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Jaitley hints at diluting govt stake in PSU banks

Jaitley hints at diluting govt stake in PSU banks
Highlights

The government is open to dilute its stake in public sector banks to 52 per cent, Union Finance Minister Arun Jaitley said.

Union Minister Arun Jaitley with ICICI Bank CEO & MD Chanda Kochhar (L) and SBI Chairman Arundhati Bhattacharya

Bats for independence to PSBs from political decision-making

Mumbai: The government is open to dilute its stake in public sector banks to 52 per cent, Union Finance Minister Arun Jaitley said.

"We are willing to look at all other changes including bringing down government equity to 52 per cent (in state-run banks), and therefore giving additional financial strength and teeth to the banking institutions themselves,"

he said addressing the 68th Annual General Meeting of Indian Banks Association here. Jaitley said these lenders should be involved in the development agenda of State but their administration has to be guided purely by banking considerations.

He pointed out that the government has ventured to professionalise the recruitments of top positions in the banks. "It no longer depends on discretions of individuals. It is becoming more systematic," he said.

The minister said the government is making all efforts to give a final shape to the Banking Bureau so that all other personnel-related decision with regards to the banks can also be professionalized.

“… We are willing to look at changes…. “We have appointed a panel headed by Justice A P Shah to find options of hiring best quality talent,” he said.

“Public sector banks have to be given independence from political decision-making and their decisions should be based only on banking merits,” he said.

The government owns over 59 per cent stake in largest public sector lender SBI, while it has 76.5 per cent stake in IDBI Bank. In Punjab National Bank the government stake is in excess of 59 per cent,

while it has nearly 64.5 per cent equity in Canara Bank. In Bank of Baroda government holds 57.5 per cent, in Allahabad Bank its stake is over 60 per cent, 61 per cent in Andhra Bank, 64.4 per cent in Bank of India and 81.5 per cent in Central Bank of India.

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