Government to raise stake in PSBs to a minimum 58% | india | Hindustan Times
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Government to raise stake in PSBs to a minimum 58%

The government has decided to raise its holding in all state-owned banks to a minimum of 58%, though the mandatory level is much lower at 51%. It has also identified the banks where it would infuse capital to increase its stake.

india Updated: Mar 08, 2011 23:13 IST
HT Correspondent

The government has decided to raise its holding in all state-owned banks to a minimum of 58%, though the mandatory level is much lower at 51%. It has also identified the banks where it would infuse capital to increase its stake.

An official source said that the finance ministry is working on the proposal. The move would strengthen the banks’ financial health and would provide them greater headroom to raise capital if required at a later date by further dilution of the government stake.

Finance minister Pranab Mukherjee while unveiling the budget for 2011-12, said that a sum of R6,000 crore would be provided in the next fiscal to public sector banks for recapitalisation.

In 2009, the government had signed an agreement with the World Bank, under which an amount of R20,000 crore has been provided for the development of infrastructure and recapitalisation of banks.