Shares of Central Bank of India and Indian Overseas Bank (IOB) surged by about 20% every single on the BSE on Monday amid buzz that the government has moved closer to privatising these two lenders, in sync with Niti Aayog’s suggestion.
The stock of Central Bank shot up 20% to Rs 24.30 per share, even though IOB’s rose 19.8% to Rs 23.6.
The government might also amend the Banking Regulation Act and Banking Companies (Acquisition and Transfer of Undertakings) Acts of 1970 and 1980 (nationalisation laws) as early as in the monsoon session of the Parliament to privatise the banks.
The sell-off strategy, announced in the Budget in February, is element of the government’s broader divestment ambitions for FY22, and consists of privatisation of many other non-monetary state-owned entities as nicely as listing of insurance coverage behemoth LIC. The government has set its all round disinvestment target for FY22 at Rs 1.75 lakh crore, about 3-and-a-half instances the actual realisation last fiscal year.
Global rating agency Fitch not too long ago mentioned India’s strategy to privatise two public-sector banks in FY22 could be delayed, as the “bold move” faces threat from political opposition and structural challenges, which includes heightened balance-sheet strain in the wake of the Covid-19 outbreak.
Government officials mentioned the work was in complete swing and the names of the eligible candidates would be formally declared quickly.