Three PSU banks to float IPO this fiscal
Govt will go ahead with its plan to divest 5-15% equity in three public sector banks this fiscal.india Updated: Jul 12, 2006 18:29 IST
The Government will go ahead with its plan to divest 5-15 per cent equity in three public sector banks this fiscal, notwithstanding the decision to put on hold all dis-investment plans in public sector undertakings.
"Initial Public Offering by banks is not dis-investment. We are not giving block of shares to any industrialist," Banking Secretary Vinod Rai said adding United Bank of India, Indian Bank and Central Bank of India, which are now cent per cent Government owned, will tap the capital market this fiscal.
The Government will certainly divest its equity in the three public sector banks by 5-15 per cent this fiscal as they have restructured their capital, he said.
These PSU banks have been given permission to go for IPOS, he said adding the exact timing would be decided by the banks themselves.
Elaborating, he said dis-investment refers to cases where a PSU is largely taken over by somebody. "Being taken over by somebody, somebody will come and sit on the board of PSUs, and interfere in the management."
That does not happen in the case of PSU banks, he said emphasising voting rights of shareholders, other than the government, will always be one per cent irrespective of their percentage of stake.
Indian Bank CMD KC Chakrabarty has already indicated that the bank would come out with IPO some time in 2007. It would file the prospectus with SEBI in October or November.
The United Bank of India officials have said the bank is expected to come out with its maiden public offering in the current financial year.