Government Plans to Reduce Stake in Four Public Sector Banks to 25%

The Central Government is preparing to reduce its shareholding in four public sector banks to comply with the Securities and Exchange Board of India (SEBI) rules on minimum public shareholding. According to the supplied report, the banks under consideration are Central Bank of India, UCO Bank, Punjab & Sind Bank and Indian Overseas Bank. The government currently holds 81.19% of Central Bank of India, 90.95% of UCO Bank, 93.85% of Punjab & Sind Bank and 92.44% of Indian Overseas Bank. SEBI rules require listed companies to maintain at least 25% public shareholding.

According to an Economic Times report cited in the supplied information, the government plans to increase public ownership in these banks over the coming year, potentially through Qualified Institutional Placements (QIPs) or Offers for Sale (OFS). However, the banks have reportedly asked the Finance Ministry to extend the deadline by another year, citing challenging market conditions and the difficulty of selling a large volume of shares at once. The proposed stake reduction is not intended to mean privatisation; it is aimed at meeting public shareholding requirements. The sales could generate revenue for the government and provide retail investors with more opportunities to invest in these banks. The final timeline and sale procedures have yet to be announced.