The Finance Ministry is expected to initiate preparation next month for diluting Government’s stake in State Bank of India.
The Government currently holds 58.60 per cent and there are reports that 5 per cent could be diluted.
When asked about preparing the draft Cabinet note for stake dilution, Financial Services Secretary, G S Sandhu, said: “Next month after Parliament session is over.”
However, he clarified that a formal decision at the ministerial level is yet to be taken on stake sale. Sandhu was talking to reporters on the sideline of Canara Bank’s event.
At Friday’s closing price of Rs 2,561.45, 5.6 per cent or 4.18 crore shares could fetch around Rs 10,700 crore, but a staggered sale could bring much more.
Basel III norms
SBI and 19 nationalised banks need over Rs 2.4 lakh crore by 2018 to meet Basel III norms, while the budget has proposed Rs 11,200 crore to be infused in public sector banks during the current fiscal.
Since the requirement is very high , the budget had proposed raising money through selling shares to public, especially retail investors. However, in any case, shareholding of the Government will not come below 51 per cent.
Jaitley’s assurance
Earlier, addressing the 108 years celebration of Canara Bank, Finance Minister, Arun Jaitley, put forth the Government’s stand on recapitalisation for meeting the Basel-III norms.
“We suggested proposal for recapitalisation of public sector banks over the next four years…the government is also treating this as a very high priority item.”
More capital will help banks to expand, which in turn will help in expanding financial inclusion. Jaitley said that financial inclusion needs to expand rapidly so that remaining 42 per cent of unbanked population could be brought into the system.
To mark the occasion of 108th anniversary, the Finance Minister launched 108 financial inclusion branches, 108 ATMs, 1,008 cash acceptance machines and a dedicated marketing platform for the MSME (Micro, Small and Medium Enterprises).