Mumbai : The government may consider reducing its stake in state-run banks to even below 51 % as an option for raising funds and easing fiscal burden, RBI said in a discussion paper.
“As regards the reduction in fiscal burden on account of recapitalisation of the public sector banks (PSBs), Government may consider options from menu of choices available such as issue of non-voting equity shares or differential voting equity shares, adopting FHC structure or diluting stake in PSBs,” the paper said.
“Going forward, there is a better pay-off in enabling PSBs to improve their performance while promoting private sector banks,” the discussion paper titled ‘Banking Structure in India – The Way Forward’ said. It further said, “government could also consider diluting its stake below 51 % in conjunction with certain protective rights to the Government by amending the statutes governing the PSBs.”
Another alternative would be to move to a Financial Holding Company (FHC) structure, it added. The government has been pumping money in the public sector banks for the last few years to enhance their capital base.
In the current fiscal, the government has announced that the PSBs will get Rs 14,000 crore additional capital. The government infused Rs 12,517 crore into 13 PSBs in 2012-13.
The government had infused about Rs 20,117 crore in PSBs during 2010-11, and Rs 12,000 crore in 2011-12.