Through sale of entire stake in BOI and IOB Rs. More than Rs 28,500 crore will be raised

Mumbai, Ta. 16 February 2021, Tuesday

If the government sells its entire stake in Bank of India (BOI) and Indian Overseas Bank (IOB), it will be able to raise about Rs 2 crore today. The government has announced plans to privatize at least two public sector banks in the next financial year.

The government has set a target of raising Rs 1.5 lakh crore through disinvestment in FY 2021-2.

It is yet to be officially announced which bank the government intends to privatize, but it has so far compiled a list of four banks, including Central Bank of India, Bank of Maharashtra, Indian Overseas Bank and Bank of India, government sources said on Monday. .

If the Bank of India and Indian Overseas Bank reduce their stake to 21 per cent, the government could get a total of Rs 1,200 crore from both. Similarly, if the stake in Bank of Maharashtra and the Central Bank of India is reduced to 21 per cent, the government could get Rs 50 crore, according to rating agencies.

The government currently owns 7.10 per cent stake in Bank of India, 7.50 per cent in Indian Overseas Bank, 2.50 per cent in Central Bank of India and 7.50 per cent in Bank of Maharashtra.

Bank of India's share price closed at Rs 70.50 on Tuesday. The central bank's share price was Rs 12.50, IOB's was Rs 19.10 and Bank of Maharashtra's was Rs 19.05.

In the privatization phase, the government is considering privatizing small and medium-sized banks first to gauge how they can move ahead with other banks. The government intends to maintain its majority holding in State Bank of India, the largest public sector bank, so that it can be used to increase lending in rural areas.