Stocks

Central Bank, IOB jump on privatisation buzz

Our Bureau Mumbai | Updated on November 24, 2021

However, PSU banks say they have not received any communication

Shares of the Central Bank of India (CBoI) and Indian Overseas Bank (IOB) jumped on Wednesday on reports that the government would privatise them. CBoI’s shares closed at ₹22.70 apiece, up 10.46 per cent over the previous close. IOB’s shares ended at ₹22.45 apiece, up 13.10 per cent over the previous close.

This movement in the stock price of CBoI and IOB came in the wake of the government deciding to introduce the Banking Laws (Amendment) Bill, 2021, to pave the way for the privatisation of two public sector banks (PSBs).

In a clarification to the exchanges, CBoI said, “...We do not have any information on privatisation of the bank as on date. There is no such negotiation/ event taking place at the level of Central Bank of India.”

IOB, in its clarification to the exchanges, said, “We have not received any communication regarding privatisation of Bank from Department of Financial Services/ Government of India and we are unaware of the reasons for the sudden movement in stock price. It may be due to speculation.”

In her Union Budget 2021-22 speech, Finance Minister Nirmala Sitharaman had said, “…Other than IDBI Bank, we propose to take up the privatisation of two Public Sector Banks and one General Insurance company in the year 2021-22.”

Against bank privatisation

Meanwhile, the All India Bank Officers’ Confederation (AIBOC) has launched a campaign to mobilise public opinion against bank privatisation. “Bank privatisation will weaken the security of Bank deposits, squeeze credit flow to farmers, small businesses & weaker sections, and exclude poor & rural customers from banking,” said Soumya Datta, General Secretary, AIBOC.

Referring to the move to bring in Banking Laws Amendment Bill, Devidas Tuljapurkar, General Secretary, Maharashtra State Bank Employees Federation, said, Bank employees under the aegis of the United Forum of Bank Unions will come out with organisational programmes including a series of strikes to discourage the government from privatising PSBs.

Published on November 24, 2021

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