The Union Finance Ministry is set to accelerate the process to privatise two state-run lenders. Reportedly, the two shortlisted banks for privatisation are the Indian Overseas Bank and the Central Bank of India.
The centre will hold at least a 26 percent stake in these two lenders for the initial few years. The proposed changes could include the removal of the 20 percent limit on foreign investment in public sector banks in these two cases.
The other change could be the offer of a more lucrative voluntary retirement scheme (VRS) to the staff of the two concerned lenders. One of the officials said, “We have incorporated the relevant suggestions and a final proposal will soon be put for final consideration and approval of the cabinet.”
Furthermore, the extent of the stake sale will only be decided upon assessing the interest from the investors. The prevalent market conditions will be a key factor behind this decision too. The ministry will soon seek cabinet approval to amend the Banking Regulation Act, 1949.
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