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Cabinet ok for bank stake sale

The union cabinet has approved the plan to sell part of the government’s stake in the public sector banks by 2019. The stake sale is expected to raise about Rs 1.6 trillion for the government. The public sector banks need around $60 billion in capital over the next four years to meet new global regulations and to build a buffer against rising bad loans. A statement by the government said while permitting banks to raise capital from the market, they would be advised to preserve the government holding at minimum 52%. The government said it would have to infuse about Rs 788.95 billion into the banks over the next four years to maintain the 52% stake. It would get nearly Rs 345 billion as dividend.

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