Modi government approves ₹10,000cr fundraising plan for 5 state-run banks
What's the story
The Indian government has approved a ₹10,000 crore fundraising plan for five public sector banks, as per CNBC-TV18.
The funds will be raised via the Qualified Institutional Placement (QIP) route.
This plan includes the Bank of Maharashtra, Indian Overseas Bank, Punjab & Sind Bank, UCO Bank, and Central Bank of India.
Fundraising is likely to start in small tranches from the fourth quarter of FY2025.
Stake sale
DIPAM to sell stakes via OFS route too
The Department of Disinvestment and Public Asset Management has also been authorized to sell stakes in these banks via the Offer For Sale (OFS) route.
This comes as part of the government's strategy to meet the 25% minimum public shareholding norms for these PSBs by August 2026.
These state-run banks currently remain under the administrative control of the Department of Financial Services.
Ownership
Government's current stake in the 5 banks
As of December-end, the government owns a majority stake in all five banks.
The stakes are as follows: Bank of Maharashtra (79.6%), Punjab & Sind Bank (98.25%), IOB (96.38%), UCO Bank (95.39%), and Central Bank of India (93.08%).
These numbers were disclosed in the latest shareholding pattern on BSE. Based on the current stock prices, the excess stake by the government in these five lenders, stands at almost ₹50,000 crore.