Central Bank of India, Indian Overseas Bank News: The buzz around privatisation of two-state run banks Central Bank of India (CBI) and Indian Overseas Bank (IOB) lifted the stocks of the two lenders on Tuesday. Shares of Central Bank of India rose 16 percent to Rs 28.30, while IOB shares reached 18 percent high of Rs 27.95.
According to reports, the government has picked CBI and IOB for divestment. The government is likely to amend the Banking Regulations Act and other related laws to facilitate the planned divestment.
Earlier this month, government think-tank Niti Aayog had submitted to the Core Group of Secretaries on Disinvestment the finalised names of PSU banks to be privatised in the current fiscal as part of the disinvestment process.
"We have submitted the names (of PSU banks) to the Core Group of Secretaries on Disinvestment," news agency PTI quoted a senior government official, as saying.
Niti Aayog has been entrusted with the task of selection of names of two public sector banks and one general insurance company for the privatisation as announced in the Budget 2021-22.
Finance Minister Nirmala Sitharaman had recently said "interests of workers of banks which are likely to be privatised will absolutely be protected whether their salaries or scale or pension all will be taken care of".
Explaining the rationale behind the privatisation, Sitharaman had said that banks in the country needed to be bigger, just like the State Bank of India (SBI).
"We need banks which are going to be able to scale up. We want banks that are going to be able to meet the aspirational needs of this country," Sitharaman had said, adding that a lot of thought had gone behind the intention to privatise some public sector banks. The government has budgeted Rs 1.75 lakh crore from stake sale in public sector companies and financial institutions, including 2 PSU banks and one insurance company, during the current financial year.
(With inputs from PTI)