Government proposes to trim SBI stake to 51 per cent
08 Mar 2010
The government is planning to reduce its stake in the State Bank of India (SBI), the country's largest lender, to 51 per cent from 59.1 per cent, against the earlier move to trim its stake to 55 per cent.
Finance minister Pranab Mukherjee today moved a bill seeking parliament's approval to reduce the government's stake in SBI to 51 per cent, to raise an additional Rs6,000 crore for recapitalising the public sector bank.
The bill seeks amendments to the State Bank of India Act, which would also allow the bank to issue preference shares and bonus shares as also privately place shares.
The SBI Act in its present form does not allow government to reduce its stake in the PSU lender below 55 per cent and hence the move to amend the SBI Act.
The government has also proposed to increase the authorised capital of the bank to Rs5,000 crore (around $1 billion).
The stake sale is expected to rake in around Rs6,000 crore ($1.2 billion) at current market prices of the SBI stock.