The finance ministry might take steps to sell stakes to adhere to Sebi’s MPS norms after it gets the cabinet’s approval
Union finance ministry is mulling over to sell its minority stakes in four state-run banks, including the Central bank of India, Indian Overseas bank, UCO bank, and Punjab and Sind bank, Reuters reported, citing a government source. The move by the ministry is to adhere to the public shareholding framework laid down by the securities and exchange board of India (Sebi).
The ministry might take concrete steps in the direction after it gets the cabinet nod. Although the regulator mandates a listed company to maintain 25 per cent as minimum public shareholding (MPS), government-owned firms are exempted from complying with guidelines till August 2026. According to the Bombay stock exchange (BSE), the government has nearly a 93 per cent stake in the Central bank of India, 95.4 per cent in UCO bank, 98.3 per cent in Punjab and Sindh bank and 96.4 per cent in Indian Overseas bank.
The rule to maintain at least 25 per cent public shareholding for a listed company was first introduced by Sebi after amendments to the Securities Contracts (Regulations) Rules in 2010.
The central government made amendments to the act in July 2024 and extended the deadline for meeting the MPS norms for central public sector enterprises and financial institutions till August 2026.
“In exercise of power granted under sub-rule (6) of rule 19A of Securities Contract (Regulation) Rules 1957, the central government hereby decides, in the public interest, that every listed public sector company, as defined in the SCRR, 1957, which has public shareholding below twenty-five per cent within the timeline stipulated in Rule 19A of SCRR, 1957, shall get exemption up to August 1, 2026 to increase its public shareholding to at least twenty five per cent,” a notification released by the finance ministry stated.