Extension expected for PSU banks to meet SEBI's MPS norms
What's the story
State-owned banks in India are likely to receive another two-year extension to meet the Securities and Exchange Board of India (SEBI)'s minimum public shareholding (MPS) norms, according to Financial Services Secretary Vivek Joshi. In an interview with PTI, Joshi revealed that SEBI had previously granted special forbearance until August 2024 for public sector banks (PSBs) to meet the 25% MPS requirement. "We have written to the Department of Economic Affairs for the extension," he said.
Non-compliance status
Five PSBs yet to comply with MPS norms
SEBI mandates a minimum public shareholding of 25% for all listed companies. However, five out of 12 public sector banks (PSBs) have yet to meet this requirement, with government holdings exceeding 75%. The government currently holds stakes as high as 98.25% in Punjab & Sind Bank, 96.38% in Indian Overseas Bank, and over 85% in three other banks.
Stake reduction
Government stake in Bank of Maharashtra to decrease
Joshi stated that the government's stake in the Bank of Maharashtra is expected to fall below 75% during the current fiscal year. He added that decisions on share sales through Qualified Institutional Placement (QIP) or other routes will be made by the banks themselves, based on their capital absorption needs. "Generally, a two-year extension is given and hopefully it should come sooner than later," Joshi said.
Strategy document
Financial sector vision and strategy document in progress
The Department of Economic Affairs (DEA) is set to release a financial sector vision and strategy document during this fiscal year, according to Joshi. "The strategy we have for Vision 2047 will be covered in this document," he said. The document will outline the number of banks required for a Viksit Bharat, and the number of global banks like SBI and ICICI Bank needed by 2047.