FM Arun Jaitley says govt considering stake sale in PSBs in phased manner

With an aim to help public sector banks raise capital, the government is considering to reduce its stake up to 52 per cent in a phased manner in these banks, Finance Minister Arun Jaitely said on Tuesday.

"A proposal for allowing public sector banks (PSBs) to raise capital from public market by diluting Government of India holding up to 52 per cent in phased manner is under consideration," Jaitley said in written reply in the Rajya Sabha.

The reduction of government share in equity capital of PSBs to 52 per cent will enable mobilisation of Rs 89,120 crore approx on the basis of current market price on November 21".

There are about two dozen state-owned banks and government holding in them ranges from 56.26 per cent to 88.63 per cent.

The government has infused around Rs 58,600 crore in these PSU banks since 2011.

PSBs require equity capital of Rs 2.4 lakh crore by 2018 to meet Basel III norms. For the current fiscal, the government has allocated Rs 11,200 crore for bank capitalisation.

As per the existing law, government holding in PSBs cannot fall below 51 per cent.

Replying to another question, Minister of State for Finance Jayant Sinha said that the total amount of Gross Non Performing Assets (NPAs) stood at over Rs 1.64 lakh crore for nationalised banks and over Rs 2.43 lakh crore for public sector banks in September-end 2014.

Sinha further said amount of top 30 NPAs is Rs 87,368 crore, 35.9 per cent of total Gross NPAs of PSBs.