Govt kickstarts process for stake sale in PSBs, PFIs

As part of the long-promised financial sector reforms, the government on Monday kickstarted the process of diluting its equity in select public-sector banks (PSBs) and listed public financial institutions (PFIs) by inviting bids from merchant bankers and legal advisors.

- HARSH KUMAR

Finance Minister Nirmala Sitharaman in her 2021-22 Budget speech had also announced the government's intention to take up privatisation of two PSBs, besides IDBI Bank.

The Department of Investment and Public Asset Management (DIPAM) has issued Request for Proposal (RFP) for transaction advisors for a period of three years from the date of empanelment, with the possibility of a one-year extension. The empanelment fees are set at ₹1 lakh for merchant bankers and ₹50,000 for legal advisors.

According to the government's disinvestment strategy, five public-sector lenders, including Bank of Maharashtra (86.46 per cent), Indian Overseas Bank (96.38 per cent), UCO Bank (95.39 per cent), Central Bank of India (93.08 per cent), and Punjab and Sind Bank (98.25 per cent) are required to reduce their government stakes to below 75 per cent. This is to be compliant with the Securities and Exchange Board of India (Sebi) Minimum Public Shareholding (MPS) norms.