Bill lowering government stakes in SBI passed by Lok Sabha

August 2nd, 2010 - 9:45 pm ICT by IANS  

State Bank of India New Delhi, Aug 2 (IANS) The Lok Sabha Monday passed a bill allowing the government to lower its holding in the State Bank of India (SBI) to 51 per cent and arming the country’s top lender to raise funds from the capital market.
The government currently holds over 59 percent stake in the bank.

The State Bank of India (Amendment) Bill, 2010 was passed amid the firm assurance by the government that it will “under no circumstances reduce its stake below 51 percent.”

Casting aside apprehensions expressed by the opposition and allies that the bill may only be step closer to privatise the country’s largest public sector bank, Finance Minister Pranab Mukherjee told the house that the bill itself has the provision that “in no case the government’s stakes can be lowered below 51 percent.”

“The government will continue to be a majority stakeholder,” said Mukherjee, adding that the amendment was in keeping with today’s financial realities and needs.

The bill also allows SBI to issue bonus shares to existing shareholders.

Earlier, the central government had announced plans to reduce its holdings in state-run banks while retaining majority control.

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