The central government intends to cut down stake in public sector banks to 52% with an intention to meet the Rs 3 lakh crore capital requirement of these banks. Confirming this, finance minister said this will help these banks to meet the Basel III norms. The move will not only preseve the public sector nature of these banks but the capital structure can be improved by increasing the shareholding of the public in a phased manner through the sale of shares. These banks need equity capital of Rs 2.4 lakh crore by 2018 to meet the norms. In order to maintain the public sector character of these banks, the government’s stake in these banks should be above 51%. The earlier government by a decision in 2010 had kept the minimum shareholding of the government in the public sector banks at 58%. Currently, the government’s stake in these banks varies between 56.26% and 88.63%.
