Government to cut stake in Public Sector Banks to 52% to fetch Rs 89,120 crore Also Read - Mega Bank Mergers Working Smoothly Amid COVID-19: AIBEA

New Delhi, Nov 28: The government is planning to bring down its stake in public sector banks to 52 per cent, which can fetch the exchequer Rs 89,120 crore. Minister of State for Finance Jayant Sinha told the Lok Sabha the government is “considering” to bring down its equity in the state-owned banks as it would reduce budgetary requirement for capitalisation of public sector banks (PSBs). Also Read - Loan Sanctions Jump to Rs 5.95 Crore in Just Over 2 Months, Says Sitharaman

“The step would substantially reduce the requirement of budgetary provision for infusion of capital in public sector banks,” he said in a written reply. Sinha further said “the reduction of government share in equity capital of PSBs to 52 per cent will enable mobilisation of Rs 89,120 crore approx on the basis of current market price on November 21”. Also Read - Bank Strike Day 2: ATMs to Run Dry, Salaries May Get Delayed as PSUs Continue Protest

There are about two dozen PSBs and government holding in them is between 56.26 per cent to 88.63 per cent. The government has infused an amount of Rs 58,600 crore since 2011 in these PSBs.

Public sector banks require equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms. For the current fiscal, the government has allocated Rs 11,200 crore for bank capitalisation. As per existing law, government holding in PSBs cannot fall below 51 per cent.