PSU banks may get another 2-year extension to comply with MPS norms

New Delhi, Jul 28 (PTI) Public sector banks are expected to get another two-year extension to comply with Sebi’s minimum public shareholding (MPS) norms, a top government official has said.

Out of 12 public sector banks (PSBs), five are yet to comply with MPS norms and the government’s holding is beyond 75 per cent.

As per the Securities and Exchange Board of India (Sebi), all listed companies must maintain an MPS of 25 per cent.

However, the regulator gave special forbearance to state-owned banks till August 2024 to meet the requirement of 25 per cent MPS.

“We have written to the Department of Economic Affairs for the extension,” Financial Services Secretary Vivek Joshi told PTI in an interview.

Generally, he said, a two-year extension is given and hopefully it should come sooner than later.

Five banks have minimum public shareholding of less than 25 per cent.

Currently, government holding in Delhi-based Punjab & Sind Bank is 98.25 per cent. It is followed by Chennai-based Indian Overseas Bank at 96.38 per cent, UCO Bank 95.39 per cent, Central Bank of India 93.08 per cent, Bank of Maharashtra at 86.46 per cent.

It is expected that the government holding in Bank of Maharashtra could come below 75 per cent during the current fiscal, he said.

However, Joshi said, the banks’ will take decision on share sale through Qualified Institutional Placement (QIP) or other route depending on their capital absorption needs.

Depending on market conditions, each of these banks will take a call in the best interest of shareholders, he added.

Asked about the Budget announcement of the financial sector vision and strategy document, Joshi said it will be anchored by the Department of Economic Affairs (DEA) and released during the current fiscal.

“The strategy we have for Vision 2047 will be covered in this document. For example, how many banks will be needed for a Viksit Bharat, and how many global banks like SBI and ICICI Bank will be required by 2047.

“We need a strategy to modernise regulations and regulators in anticipation of changes where banks will not only be banking companies but also information-technology companies,” he said.

The Department has done some work while legislation is another big area being reviewed, he said, adding, the document would be completed during the current financial year.