NEW DELHI : State Bank of India and Punjab National Bank may be among the first state-owned banks to raise money through share sale this year, Banking Secretary G.S. Sandhu said.
Sandhu said the government will sell stakes in public sector banks in a staggered manner over the next five years to help them raise capital to meet Basel-III capital norms.
“We will have to device a strategy where we figure how much dilution will take place in these banks over this five year timeframe, because we are not going to do it in just one go which is not possible also. This will happen over a timeframe of five years,” he said.
The government will not dilute its stake in PSU banks below 51%, he said. The government currently holds between 56% and 88% stake in PSU banks. The finance ministry has asked all banks to submit capital raising plans. Sandhu said the government was also pushing banks to hive off or list on exchanges their non-core businesses to raise capital.
Finance Minister Arun Jaitley said on Thursday that the PSU banks need 2.4 trln rupees of capital by 2018 to meet Basel-III guidelines. Sandhu said the budgetary support, stake sale, hiving off of non-core businesses are options of capitalising banks.