The Hindu Business Line : Panel backs Govt stake in SBI lower at 51%

The Standing Committee on Finance has endorsed the proposal in the State Bank of India (Amendment) Bill, 2006, to bring down the statutorily prescribed minimum shareholding of the Reserve Bank of India (now the Union Government) in SBI to 51 per cent from the current level of 55 per cent.

Currently, the Centre holds 59.73 per cent stake in SBI, which is the country’s largest commercial bank. The Centre had in June this year acquired the entire shareholding of the RBI in SBI.

In its report tabled in the Lok Sabha on Thursday on the State Bank of India (Amendment) Bill, 2006, the Standing Committee on Finance has also endorsed the proposal to allow SBI to infuse capital by issuance of preference shares and also by way of private placement.

However, the Committee has noted that the policy guidelines specifying the terms and conditions for issuance of preference shares should be fair and transparent.

“The committee also expects that the meaning as well as the nature of rights exercisable by preference shareholders be clearly defined in the general regulations applicable to the State Bank so as to leave no scope for ambiguity on the rights exercisable by preference shareholders vis-À-vis the rights of equity shareholders of the bank or, any possible dichotomy with the provisions/regulations relating to issuance of preference shares in terms of the provisions of the Companies Act,” the report added.

Three Members of Parliament — Mr Rupchand Pal, Mr Laxman Seth and Mr Moinul Hassan — have given dissent notes on the Committee’s move to endorse the proposal in the Bill to bring down the statutorily prescribed minimum shareholding in SBI to 51 per cent from the existing 55 per cent.

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