending this deadline. According to media reports, the government wants to increase the public shareholding of these banks in the next one year.
How much stake will be reduced in Central Bank of India?
The current stake of the government in Central Bank of India is about 81.19 percent. To bring it to 75 percent, a reduction of about 6.19 percentage points will have to be made. The government has already sold about 8.08 percent shares of this bank through offer for sale in May 2026. The government got about Rs 2,266 crore from that sale.
After this its stake reduced to 81.19 percent. Now another step may be required to achieve the prescribed limit of public shareholding in the bank.
Government holds 90.95 percent shares in UCO Bank
The central government's stake in UCO Bank is about 90.95 percent. To reduce it to 75 percent, the share will have to be reduced by about 15.95 percentage points. For this, the government can adopt the route of Offer for Sale (OFS). The bank also has the option of raising capital through Qualified Institutional Placement (QIP). However, final information regarding how many new shares the bank will issue and how many shares the government will sell has not been revealed yet.
There is a need to reduce maximum stake in Punjab and Sindh Bank.
Among the four banks, the government has the highest stake in Punjab and Sindh Bank. The Center holds about 93.85 percent shares in this. If the government stake is brought to 75 percent, it will have to be reduced by about 18.85 percentage points. This would be the biggest proposed cut among the four banks. The impact of this news can be seen on bank shares. However, the actual impact of any sale will depend on its price, the number of shares available in the market and investor demand.
Reduction of 17.44 percentage points possible in Indian Overseas Bank
The government holds about 92.44 percent stake in Indian Overseas Bank. To reach public shareholding to 25 percent, government stake will have to be reduced by about 17.44 percentage points. Here also the government can sell shares depending on the market conditions. At present, no specific sale date or offer price has been announced for the bank.
Increasing government stake to 75 percent does not mean privatization. If this stake remains, the control of the banks will remain with the government. However, the government is also considering the possibility of merger and restructuring of public sector banks. Earlier, the names of Central Bank of India and Indian Overseas Bank were revealed by NITI Aayog as possible privatization candidates.