
Market regulator Securities and Exchange Board of India (SEBI) may grant an exemption to certain Public Sector Banks and other Public Sector Undertakings (PSUs) to comply with the minimum 25% public shareholding norms by August 2024, according to government sources familiar with the matter. The government has no plans to sell stake in PSU banks at present as per sources.
The sources mentioned that these banks and PSUs are expected to gradually meet the 25% public shareholding norms. State-run lenders are reportedly raising capital through Qualified Institutional Placement (QIP), which results in a dilution of the government’s stake. However, the sources clarified that there is currently no plan for a direct share sale in any Public Sector Bank.
Five state-run banks, namely Indian Overseas Bank, UCO Bank, Central Bank of India, Punjab & Sind Bank, and Bank of Maharashtra, have a government stake exceeding 75%. Based on the current market price, the unsold government stake in these five banks, which is above 75%, is valued at over ₹65,000 crore.
Nationalized Banks (Government Shareholding %, as at end-March 2023)
- State Bank of India (57.59%)
- Canara Bank (62.93%)
- Bank of Baroda (63.97%)
- Punjab National Bank (73.15%)
- Indian Bank (79.86%)
- Bank of India (81.41%)
- Union Bank of India (76.99%)
- Bank of Maharashtra (90.90%)
- Central Bank of India (93.08%)
- UCO Bank (95.39%)
- Indian Overseas Bank (96.38%)
- Punjab and Sind Bank (98.25%)
The minimum 25% public shareholding norms for banks in India require that listed banks must have at least 25% of their outstanding equity shares held by the public, excluding the promoters. This rule is applicable to all listed companies in India and aims to ensure a broader distribution of shares among the public. The Securities and Exchange Board of India (SEBI) implemented this requirement in order to promote transparency and investor participation in the banking sector.